EP 201 | Daily Global Insights | Jul 12, 2021 | US News | India News | Global News | Markets

Sree Iyer: Namaskar, today is the 12th of July, Monday. This is episode number 201 and let us jump straight to Global News.

In Global News, Virgin Galactic Branson Soars to Space Aboard Rocket Plane – as Elon and Jeff Bezos Get Ready for their own flight. Welcome to PGurus Channel Sridharji, and it’s a great Monday morning,

Sridhar Chityala: Great Monday morning. Good morning to everybody and good evening to folks in India, and, you know, the rest of the world and good afternoon to those in Europe.

Yes, I think we had an exciting weekend and Mr Branson demonstrated that he is the Geek amongst the Geeks, and he has taken off on his rocket launched plane onto the skies, everything that he touches, he is able to turn it into a realizable outcome. So it’s quite an amazing thing. To me is one of the most influential personalities. We have to put in 5 people of the century. He probably is right there with others. So I think it was a great success and a great moment.

Sree Iyer: Novak wins Wimbledon to tie 20 grand slams with his illustrious peers, Roger Federer and Rafael Nadal. Vietnam learns to exploit, nationalist rage over Chinese Maps. China condemns, unreasonable suppression as the US expands its economic Blacklist. Xi and Kim Jong Un vow greater cooperation amid foreign hostility, according to KCNA, North Korea’s news agency. Suga and Moon are likely to hold their first summit during Tokyo Olympics, your thoughts, sir.

Sridhar Chityala: So my thoughts are, congratulations to Novak 20th Grand Slam amazing three titles this year and he is rapidly moved and he smashed his peers. Congratulations!!! He probably will go on to maybe win at least another two to three grand slams and setting an enviable record. The other thing that we have missed is again Britain misses a trophy at a global event and Italy comes back and takes away the Euro 2020, Congratulations to Italy, but England played a great game and best wishes to them.

Vietnam launching an embassy or a counsellor office in Bangalore is a reflection of their growing sentiments towards India, as well as, you know what, lots more synergistic alignment, in terms of the opportunities. They are more looking at Investments as well as expanding the industry. So an Honorary Consul General is a great recognition and it’s wonderful news for people. Apparently, he is going to be the first point of contact as a conduit into Vietnam from the state.

China is, as usual, there are more and more Chinese companies that are getting added to the Blacklist within the listing here. So they will be delisted and obviously, China is in rage. How does it respond? It responds by forming partnerships with like-minded if I have to use the word roguish countries, who is a better country than North Korea. So, Kim Jong Un says that you know, that’s fine form partnership and work together. To me, it’s a problematic development because the reason is that in the event of a problem in the South China Sea and the East China Sea the Renegade, North Korea is right sitting there and at least to some extent President Trump kept him quiet.

Suga and moon are much needed because Korea and Japan have had some rough weather in terms of collaboration and trying to work together, this is what the United States has been working eternally to form this trilateral relationship and no more quadrilateral relationship, its trilateral relationship, between Japan, United States, and Korea to move the agenda forward, depending on which time of the day you wake up, the US may have a different policy but anyway, that development to me is positive. Suga and Moon coming together in the Asian continent.

Sree Iyer:  Yes, we are still waiting to hear from the US press spokesperson as to why they keep flip-flopping like this as to who is pulling the levers from behind, but that’s something that we’ll have to wait for a long time. Europe has enough covid-19 jobs to vaccinate 70% of the people. EU Parliament seeks sanctions on Iran officials over human rights violations. Protests growing in Iraq, overpower shortages emit heat and dependence on Iran. And Abbas and Erdogan discuss reconstruction and reconciliation with Hamas. Sir, there’s never a dull moment in the Iran-Iraq area.

Sridhar Chityala: Never a dull moment in the Iran-Iraq area. First, to wrap up Europe, this has seen a resurgence in this Delta covid variance, very soon probably Lambda and probably another version have come as well. So, Europe says that it has enough vaccines so which is good news. So they can, they can dispense with it. And I think their vaccination rates has been much better than many countries in the world. They are around 60-65 per cent.

