EP 169: Biden touts economic progress but; MEA S Jaishankar to visit the US next week & more!

Sree Iyer: Namaskar, today is May 24th, Monday, 2021, and Welcome to Daily Global Insights with Sri and Sree. This is episode 169. We have a lot to cover and shall jump straight to US News. First of all, a very happy weekend  I hope to you, sir.

Sridhar Chityala: Excellent weekend. The weathers have warmed up here in New York and I am sure, it is always warm in California. So, very good weekend and plenty of news coming up as we move into the week.

Sree Iyer: We start with Biden’s rating and what we see now is that 55% of Americans prefer smaller government, lower taxes, and fewer services relative to 37% before, which poll is this sir? And when did this come out?

Sridhar Chityala: This is the Rasmussen poll that came out late last week on Friday, after our presentation. The number is indicative of, you know what, the opinions around the economy and the way we are going. There’s a growing concern and discontent and that’s reflective of the way, the unemployment rates etc are moving along. I don’t think any of the broad cross-section of the United States likes this bigger government, a huge amount of taxes, people prefer, you know, prefer lower taxes, lesser services. And I’ll choose the services that I want and I paid for it. So that’s a big number of 55% relative to 37%. I hope Mr Biden hears but, I don’t think his Progressive group will allow him to.

Sree Iyer: Border Skirmishes, tensions continue to cross the border with surges continuing. we’re talking about the United States-Mexico border said what’s the latest update because this has kind of fallen off of the news radar.

Sridhar Chityala: It’s just far enough away because there are so many items going on. And but this continues and every day, Mayorkas who is the Department of Homeland Security secretary. He’s in the news about what’s happening, especially around the young. We reported last week, a large number of incidents. This continuing to be skirmishes. It’s almost like it’s become a paid orchestration of managing the whole infiltration process and most notably the kids under the pretext of unaccompanied or missed out Children. The children are being dumped and they are being progressively moved from one Centre to another, the information filtration has dissipated and the vice president, who is in charge of the border is yet to visit the border.

Sree Iyer: Biden’s 1.7 trillion infrastructure bill has been rejected by the Republicans. So it most likely means that Biden will take the usual route of getting the party to vote for him and have vice-president cast, the deciding vote sir, what are your thoughts?

Sridhar Chityala: I have a feeling that what he will do is instead of passing an executive order, he will go to the House. They were trying to persuade the house to vote, the house will then send the bill to the president. President will use that as the basis and apply for his executive order and get it done. They seem hell-bent on this infrastructure bill, which has more than one trillion dollars or even 1.3 trillion dollars of money that has nothing to do with infrastructure. But, seems to be a very general sprinkle of money going to your whole set of activities, including local Administration, and governments and overseas which is most unwarranted at this point of time, especially as the US debt is piling up.

Sree Iyer: Biden touts economic progress, but the numbers don’t add up. As always, we look at the numbers, you look at the data. Sridharji, your thoughts.

Sridhar Chityala: My thoughts are that this is very well backed up, you know, inflation. I’m using the inflation is at 4.2%. Generally, the fed’s inflation is 2% before they do rate increase rate at 4.2% there is no rate increase. PPI is up to 6%, which we reported is the price index. Now, consumer inflation is up at 4.2%, with no movement from the FED.  Unemployment is around 6.2% and we saw the unemployment numbers and the employment numbers we saw last week again. And only266,000 new jobs have been added relative to 1 million promised by Mr Biden, in the first four months.

Second, we are 8.2 million jobs less than where we were in February last year that is the pre-pandemic. Wage increases have been 0.7% so that is also adding a bit of pressure to inflation. So when you look at all these numbers and the 10-year rate at 1.7% or 1.68% Mr Biden’s theory that economy is looking good, just doesn’t add up on these various numbers and the unemployment rate especially in the blue States is the highest with people unwilling to go back to jobs because there’s a huge do louts that is being dished out.

Sree Iyer: The Red States lead the charge in lower unemployment rates. Trifecta liberal, states lead unemployment. Sir, a little bit more about the Trifecta liberal states, which ones you mean and if the red states are leading the charge in lowest unemployment. Is there a correlation between the mask rules of the states and the unemployment, sir?

