Sree Iyer: Namaskar, welcome to Daily Global Insights with Sree and Sri, episode number 192. Today is June 29 Tuesday and we have a lot to cover and shall jump straight to Global News. But before we do that, let’s just take a look at the big news that is coming. Sridharji you have something happening in Times Square, can you please touch upon that sir before we jump on mainline programming.
Sridhar Chityala: There was an extraordinary incident in, which you could see in a broad daylight person in the Times Square running around and eventually he was shot. And I think he been captured as the shooter, it is not fatal but a bystander who was in time street with this family biking got hit was hospitalized and is well on the way to recovery. But the fact is that this is beginning to happen in places of such prominence and where there is public all the time is a reflection of the sad reality of lack of Law and Order that has suddenly crept into the society more so, in the past few months, especially in the last 3 months or 4 months or so. we saw some of this as a result of the pandemic last year, but this is a very sad incident. There’s been also stabbings in broad daylight, there is been commentation, there have been protests, but in general, Law and Order are breaking down across the country, especially in certain Metropolitan or urban cities such as Manhattan, Washington DC, Minneapolis Etc.
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Now we shall proceed with our regular programming. Sridharji, the first news item that we have today is, this is the big week of celebrations in Beijing as CCP completes hundred years of founding in Shanghai on Thursday. The same day will Mark the return of Hong Kong to China in 1997. With your permission, I’m going to put up a banner that is doing the rounds in China. So please go ahead, sir. I have that banner.
Sridhar Chityala: I think it’s a remarkable accomplishment in hundred years, July 1st marks the Hundred Year celebrations, the founding of the Chinese Communist Party in Shanghai and it has never looked back, it’s grown from strength to strength. One can often, question, the practice method that CCP adopts in the pursuit of its agenda. But, when you look at its progress and what it has accomplished in the past, more so in the past 30 years is quite a remarkable transition, and transformation of China, into a Global Powerhouse. They have set about a vision and have maniacally executed against the vision, be it in manufacturing, be it innovation, be it in their Global reach, be it in the security, be it in the financial services. You can basically pick up, they seem to be a very meticulous plan of execution. We have covered several facets of it more in an adversarial context, when we look at the South China Sea, When we look at the East China Sea, we have looked at the Taiwan Straits, we have also looked at their foray into Djibouti, Gulf of Aden, their presence in the Indian Ocean. We covered Dar-es-Salaam yesterday, their footprint, in Greece, in the Mediterranean Etc. But when you look at the meticulousness of their planning and the execution that has gone behind it, it’s all you have to do is step back and say, it’s quite an astonishing achievement in terms of what has been accomplished. As I said, I’ve spent close to two decades in that part of the world, I can tell that, you know nothing Kinder existed beyond Beijing. But what you see today, you know, if somebody woke up 20 years later or 30 years later, then they would not even recognize a modicum one of the greatest Urban revolutions and transformation is Shanghai. I was in a shanty industrial town and in the way it has been transformed today with multi-lane highways, 16-17, the main highways on either side is again, is a very noticeable and visible transition that has occurred. Today more Chinese are mobile affluent around the world, you know, contributing in several ways, you know in various fields. So, they are going to celebrate and Mr XI Jinping is going to talk about the accomplishments and he’s going to speak about the vision for 2025 and 2035 and so on.
Sree Iyer: China avoids a repeat of Alaska at the G20 meet in Italy with the USA while quoting Russia and China inaugurated the second-largest Baihetan based Hydroelectric Dam with 16 Gigawatt capacity in a boost to get to a carbon-neutral society. Sridharji, when the Three Gorges Dam was built the amount of water, it was storing was so much that it was beginning to affect the gravitational pull of the Earth. Would you think that this is also going to be something of that size?