EU Parliament on Iran, again Iran is very much like the United States depending on who you talk to the policies vary, you have some people in your new became European Union who wants to have a deal and negotiations with Iran. And then you have some people within the EU who says hey you know we need sanctions to be imposed on Iran. Nothing is going to work, human rights. These are the persecutions that happened and you know, the political opponents who are being brutally victimized in Iran. I think this is around that.

As far as Iraq is concerned as you rightly pointed out, these three I’s Iran Iraq, Israel is going to be a permanent problem as we look around the west Asian region. And now another one coming into the mix is a new drama into this political triangle, right previously, it was Egypt. It used to be Iranians, it used to be Lebanese. Now we have the Turkish because Lebanon is up almost on the verge of collapse. None of this is you know augurs very well in terms of stability and peace. What you are seeing is very much fragmentation and islands of problems developing and there is no Global Leadership.

Sree Iyer:  Air defences installed in Kabul as Taliban gains control. In Ghazni and Takhar, Afghan forces hold control with Civilians. Chinese citizens evacuated as the Afghan situation deteriorates Afghanistan. See depending on who you talk to now, we hear that Kandahar and Mazar-e-sharif are under Taliban controlled. Where do you think are they going to stop? Are they going to completely overrun the country of Afghanistan?

Sridhar Chityala: Are there any doubts Sreeji? There is no doubt. They are going to not only completely overrun the country, the brutalist regime is going to be back in force. Chinese struck a deal with the Taliban. The Taliban forces had given an official press release, the Uighur Muslims are terrorists, so, China is dispensing with them rightly and they are very warm and supportive of the Chinese investment and development plan in Afghanistan. So that clearly tells you which way Afghanistan is going, 85% of the territory is taken, what is left. And if there are civilians and women fighting together with the Afghan forces that also tells you how long this is going to last. I think the Taliban has been preparing itself for the inevitable exit of the United States and the Biden Administration only accelerated it very fast, I think we’re going to be back into that repressive or aggressive regime in power. And of course, the United States is going to say I am helpless, What can I do? It is the local problem and there are enough forces within the present administration or enough constituent elements within the administration, who may just turn a blind eye and things will go forward. A very sad situation but I think that’s where we are.

Sree Iyer: And in Indian news, as the situation deteriorates in Afghanistan, India brings back, its personal and Indo-Tibetan forces from Kandahar. In a first Vietnam appoints first honorary consul general in Bengaluru. We referred to this in an earlier discussion today. Canada, Germany and Maldives open travel for Indian citizens. So, now slowly, but surely, few corridors are getting opened, sir.

Sridhar Chityala: Few corridors are getting open. It’s an acknowledgement and recognition that India is in control of its covid situation. I think it’s about 450,000 cases. India has 300 million vaccines, they have crossed the first dose, close to 70 to 73 million have crossed on two doses. So India is slowly making its way and they seem to be in control of the Covid, at least the variant two situation a well, orchestrated, so the corridors are getting open. I gathered that at least from the United States, the US via Europe, the Delta, which uses Air France, that Corridor is open, people are able to travel to Bangalore and Bombay in that specific corridor, which means through the French airports. I don’t think Britain is open as yet, but this German is a welcome development, Canada is a welcome development, of course, the Maldives very small population but significant. I’m told there another six more corridors which are being reviewed for opening.

Sree Iyer: New information and broadcasting minister to focus on provocatively combating fake news and negative media internationally. UP ATS arrests two Al Qaeda terrorists and recovers explosives and foils of a plan to Target, senior BJP leaders. India to construct, 60,000 kilometres of world-class National Highway as Mr Gadkari continues his Infra push. India crosses 300 million first doses and 71 million with two doses. So, the vaccination plan is well along.

Sridhar Chityala: The vaccination plan is well along they an average rate depending on how many centres and what the distribution is, average somewhere between 3.54 million to about 5.5, 6 million. So, 4 to 6 million seem to be their vaccination rate on occasions, they’ve touched that. This number could dramatically change once they have more vaccines coming from August, you remember July itself, there is an acceleration in August you’re going to have Sputnik, you probably will have Moderna. And you will also have more manufacturing coming from Covaxin and Covishield in the process that the vaccination rates will further accelerate, so that’s pretty good news.