Sridhar Chityala: Excellent question. The Trifecta States are those we have Democratic, or republican Governor House and Senate within the state all three controlled by one party. So you call it a Trifecta, which is the four liberal states as you can expect, Connecticut, New York, California and one more, which I think…

Sree Iyer: That’s okay. We get the bigger picture here

Sridhar Chityala: I am trying to find because you caught me. So I three out of four, I remember. All of them are greater than 8% unemployment. Then, what’s the correlation? The correlation that you have indicated is, it’s not the masks, it’s the shutdowns. Okay, so it’s more than the mask, it is the shutdown’s that is causing the problem. So when you look at the governor’s George Abbott or Ron Desantis, you know, who are the leading, the flag, you know, Texas and Florida, You find that What they what are they saying? One, no shutdowns two lesser do louts, no unemployment do louts but we will give you an incentive for reemployment and third is this Mask rule. So I think that there is some correlation, but these three factors playing a part.  Just one more factor, the national average is about 6.1% in terms of unemployment, when you take a look at the numbers out of the 31 states that have lower than the national rate of 6.1%, 25 are red and of the 19 states that is a national average greater than 6.1, 14 are blue. You still have five red states there, but 14 are blue, why? We attributed the reasons, the unemployment rate highest is greater than 8%, lowest unemployment is less than 2%.

Sree Iyer:  And then the next news item, on Texas State Georgia School restrict, Governor DeSantis, SOUTH DAKOTA join the LIST of those who are banning the critical race theory.

Sir, one last thing on the last point, which entity published the number?

Sridhar Chityala: you mean on the statistics?

Sree Iyer:  Yes.

Sridhar Chityala: The employment rates were published by CNBC.

Sree Iyer:  Thank you, sir. And then the next question on Texas and Georgia and so on.

Sridhar Chityala: The Texas, Georgia, this is got correlation to three important data points, one is if you remember 1619 commission touted by New York Times which to form the basis of this whole critical race theory which we had covered. This is being discussed because it is with the school you know schools quasi reopening after this Covid situation and you know prior to closure of the summer programs. So what do you witnessing here is, there is a tremendous pushback on this form of Education being pushed into the schools. So 1619 has been outright rejected which’s called a critical race Theory. So Texas, Georgia District as well as the Desanti’s is complete which is Florida is opposing this whole concept. In fact, Florida Governor says we are not the people who are going to fund to teach Americans our ratio. The 1776 commission which originally was established to look into the Constitutional formation and what was the basis of the Constitution, whether there was anything in the Constitution that enshrines these principles of racism? That was established by Donald Trump, dismantled on the day by Biden. That particular group which comprises a whole bunch of independent as well as Republicans is reassembled to basically nullify the steering. So that is the last point. So I think we won’t discuss this any further in the future until it pops up but more or less going along the red-blue lines, this whole racial Theory programming.

Sree Iyer:  Members of the 1776 commission, which Biden disbanded are set to reassemble and take up the same critical race Theory, sir.  Especially the fact that America was founded on the principles of racism, that sounds a little outlandish, don’t you think?

Sridhar Chityala: I think that is what I covered in the previous point as well, which is namely they are looking back into the constitution, Sreeji. And the objective is to make sure that that there is nothing in the Constitution and to make it public that this, whole theory is a fantasy created by the several fantasies by the left but there is nothing in the constitution that says the foundation was on the principle of racism.

Sree Iyer: In Indian News, India Foreign Minister to visit the USA next week to meet with Biden Officials on Vaccines, Manufacturers, UN Secretary-General, and two US India business forums. A fair amount of stuff on Minister Jaishankar’s plate, sir.

Sridhar Chityala:  On Minister Jaishankar’s plate there is a fair amount of stuff, obviously, he is coming to meet the manufacturers. The headline that is coming out is manufacturers do not want to deal with the states. They want to directly deal with the centre because of a lot of contentious issues. And each State trying to say that they’re doing a procurement. So they’re basically saying no. Here we are talking about two of them, which is Madonna and Pfizer. As far as Johnson, & Johnson is concerned and Eli, Lilly are concerned, they already have a deal to manufacture locally in India.  Johnson & Johnson has got a deal with five manufacturers. He is also meeting the UN secretary-general. I think, basically on climate Covid. This whole vaccine issue is a global problem, every country is raising an issue and in my humble view that the G7 has missed the boat and missed the bus and the whole agenda has been hijacked, the whole focus should have been on Covid-19 otherwise economies are not going to open up. So I think he’s meeting the UN on that. The US business forums is making for continued and sustained investments in India because India is in wave two and continued Investments and basically to say how economic progress is continuing to occur while there are disruptions caused by Covid-19. That’s the objective of his meeting. It’s also confirmed that he will be meeting with his friend Anthony Blinken, Who is the Secretary of State.