Sridhar Chityala: Anything that China does, you know, has consequences. This is in Chengdu southeastern region of China. They have faced out the release of the Dam into their 16, large Gorges each with one-gigabyte capacity. The first one has been dedicated and released, so they will be the Progressive release of the dam. But, when you look at the pictures, I have not been to that particular area, so, when you look at the pictures, what it just tells you the amount of work that has been done by China and once says it that doesn’t alter some of the Geo Dynamics, then I think it would be foolish to make such a statement. But having said that this is not coal, this is hydroelectric, this is not thermal. So to that extent, China is doubting that this is going to help them to achieve, you know, China, India even US And Japan are all thermal power and augmented by nuclear power in some of the states, but this is hydroelectric. And they say that this is their March towards achieving the, you know, carbon-neutral society.
Sree Iyer: And in a Blow to Biden and the US policymakers. Ukraine pulls out of anti-china UN statement on human rights violations by China, after the report of Biden freezing aid.
Chinese media, never lost, loser movement, to shore effusive Praise on Ukraine. So this is all, you know, batting back and forth. Now you can clearly see that there are two poles in the world, there is a Chinese Lobby and then there is the US side. And, and I think this is going to play out in every incident that will happen around the world, sir, that is my opinion, your thoughts, please.
Sridhar Chityala: So effectively, there are four groups in one carefully takes a look at it. You have the US which tries to nibble around with everybody. Then you have very clearly China, they are the lead on the hegemony, and then you have Russia and then you have India, let’s not forget, we have India and to some extent India, Japan. So, what you’re witnessing is that at every move the United States is being, you know, checkmated by China, only because of being poor policies and very poor timing of the policy executions. On one side you go and say you support Ukraine and then you suddenly realize you’re pulling the aid and then you go to the United Nations General Assembly and then you basically you know, get an act around human rights, what has happened? You know China, Russia and Ukraine align and say United States we don’t support you and then the Chinese in the United Nations General Assembly, clap their hand in support of Ukraine and the Chinese media touts it as one of the biggest accomplishments in conjunction with what has happened. You know, Xi Jinping went before the G20 meets, signed the deal and said, Russia and we are partners and we work together. So, therefore, nothing is mentioned about the US. So, they are playing very soft after the Alaskan debacle. They’re playing very soft, but really forceful diplomacy and this is just another example and how the United States is caught napping in some of these Places.
Sree Iyer: Taiwan is sending its Deputy trade a rep for US Taiwan TIFA talks (Trade And Investment Framework Agreement). So Taiwan is continuing its engagement with the United States, I guess. And they are trying to increase their trade share with the US. What are your thoughts, sir?
Sridhar Chityala: I think that this is a continuation of the Taiwan US policy that says besides the South China Sea, the biggest irritant that the US is creating for China is around Taiwan. So Taiwan is hanging by the foretells that with the hope that the United States would continue to augment and support if Taiwan speaks with Israel, you know, they may have something interesting to share to the Taiwanese, which is to say you are better off to be drawing, support from Nations around you. Don’t be overly reliant on the United States. They may drop the ball head at any point in time which they find very opportune for themselves. This is exactly the point, Mr Xi Jinping made in his directive to Taiwan which is to say that, you know, think about sooner or later joining mainland China, you are part of mainland China and become a province rather than being reliant on the United States. You would regret later that the United States is not reliable. What they’re trying to do is at least the United States is trying to, this is trade investment framework the agreement has been in place but in Justice for hot and cold hot and cold and hot and cold, they reviving that with an intent that you know, the semiconductors electronic Vehicles, defence and on a number of areas that Taiwan and United States can collaborate, and make sure that there is a trade flow going and there is also the support on the security side.
Sree Iyer: The UN Human Rights, Chief Michelle Bachelet has called on the world to end systemic racism, against people of African descent and make amends to the oppressed. This includes reparation payments oppressed, while, groups like Black Lives Matter, should get recognition funding and public support, your thoughts.
Sridhar Chityala: I mean, it is one word astonishing UN Human Rights person saying that look, they have to delineate one is reparation payments if you are starting the reparation payments, where do you stop and where do you end? So every country in the world is going to come and pick up and say they have been oppressed, they have been occupied. And very true, the African nations for a considerable period of time has been exploited, harnessed and should be given due recognition but you do that and then suddenly you bring BLM into the context in a United Nations address, you know, who is paying the lady? I mean, whose payroll this person is in because one is the genuine repression. And the second is bringing an isolated group into the context and trying to legitimise it on the UN platform.