As far as, there is one person who is in the news every day, making some announcement and building a road somewhere in India, that is Mr Gadkari. I mean, he never loses and always, every day, he is active with new projects. Now, I think this is a very positive development, if I am correct, which is Rajiv Chandrashekhar, who is a technocrat from the University of Illinois, he has worked in the Silicon Valley, he is also a Minister for State in the Information Technology and Communication and so on. So at least, they have 2 technocrats who understand the space and domain very well, being part of the Board of the Telecommunication and Information Technology Ministry. And that’s good news both to deal with the tech platforms, but also to the extent of rebutting the news that is coming out and also tracking Social channels where there are no mechanisms to control, but let’s see how they combat that. So these are all positive developments.

And I think India has done the right thing. They have assessed the situation and have started to move people out of Afghanistan, which every country is doing. Australia had its last group leave, EU has its last group leave and I think very soon, the United States will have almost everybody down.

Sree Iyer: In US News, officials contemplate “Start Mandating” as vaccine rollout flounders and the door-to-door program receives wide criticism. You’ve talked about this in the past. Sridharji, with your permission, we will move on to the next topic. House, Republicans call for a comprehensive audit of pandemic related unemployment, insurance fraud. Biden infrastructure plan, stalls as reconciliation program is contemplated. So the reconciliation is between the House and the Senate. Isn’t it, sir?

Sridhar Chityala: Now, the reconciliation is very simply put a program together, give it to the president and he signs the order. There are only Democrats. That’s it.

Sree Iyer: There is no vote on that one.

Sridhar Chityala: No, a reconciliation bill is a bill that is written by the majority in the house sent to the president for his signature. Done.

Sree Iyer: So let’s get back to vaccination. There are some states that have got excellent vaccination numbers and others are resisting. And somebody is trying to draw a correlation that it is the Red States that are resisting vaccination and the Blue States are well along on the vaccination path. Your thoughts before we move on to our next item.

Sridhar Chityala: First and foremost, I think our vaccinations has stalled at 48%. They are right in the assessment. The gap is depending on which state. If take Texas, Florida, California, and New York, California and New York are just above 50% – 51%. Then, if you take Texas and Florida, let me quickly look at the number. So Florida is at 47%, Texas is at 42%, California is at 51%, New York is at 55% and Pennsylvania is around 50.7%. So there’s some justification in people making the statement that there is a clear divide between the Red States and the Blue States. The argument the Red States will therefore make is that we are probably not in tall structures and so on, and we have been able to combat this better even during their Phase-1 and the emerging Phase-2. So, there have been adverse reactions to the vaccination, so this would be the reaction. So my own personal thing is, it is time that the Red States take a more positive view or trustful view, rather than a positive view, trust the vaccines and move forward rather than apprehensions around it. Because without vaccinations, I just don’t believe how the United States is going to combat the variant-3. So I think, there has to be an education program. I don’t support this door-to-door knocking because it’s a fundamental violation of privacy. But more awareness and educational programs. I think we have talked about this for almost 18 months. One can go back to the first 5-8 programs in DGI, we’ve been saying that there has been no awareness education, there’s been no awareness education. Rather than awareness and education, we have all this stuff. Just to wrap up this point, there is a lack of… They’re not approving the booster vaccine which Moderna and Pfizer have demanded from Dr Fauci. He is saying, let’s first get this. So emergency approval has not been given which also creates a little bit of a problem. What happens to the people if these vaccines one and two is not sufficient to combat for some of the people who have been vaccinated.

Sree Iyer: Texas is now investigating 386 more cases of voter fraud, Attorney general reports. Pennsylvania orders counties not to comply with the GOP Senator request for 2020 election data. So, a Republican senator has requested for the 2020 election data and Pennsylvania state saying don’t comply with this, why sir?

Sridhar Chityala: Tom Wolf is the Governor and he says, no, don’t comply with it. Then, you have the judicial branch which is also supporting that. the legislative branch is saying go for it based on their visit to Arizona and Arizona election audits. They say that we should also do it in Pennsylvania. So many states are following. You’re going to see this tussle going on saying that this is political. So this election is not going to resolve. So, therefore, everybody must-read, ‘Who Painted my State Purple?’