Sree Iyer: His counterpart in the United States,

Sridhar Chityala. Yes, his counterpart in the United States

Sree Iyer: Social Media platform, Twitter continues to flog Indian Government Warnings on Toolkit Violations.  A little bit about what are these toolkits, sir. Is this the one that we are talking about the latest one alleged one that Congress says they didn’t do it and BJP says,  no, you did it? Here is the proof. Is it the same thing sir or what?

Sridhar Chityala. It is the same.  The notion of a toolkit is, you know, it’s very sophisticated management parlance which is, you were given a set of tools to do marketing and communication of a message. So, you use a various range of channels to communicate so this toolkit arise from the Indian variant is one example. The second is that the pervasive nature is the lack of planning is the second lack of availability of manufacturing. So you are giving them a set of messaging in conjunction with the tooling which is dichotomous with the reality and this is the message that has been orchestrated and floated. And when the BJP pointed out, this toolkit is been released from the Congress office and the Twitter of those who make those statements get blocked on Twitter. So, this is the issue and the government has issued that you have no role to take political sides, one way or the other, but Twitter will not listen. Whether India has the guts, this is the most decisive moment whether India has the guts to ban Twitter, time will tell.

Sree Iyer: And I think talking points or something that has been around for a long time and I don’t think talking points are a problem with anyone because those are based on facts and data. It’s when the facts, go out the window then, that the whole thing comes into, question?

Sridhar Chityala.  it is.

Sree Iyer India is confident of vaccinating all its adult population by the end of 2020. For the latest update, there is an article on Pgurus. Do go and read that on the vaccinations Sir, your thoughts?

Sridhar Chityala.  My thoughts are as follows if I look at the numbers that I’m seeing. It should not be outside the realms for India to achieve. Let’s say we’re talking about the adult population. When we talked about the general population, you know the definition could be 60 plus or 65 plus today. India has vaccinated, the number of vaccines administered is close to 200 million. If you take at least, the percentage of the population which has received two vaccines, it’s between somewhere, between 4-6%, is the number. The number is around 40 million or 45 million. My data is about three days old here. Today, we are on Monday end of Monday, my data is Friday, Okay, so I’m just giving you the database from my memory. It’s not in the thing, and we can publish this data, we have published a lot of this data. So the ramp-up that is happening on the domestic Vaccines is one thing. The ramp-up that is happening as a result of this Sputnik that is coming in is another thing. There is this deal that has been struck with Eli Lilly as well as with Johnson and Johnson so that gives you the ability to, to state in the next seven months between June to December, they should be able to achieve the specific goal of vaccinating the adult population, that’s just my observation. They also Pune based company has come up with yourself testing kit, they’re going to manufacture between 7 and 10 million kits. And first of that is getting released this week, that’s a big, big number. So,  a large part of it when it is sent and used by people can be a self-deterrence in terms of determining whether they have or they don’t have. So, I firmly believe that India will make me very good progress. We don’t want to quote the numbers but the story is already flattening. The average number of people, you know who is going down is about 100,000 which is net active cases. Indian net active number is somewhere now, close to 2.6 and 2.7 million relative to about 3.5 million last week.

Sree Iyer: Bharat Biotech’s Covaxin is getting close to WHO clearance and 40 countries have expressed interest to import this from India. That is great news. I just want to touch upon one thing, I think, since the Indian government has so many things in the pipeline, Eli Lilly is something that is completely new to everybody, Johnson & Johnson is a single-shot vaccine that makes their life easier. I just wish that the government could lay a road map. It could be a very conservative road map and keep exceeding those limits and you have no home run, sir, what are your thoughts?