Sree Iyer: Classified Ministry of Defence documents including HMS Defender, details are left at a bus stop and investigations are underway. The sounds like Britain. Is that correct?
Sridhar Chityala: This is Britain. The HMS Defender is the ship that set sail across, you know, the Black Sea and conducted exercises around Russia. And if you recall, Russia fired, the warning shot and said that next time, there is no warning will be firing missiles if you don’t heed the warning. Lo and behold in a few days later, we have the defence documents including the HMS Defender turns up, so it must be a great inside job by somebody. So it seems like, you know, and that reads at a bus stop. You know, it’s a very typical British problem.
Sree Iyer: Stunning, stunning, Biden tells outgoing Israeli, a president that Iran will never get a nuclear weapon on my watch. And pro-Iranian forces claim that they shelled US forces in Syria, including bomb blasts. Iran now has drones of 7,000-kilometre range Guard’s Commander says. Overall taken in its completeness, so the new regime in Iran is essentially breathing fire at this point. I don’t know who’s going to douse it and where things are headed your thoughts, please.
Sridhar Chityala: My thoughts are that the real war looming between the US Army, and the rebel forces because we talked about the intersection of Iraq, Iran, Syria. As you know, one of the flashpoints of trouble is somewhere around that you have both the Iranians as well as their Guerrilla forces or Iran backed Rebels, or Iran-backed, you know, their forces such as Hezbollah and so on, and we covered some of these people yesterday, and they are fully armed. Now, they have the latest gadget to play with which is drones. Apparently, the battle around that spot post the bombing by the US was quite Fierce with blasts and you know, firing and all the kinds of incidents that happened. The United States probably responded, so there is a major real looming danger, that is, developing there. Then, you flip across to the other side you have the Palestine Gaza situation with Israel on the border. So my takeaway is that they have a problem looming in that specific area.
Sree Iyer: And now, let’s take a look at US news. Texas Governor Abbott is set to close centres housing illegal alien minors and housing about 4,500 of them. He is also planning to visit the border with President Trump and other Republican Senators. Ilhan Omar calls for a pathway to citizenship for all illegal aliens. Viewers, don’t act surprised. We were all the first ones to call out the entire sinister design behind opening the borders. And then you saw after three days, the Senators are making a beeline towards the Border because the media was kept out. I mean they really messed it up. This is Biden’s administration’s fault and we will not forget it and it will come and bite them at the wrong time, but sir your thoughts. Now, if you close down these detention centres, what is going to happen to those children because they’ll try to make a martyr case out of this also?
Sridhar Chityala: Well I think what is going to happen is, basically, what Abbott is saying, is this whole thing is a mess, because, Vice president Harris, visited instead of going to the Rio Grande, she went to El Paso, which is a much quieter place and where you have the wall. She makes a comment that the surge is not an issue as is being made out by GOP and the Republicans. So that’s the statement she made. Now Abbott says, you think so? Because you’re not here you have not been here for more than 90 days. You come here and make a statement, all this mess that is here, I am dealing with not you. So, therefore he has taken the initiative, preparing the ground. Now on Wednesday which is tomorrow, they would be Abbott, President Trump and a whole bunch of Texan Republicans making their beeline to the border and Reporting live which we haven’t seen in terms of the specifics of activities and incidents and trouble that is looming around. So what do the other Democrats do Or the administration do? The administration basically is moving them in buses, moving them in by planes, we have covered that. And now AOC stands up and says the faster solution to solve this problem is to basically give them all a pathway to citizenship. And what does the Oregon State? Well, give them all medicare, so through Medicare Program, a vast number of people don’t have health coverage in the United States but you have all these illegals which are going to be given.
What does New York do? They are going to give each one of them a settlement allowance, which is funded through the Covid program. And guess what, we will charge the US taxpayers an extra amount of tax to fund this, close to 8 billion dollars was set aside by Governor Andrew Cuomo all these we have reported in our Daily Global Insights program. But this is exactly what is going on. And this is also the battle for us in the infrastructure project.