Sree Iyer: Thanks for that pitch, sir. It is usually I who is doing it and then let’s move on. YouTube deletes CPAC video about the Trump lawsuit. ‘Group cannot load content’, that’s what YouTube says. Judge issues an injunction against Biden’s USDA over a race-based loan forgiveness program. This is interesting. There’s a lot of stuff going around the loan forgiveness program. However, I have not heard from my bank on my application. So I don’t know where the money is going to? Certainly, it is not going to the ones who need it the most. Your thoughts, sir.

Sridhar Chityala: My thought is, I think we’re going to do… We haven’t planned but probably this Saturday or very very soon, we are going to do a Fireside just to draw up the whole distribution. How much money has been allocated and spent? Folks, you got to understand, whenever you have billions and billions and billions of dollars dispensed, there is going to be a fraud. There has been fraud doesn’t matter which government agency is doing it. Whenever a government is involved, then you will probably take it for granted that there is going to be a problem. There’s a tremendous amount of fraud and on top of that you have this discrimination, which is if you are this, you are forgiven, if you are not this then you’re not. I mean a poor guy is a poor guy, doesn’t matter whether he is white, black, brown, or green. But I don’t know why they don’t use, even in the developed nation such as the United States, why they don’t use the economic criteria. But they bring back all this other nonsense.

Sree Iyer: Capitol Police to use Army surveillance system on Americans to identify emerging threats. Big brother, sir?

Sridhar Chityala: Big brother, yes. I think surveillance is coming. Look, I think a Democratic Administration or the Progressive Democratic Administration wants to have complete control of your DNA. Where you live, what you do, whether you got vaccinated, whether you’ve got a loan, who do you vote for, are you a registered voter or unregistered voter, can we give you a voter roll, how many children do you have, have you received this benefit; that benefits, do you want this application, they pretty much want to know where you go, what you do and whenever you go are you carrying the blue flag? So it looks like they pretty much want to control. This is military-level surveillance that is used by the US military in places like Afghanistan and Iraq, where they were remote managing and monitoring activities when you have a limited number of forces but you have very hostile terrain around you. So that’s what they’re going to bring to Washington DC. So, on one side you talk about privacy on the other side you’re talking about this kind of surveillance program. So there’s been a lot of pushback against it, but what do you do? You have prevailing administration that believes in it.

Sree Iyer: Let us take a look at Markets now. Finance ministers from the G20 countries, back a Global minimum tax plan of 15%. I think it’s a big win for Janet Yellen because usually, they will be one holdout or the other. Your thoughts, sir.

Sridhar Chityala: There will always be objections but the G20 in principle has endorsed and decide to move forward. I think it’s a very good outcome for Janet who has spearheaded this particular program. Hats off to her.

Sree Iyer: Second-quarter earnings season kicks off in the week ahead, with reports from major Financial companies. Earnings for the S&P 500 are expected to be up a sharp 65% compared to a year ago when the economy was shut down because of the pandemic. Sir, with this, we come to an end of today’s program. If you want to summarize your thoughts on the market, then we can call it a wrap.

Sridhar Chityala: Yes. Two observations. One is that the bank’s kick-off usually, we had a trend projected so we expect decent earnings from the banks. So, therefore, the earnings numbers are expected to be pretty good. People have to be careful about the 65%. 65% is the corresponding quarter last year. Last year during the same period economy was deflated. So, therefore, the 65% is calculated based on the last quarter’s projections. 65% relative to a year earlier when markets were really down. A look at today’s Morning News is the markets are flat after a bumping bumper last week, and Friday was a great win for the markets. That’s the story that we’re going to have. I mean, nobody needs to lose sleep on that. We’re going to finish 2021 well ahead of time, already we are up.

Sree Iyer: Thank you very much, sir. We will be back again tomorrow. Namaskar.

Sridhar Chityala: Namaskar. Thank you, and have a wonderful day. We’ll see you all tomorrow.