Sridhar Chityala: It looks like I’m sitting in the United States, maybe a few others like me are communicating what India is supposed to do and in PGurus as a channel, we are communicating together this as a topical issue. For example, we’ve logged over the weekend which we didn’t cover around whether there was a fear that if I take Covaxin that is not on the WHO list, would I be not allowed to travel to certain destinations? First and foremost, no country has established a rule that you need to be vaccinated and second you need to be vaccinated which is approved by the WHO. So this is another rumour that is floated in Indian media. So when you use the word toolkit, this is an example of messaging. One component of the toolkit that is used to communicate this message. But they don’t communicate that WHO has no Sinopharm, no Sputnik, nothing, because people and countries have to make a choice. WHO may say I will use my Pfizer to give it to the World WHO program. I may use Moderna for the WHO program. I may use AstraZeneca. That is distinctly different from… as though WHO has to mandate. So with this spell that theory through the tweets, I mean together, we have seen that, we have done that, with both PGurus handle as well as my handle, we have tweeted that. Second, we got Dr Harshvardhan. Dr Harshvardhan is the chairman of the WHO executive committee. He’s sitting right there, he’s not going to be sitting right in that committee and making sure that the Covaxin is not accepted. So there’s a lot of myth and a lot of self-inflicted criticisms and discrimination is being spread around the world. This is the sole problem. The problem of covid is not around managing covid. The problem is irresponsible left-wing media and irresponsible media spreading false, fake information. It’s probable, none of these people has casualties, none of these people has a death visible in their families to spread such fake information because I would not be spreading fake information when I have tragedies confronting in my own house. I would rather be responsible So, the story is, one doctor has come up and said nobody can plan for a pandemic. You cannot have 140 million beds in a country. If that is the case, then we will be saturated, hardly the utilization. Now, Covaxin is almost very close to certification and it will get approved. So, the point that we’re making is there is a road that has been given. There is a map that has been given which states, which we can discuss tomorrow, 2.14 billion vaccines to be manufactured by December 31st and they have itemized who are the various manufacturers. Now, let’s assume that it is government data, it needs sanitization, so let’s assume that even if it is 70% inaccurate, it’s 30% accurate, 30% of 2 billion is 600 million (almost half the population). That’s a big number. Now, you take 600 million on average, if you look at the charts, they are vaccinating between 1.5 to 2 million. In seven months, even when you look at the number, as the supplies increase because of the local manufacturing of these three, I mentioned to you, 5 I mentioned, it’s an achievable number. Why the Indian government has not come… I can’t answer that question. Why the lax? I can’t answer that question. All I can say is there is data and people like us, I don’t know whether anybody covers, but in PGurus, we have been covering almost every day, not only Global but the Indian story as well.

Sree Iyer: Yes, indeed. I think it’s very, very helpful if they have like a press briefing every day at the end of the day, as to what has happened, what is coming down the pipeline and we can only tell them. But we will continue to give you the information that we have our information is very accurate. We do the due diligence to make sure that our information is completely accurate.

Sir, with your permission, let’s go on to Global News. Republican senator Cramer thinks he can get enough Democratic votes to bring back sanctions on Russia on the Nord Stream 2 pipeline. Maybe you can just touch upon, what is this pipeline is, what is one pipeline, in case people want to establish a context, sir, please go ahead.

Sridhar Chityala: There’s a very famous cartoon that got published over the weekend which we haven’t shared here but we’ll probably put it in the article, which says Keystone Pipeline XL – closed, shutdown, no oil. Nord Stream pipeline, open, going to Europe from Russia. We’re going to make Russia great. We’re going to make the US not so great, with Biden and Putin photograph, this is the cartoon. Okay, so we got Keystone Pipeline, shut down here. And the United States has no objections to the Nord Stream pipeline 2. This is the gas pipe that goes from Russia into mainland Europe. This went through a lot of contention especially when Russia invaded Crimea. Then, the deal was negotiated by Putin’s very close friend, Angela Merkel and they said, for the sake of the humanity and benefit of EU, which is dependent this pipe should be dealing from there, this Crimea decision and the United States was one of the last countries which allowed it. Biden allowed it. Again, we have covered it in Daily Global Insights. If you go back by two weeks, you will see that we have covered that Biden waives the sanctions on Nord Stream 2, therefore the Nord Stream 2 goes. This is the Nord Stream 2 Pipeline.