Sree Iyer: New York Police Department is hunting for a Time Square shooter. This is how we began our News. So we will keep you posted on that. Sir, I think you meant Ilhan Omar, not AOC, who said that they should get a direct path to citizenship.
Sridhar Chityala: Ilhan Omar says that they should get a straight path… AOC, it was who said that she should get a straight path to citizenship and it was AOC who said that it was a rude wake-up call after calling spike in kind as a GOP hysteria.
Sree Iyer: Thank you, sir. Mitch McConnell asks Biden, Schumer, and Pelosi to come clean on the infrastructure deal where in addition to the bipartisan deal. Democrats are said to be working on a separate bill with passage via the reconciliation process. Bernie Sanders, says no reconciliation and no deal. Again, AOC says we probably have the only chance to get our climate and other social deals done. The progressives are running amok right now. Progressives slam the president for lack of progress on climate for lack of action. ‘Biden, you coward, fight for us. What is the scope of the infrastructure budget? 943 billion bipartisan bills or 2 trillion reconciliation stimulus plan with a 6 trillion budget with record deficits to annualize the programs.’ The mind is just boggling, sir. I just wanted to read these things out to you so that you can take the wholeness and reflect upon what you think is happening. Are the Democrats trying to sneak in using the reconciliation process, which happens between select members of the House and the Senate when a certain Bill gets passed to try and get the commonality addressed and then, they are trying to sneak in a bigger stimulus program? Is that what the GOP is accusing them of?
Sridhar Chityala: GOP is accusing them. Mitch McConnell is basically saying we will not pass the bipartisan bill of 943 billion. If there is no commitment by the present Administration, which is the Democratic Administration on the $2 trillion social agenda. So therefore they say,’ Biden, you sign up and you say that you’re going to allow the reconciliation process, 2 trillion, if so, then we will approve the 943 billion. The GOP is saying, ‘Hey this is not fair. We agreed that 943 will be the infrastructure bill by reducing it from 2.1 or 2.25 trillion where it started it went to 1.75 and then came to 1.25 and then it settled at 943 while the Republicans or the GOP went from 543 to about 943 billion dollars. So, therefore, Mitch McConnell is saying we won’t get the bill done. So, therefore, if this is the blackmail that you have then we won’t get the bill done. So come clean, Mr Schumer. Come to clean Miss Pelosi. Come to clean Mr Biden. Three of you come out and say what exactly is the truth. So we all can agree and pass.’ In the meanwhile, the progressives are saying no bill, no plan, if you don’t have $2 trillion dollars social programs embedded as part of the reconciliation process recognizing GOP will not support it.
Sree Iyer: It’s high time the Democrats moderates, the ones we call Republican Democrats found their voice because the progressives were getting everything they want and then some are still crying that not enough is being done. This is like a child who’s got the candy store and wants the adjacent toy store also. This is just my opinion, sir, you can differ with me on this. But that’s how I see it.
America would look like Canada if Florida had not fought against lockdowns, says Florida Governor DeSantis. States that are withdrawing unemployment allowance are witnessing the fastest return to work. So this is a good ploy that some of the states are employing to get their workforce back into work, sir.
Sridhar Chityala: It is so, I think because there are significant labour shortages. The significant labour shortages are driven by these extended unemployment benefits which is going till September. So there’s no incentive for people to come back to work before September. The moratoriums are also being extended to July 31st. So, therefore, people don’t need to pay the rent. The child credit allowance is being given and also Parental Healthcare Allowance is being given as part of the Great America child relief plan. And there is a plan as part of the 60 trillion budget to annualize it, which makes it not a one-off covid relief, it will be coming as a standard allowance to these people. So when you put all these social programs, though I support the child tax credit program which I think is much needed, including free education and food and so on and the supplementary stuff. But when you put all these things together, what it means is there’s less and less and less incentive for people to work. So the red states or the Republican states are stating that ‘No, we don’t want to have unemployment insurance, but we will have returned the employment benefit and we give them an incentive to come back, we’ll give them 180$. Let them come back and that will be credited into the account.’ I think it’s the state of Indiana or the state of Illinois, within one of the state’s, a case has been filed by the employees which are to say it’s illegal to stop the federal programs. He has not stopped the Federal programs but he has said temporarily halted the restrainment of the federal programs until a broader decision is made. And then immediately, the Democrats stated that this is what is going to happen in all the other red states. We’re going to get a favourable judgment and will be back to square one. So this is the next drama, on this whole unemployment versus reemployment incentives.
Sree Iyer: I have a map of the United States, sir, where we are showing the 26 states that are nixing the extra jobless benefit, so we are done with that one.
The next news item is Manhattan DA will not charge former President Trump says President’s lawyer, a disclosure made by Cyrus Vance last week. Remember viewers, we had predicted that this will not happen, and that’s exactly what is playing out itself. A waste of taxpayer money, somehow the Democrats are trying to find some mud throwing at President Trump and trying to hope it sticks. Whatever it is, you got to have data, you have to have actionable data and I think that’s where this thing has come up wanting. Your thoughts, sir, before we move on to the next item.
Sridhar Chityala: I think it’s knowing the well-known except trying to make a political statement. A couple of people on Twitter tweeted, ‘We Told You So about Giuliani and also about President Trump. Today, they probably are laughing at themselves for making such silly statements. If you have Andrew Cuomo, who has been the governor tainted and alleged so many scandals, nothing has happened to him. The same thing is going to happen in the case of former President Trump. Look, none of these investigations turns into prosecution because most of them are political distractions rather than political prosecution or enforcement of the law. There is no enforcement on borders. How can you have enforcement within the borders?
Sree Iyer: The majority of voters reject teaching children Critical Race Theory. Now the parents are speaking out and I’m sure this is going to start reverberating and starting to take more of Center Stage, because more and more parents are expressing their concerns about, why the children are being taught about this. So I think we have to wait and see how it plays out.
The US ranks last in global media trust at 29% while Finland tops at 65%. I’d be curious to know where India stands because India is also one of the biggest offenders. Now there’s another interesting news. 1.3% of the US population is Indian Americans and the numbers are 4.2 million and yet they have created 23% of the unicorns, about 67 in number. So it’s a very high achieving group of individuals and families who have been singularly working to create new wealth for the world as well as for the United States, sir.
Sridhar Chityala: It’s a remarkable achievement. It was tweeted by Venture capitalists Michael Jackson and he said, ‘Guess what? Take a look at this – the Unicorns. They are not only contributing to the US ecosystem, but they are one of the highest contributors to the global unicorn ecosystem. Unicorns are coming out of nowhere. Even in India, you have seen a sudden resurgence of unicorns. So this is a great achievement and is a good number that reminds people that Indian Americans remain very strong contributors. There’s also an underlying message here, which is the H-1B system, which to some extent has been modified by President Biden, under the quota program. Indians felt they were very disadvantaged relative to the other segments of the population. All these numbers justify that. Also on the per capita of the ethnic segment of the population. If I’m not mistaken Indian Americans have the highest per capita or the second-highest per capita relative to various ethnic groups in the United States.
Sree Iyer: In Indian news. Sharad Pawar and his convoy ark SUVs in Pune racetrack. Kiren Rijiju says, ‘Complete disrespect to Indian national athletes.’ The export trade of 400 billion is achievable in the fiscal year 2022, but it requires aggressive marketing strategy says the president of FIEO or Federation of Indian Exports Organization, Mr Sakthivel. The just-concluded trade deals with UK, US, Europe, and Australia would help to achieve this goal. First off, what is this thing about Sharad Pawar parking his entourage on the racetrack itself?
Sridhar Chityala: I think they had come for an event. You could see the cars, we haven’t changed the pictures, but you could see these cars parked right in…
Sree Iyer: All white cars.
Sridhar Chityala: Cars parked right in the centre of the race track. Race tracks are the Sancto sanctum for the athletes. That’s where they sweat it out, but of course, Indian politicians have little respect.
Sree Iyer: Law onto their own.