Sree Iyer: Israel’s ambassador to the United States says that Biden supported us but we disagreed on the timing of the ceasefire and we will assess if we have been successful in deterring Hamas. The first official statement from the Israeli side, sir.

Sridhar Chityala: Israel is very empathic and made clear that they do concede that there were disagreements and eventually for the wide interest. But they said that they would be constantly reassessing it. That doesn’t mean that the foot is off the pedal, I do believe over the weekend, around the Syria Lebanon border they took out another target. So, therefore, they’re not just going to be quiet.

Sree Iyer: Thanks to Mr Biden and the EU, Iran is becoming more and more belligerent says inspectors may no longer get nuclear site images now. Blinken has put the ball on Iran court for nuclear compliance. So I think this is now going to become a major stumbling block for this agreement to move forward, in my opinion. What are your thoughts, sir?

Sridhar Chityala: Well, it is a very big Iranian Lobby. There’s a very big pro-Iranian Lobby. There’s a very big pro-Iranian group that has funded the US elections. So much of the decisions are going to bear out of that. Blinken says he’s put the onus on Iran. Iran says that its sanctions are likely to be lifted. We again published it, we reported on last Friday, Mr Rouhani basically, saying we will no longer be giving you site images. So there’s a lot of inconsistent statements. And Iran is saying I’ll do what I want to do. I have a $500 billion, 10-year deal with China, why should I be compliant with your rules? And whereas Blinken says, if you have to move forward and you have to demonstrate that you are compliant. As you rightly point out, I have no idea which way this is thing is going to go. The only thing that I see is that the US is going to come out of this bad, the EU is going to come out of this very bad and evil. We’re going to have more belligerence and more issues emerging from the Iran side.

Sree Iyer: South Korea will stand by the US to defend the Liberal Democratic order says, president Moon Jae-in. He supports the denuclearization of the Korean Peninsula and also cooperation on chips and vaccines and walks a very fine line on China. I would like you to touch upon the last one more than the other, sir. Everything else is in consonants, but what is the thing about China, sir.

Sridhar Chityala: President Moon Jae-in was here over the weekend, Thursday, Friday, Saturday, he has left. He’s using that fine line. He is unwilling to condemn China. So he’s unwilling to stand with the United States and Japan to safeguard the Korean Peninsula, to act as one of the key members or allies (as they would call it) to deter China. So he is unwilling because he’s got North Korea and then he has got North Korea with its huge border to China. So on the Chinese side is unwilling. So this is the China, United States Japan, the trifecta coordination to deter China and Korea is not budging on that.

Sree Iyer: G7 meet concludes with an agreement to end financing Coal Power Project by the end of the year. Germany eyes to EU climate club with US, Japan, and China. So Germany is now slowly, but steadily I think moving away from coal-based electricity, if I read it correctly, sir. But they can but they can’t completely disengage themselves from fossil fuel, is it?

Sridhar Chityala: They cannot. US and Japan are the two countries that have an enormous amount of still Coal Power. They remained the countries that are not likely to meet the energy targets. Well, surprise surprise, the country which is likely to meet the climate goal is India. They are far more advanced relative to any of these countries. That’s why India is signing up. What’s the other thing? They basically are saying, if there is any Global project which has an expansion of the coal capacity, those projects should not be funded. That’s the decision G7 has come to. To me, notwithstanding, this is the agenda is subjective, I think they have missed the boat on the covid situation. That’s my observation.

Sree Iyer: The United Kingdom carrier strike group HMS Queen Elizabeth sets sail on a seven-month journey through the Indo-Pacific area. So this is significant because it is the first time I’m hearing the United Kingdom also joining the Firm United United Kingdom.

Sridhar Chityala: This is a very formal sail into the Indo-Pacific and the South China Sea. It will be stationed in the region for almost seven months and it will collaborate with like-minded parties like India, Japan, France, and many other countries in making sure that the Indo-Pacific is open, South China sea is open. This is a strategic game that Mr Boris Johnson’s playing, and he’s also done trade deals, remember with ASEAN, Japan, and they’re also doing a big deal both on security as well as trade with India.

Sree Iyer: Let’s take a look at Markets News. The Dow climbs 200 points. The US Jobless came stopping at 444,000. This was last week. How do you see this week, sir?