Sridhar Chityala: Little respect besides their law unto their own, it is very conspicuous. This picture tells a very sorry State of Affairs of the politicians who think by themselves, they are effectively the gods, especially in India. So I think Kiren Rijiju is himself a sports personality who has made the statement, no sportsperson would speak because if he speaks then you would be victimized. So it is better for the politicians to make a political statement. There’s not one word of regret announced by the so-called offenders, but they think it is their entitlement or they think that it’s a political bruja.
Sree Iyer: The disinvestment program of 1.75 lakh crores is on target to achieve its goal in the current fiscal year since the Chief Economic Advisor of India. Rs 7,500 crore of credit guarantee scheme has been extended to microfinance institutions to lend to small borrowers. So, 2.5 million small businesses are expected to benefit from this. Your thoughts, sir.
Sridhar Chityala: So let me start with the exports. The exports have a very laudable number, the 400 billion, given that you’re talking about 3.1 – 3.2 trillion economy as we finish a 522, then that roughly makes up pretty close to about 13% of the GDP of India. So the goal has always been, if you’re doing a $5 trillion GDP, at least 20% of that 5 trillion, should come from the export segment if not higher. There is a program that the US India business group is focusing on building $500 billion bilateral trade between the United States and India. The UK is another country, which is slowly building up momentum in conjunction with the EU. So I think this is a very important metric and very important number to focus on and I’m glad the concept of marketing has been mentioned by the president of the FIEO.
As far as the disinvestments are concerned, disinvestment brings receipts onto the revenue side of the balance sheet and then you have the expense of side of the balance sheet. So many social welfare programs are going on and cannot just be simply funded purely from tax receipts and GST, they have to be funded from other types of programs such as disinvestment. So this again augers well. Also, privatization means that there is more accountability and there’s more opportunity for incremental dilution and for funds coming in.
As far as the MSME segment is concerned, that’s one of the segments that is adversely impacted by the virtue of covid. We have seen the PPP programs in the United States, probably very much modelled around that, I have not looked at the details of this program, what they call MFI – the Micro Finance Institutions are being capitalized to support, are being given incremental capital to make sure that that flows through to the borrowers, especially targeting the SME segment. This is what the Finance Minister had said. Rather than stimulus, we will use recapitalization or capitalization programs to target and generate the stimulus into the hands of the businesses which are impacted.
Sree Iyer: Now let’s take a look at Markets. Inflation remains the hottest debated topic on Wall Street as the industry ponders the future growth of markets for 2021. Thus far, the SNP has risen 14.23%, and similarly, all the other indices are shown good growth. However, we don’t know how much of an impact inflation is going to have. Sir, your thoughts and then we can conclude today’s segment.
Sridhar Chityala: There is a universal recommendation by all economies that the economy is held together by The Fragile stimulus. In other words, the borrowing that has been given to the people. With a vast number of people still not in the mainstream workforce, the economy had not opened, this inflation could potentially be only transitory. And basically, once the normalization occurs, in other words, people come back to the mainstream economy. The stimulus winds down. This is the unemployment benefits and such things, then it will normalize. So do not increase interest rates based on the inflation numbers that you are seeing too fast. If you raise the interest rates too fast the economy could have a sudden catastrophe which nobody wants at this specific state. So this is the debate that is going on in the market.
One, inflation. What does it do to the market? What does it do to the stock market? And second, the rise of interest rates too fast. What does it do to the economy in the overarching context? So this is the debate and discussion. While that goes on, the markets have thus far outperformed, even 2020, related to where we are today.
Sree Iyer: With that, our today’s episode comes to an end. At 9 pm IST, we are going to be going live with Sri RVS Mani on the ongoing incident in Jammu and the delimitation process that is underway in Jammu and Kashmir and why it needs to be looked at very carefully. Because as there is a fear that perhaps the 2011 census has been fudged. So these are all important events, do join us there. And Sridharji, as always a pleasure, having you on our platform sir and we continue to March forward. We attract very loyal viewers and viewers, please do spread the word. Ask your friends and family to join in. You get tomorrow’s news today, sometimes you get next month’s news today from the PGurus and as always thanks for joining and Namaskar.
Sridhar Chityala: Namaskar. Thank you. Have a wonderful Tuesday. We look forward to seeing you tomorrow.