Sridhar Chityala: The unemployment rate continues to be a problem unless there is a change in the policy. Many people are not getting back to work. I think we have reported that. So that’s number one. As far as the markets are concerned, I think that we are already beginning to see some upward momentum. Dow is up 150 points as we speak. I’ve already reported that most of the market gyrations will be driven by earning season. If you overall, look at 2021, we have already indicated, the economy is likely to grow between 5-6%. There is no change to that. With the liquidity that is available in this system. The markets, especially Dow, had indicated somewhere between 9-12% growth this year. S&P will be somewhere around 12-14% growth this year. We are very much within those targets as we look at the numbers today, so there’s no change to those numbers purely based on the liquidity that is in the system already by virtue of the austerity programs or what we call the covid relief programs that were launched last year and all we need is $1.8 trillion child care as well as the $1.9 trillion or $1.7 trillion infrastructure. There is plenty of money.

Sree Iyer: Amazon, Google and Apple employees voice support for the Palestinians. Sridharji, before you answer this one, minds to censor, this has been the case for close to 50 years now. I mean, anytime you have anything, the rank-and-file will always support the Palestinian viewpoint. So they have a Lobby. The difference, the way I see it, there is now this messaging has becoming shriller because of the presence of some of the people who are from that area or are of that origin. That’s how I see it, but I don’t see any change in the ground rules, your thoughts, sir.

Sridhar Chityala: I completely agree with you, with your sentiments, and with your assessment. Only one observation, we have almost run out of time, we are well past the 30-minute window but we have to cover this topic separately. No longer governments are engaged in bringing down governments or interference in the governments. There’s a new ecosystem that is brewing. The Woke corporations are an endemic of this ecosystem both funding, messaging platforms and orchestrating the policy changes that they want to enforce. So, it is a very dangerous precedent and a very dangerous transformation that is taking place. Many of them have access to billions and billions of people and data. We will discuss this separately Sreeji.

Sree Iyer: Indeed and last thing, sir, on the Bitcoin. Looks like Bitcoin is on a rebound again today.

Sridhar Chityala: Bitcoin is on the rebound. It’s gone up by $5,000. It is around 36 plus, close to $37,000. It’ll continue to toggle, driven by movement, sentiments and so on. But by and large, notwithstanding, the fact the dip was caused by China saying that it could be coming down. But China is pursuing a self-serving agenda. For the first time, the Fed came up with an approach that it would be revisiting and probably publishing the paper which is all reflected in the sentiments of Bitcoin.

I don’t know whether we are going to cover the CNA Financial.

Sree Iyer: Go ahead, sir.

Sridhar Chityala: I think Sreeji had asked last time whether any ransom was paid to the ransomware, an attack that was caused in the colonial pipe, shut down and if so, who was paid. Now, the answer to the question is, yes, there was a ransom paid which is 4.3 million. It is the number that is being published by many Publications. To whom it was Paid? To the dark side. Who is the dark side? I don’t know. But there’s a whole bunch of people in Eastern Europe who formed this thing called dark side and they have been paid. Some of them get paid, by the way, in cryptocurrency. And it gets cleaned up. This one of the reasons why people have apprehension of the anonymity of transaction. CNA, which is one of the largest Casualty Insurance houses based in Chicago, their firm was under attack around March 21st earlier this year and they paid a ransom of, I think the demand was about 70 billion, they confirmed that they paid a ransom of 40 billion. I have a feeling Japanese and Koreans also paid some ransom, though I cannot confirm the reports are that they have paid due to attacks that occurred. Last week, in DGI, we touched on the need for better control to manage the technology, particularly 5G and the Telecom and the security infrastructure and all this is because of this new threat, that is the ransomware that is making its way around the globe.

Sree Iyer: And this makes the cybersecurity and the softener around that hottest segment now for this year, perhaps the next few years.

Stay tuned, we will bring you news as and when it breaks and perhaps before it breaks out in the mainstream media. We have a record now of having been ahead of MSM by about 2-3 days sometimes and as always, it’s a joy and pleasure to a have Sridharji with us. Sridharji, Namaskar and I will see you tomorrow again and will be on this channel. Same place, same time. Namaskar.

Sridhar Chityala: Thank you so much and have a wonderful day for everybody in the United States and have a wonderful evening in India and wherever you are, the appropriate time.