EP 207 | Daily Global Insights | Jul 20, 2021 | US News | India News | Global News | Markets

Sree Iyer: Namaskar, Today is July 20th, Tuesday, and Welcome to Daily Global Insights with Sri and Spree, Episode 207. In Global News, the United States NATO, and the European Union blame China for the cyber-attack on Microsoft Exchange Service. The US Charges 4 Chinese Nationals working with the Chinese Agency in the Global Hacking Campaign. All China can do is talk, Taiwan official dismisses Beijing Threats after US Military Carrier Landing in Taipei. The US Defense secretary Austin to visit the Philippines, Vietnam and Singapore as Washington seeks a coordinated approach to tackling Beijing in the South China Sea. Namaskar, Sridharji and your thoughts on what is happening around the world?

Sridhar Chityala: Namaskar. Good morning to everybody and nice to be back on this wonderful Tuesday after a very big set off in markets, but we are making our way back. Now, coming back to the question, it is very clear, you know, I think the Microsoft Exchange Server is attacked that one is alluding to relates to a whole breach that took place around emails which hacked into small businesses, private, government, various agencies around the world and I think everybody is now saying that it points to clearing the imprint and hand of the Chinese.

As far as your specific questions around the South China Sea, what’s happening around the South China Sea? I think Taiwan is saying it’s all, you know, fluster and like if they want to attack as you know, let them go ahead. And then, we’ll deal with the situation as is appropriate. What is also disconcerting is, what has happened to Quad? Because there are more and more attempts by Lloyd Austin, as he visits the various countries such as Vietnam, Singapore Etc. It raises questions including the Philippines. What has happened to the two-tier strategy? Where Quad is the overall architecture for South China Sea security and with the appropriate Nations, which formed the various block like some China block is ASEAN. Then you have the Indian Ocean, then, you have the Pacific and have the East China Sea. So it seems to have dissipated. There seems to be a complete reluctance or unwillingness on the part of the Biden administration to come out very clear with what is the story with Quad or they can say look we have revisited and we are adopting. We are a much more segmented strategy. The segmented strategy, if it has to do with the Indian Ocean, we bring in India, France and other people in. We are dealing with the South China Sea which is a much more cluster of Nations than we bring your whole swag of European nations NATO allies. And so on or if you’re going into the East China Sea where there is this problem between Japan and Korea in terms of coordination you know we may bring other nations in to look after you know, especially the Taiwan Strait because Taiwan is the question. So there’s no clear statement that is coming out from either Kurt Campbell, who is supposed to be in charge, or from Antony Blinken. And then, you have Lloyd Austin going, and making these independent visits and trying to build a coordinated set of actions. We recall ASEAN was very comfortable with the Quad approach, which is to say, the US is back here, we have a set of four nations is led by Japan, Australia, India, besides the US to cover the security interest in being in the South China Sea. So, this is what we continue to reaffirm that there is clear ambiguity, barring this 1 billion vaccine effort, which happened, you know, when Biden assumed power, everything seems to have dissipated as far as Quad is concerned.

Sree Iyer: South Korea’s Moon, decides against a trip to Tokyo for Olympics as Summit Talks Collapse. Both nations fail to narrow their differences. Japan considers reassigning Diplomat after Gaffe in Korea. So, South  Korea is now essentially distancing itself from Japan. This is a historic cultural thing that has been happening for a long time, but this seems to be a new low in the relationship. You have thought, sir.

Sridhar Chityala: I don’t think they were a reproached on the broad Korea-japan issues going back to World War II and the prior history of impression and so on and so forth. But, you know, I think that it was simmering, and now this new trilateral approach that Antony Blinken, Biden, Lloyd, Austin, trying to bring together, seems to be not working, which is we need to get China, Japan and the US on this trilateral approach. But unfortunately, those discussions, don’t seem to be progressing well, and in China, I think we covered this in DGI. Korea is playing a very soft and very clear and risk-free game where it is saying, on one side it will deal with the US and on another side, it doesn’t want to antagonize China because of the huge border.

Sree Iyer: As coronavirus cases surge public sentiments for conducting Olympics, has soured. And there is very little support. As a matter of fact, top sponsor Toyota pulls all Olympic TV Ads in a blow to Games. They will not be the last. Toyota officials have criticized the IOC that is the International Olympic Committee decision making process and Communications with sponsors.  President, Akio Toyoda will not be attending the Friday opening ceremony. Akio Toyoda is the president of Toyota Corporation. Sir, with Toyota now pulling out. These games must have taken a fairly big hit in terms of credibility.

Sridhar Chityala: There is and the public sentiments in Japan and specifically in Tokyo seems to be moving against hosting, the games in the middle of a big pandemic which is affecting them. Now, hosting games with empty stadiums and with reluctance around crowd participation and the prime sponsor Toyota unwilling to release ads doesn’t augur well for either the game’s or for Japan itself as a hosting country, seems to be a lame duck. I’m also heard that at least five athletes have tested positive in the initial testing phase and as games are on this Friday. This is not the last. What exactly are the repercussions if we don’t know. So this has been really a problematic area for Japan.

Sree Iyer: Has Beijing Investments in the region won over Tibetans, the report by Nikkei contradicts the reality with the Tibetan Government in Exile and Devoid of any Democratic principles. Forced Migration and the compulsive waving of Red Flags dominate the scene.
Essentially the PRC and its friendly media are trying to portray a picture as if all is well in Tibet. And that the Tibetans have completely embraced the Chinese philosophy, but looks like that is not really the truth. Why is this painting over happening again, Sir? We all know the truth.

Sridhar Chityala: Well, first and foremost, I think you have to commend Nikkie for sending a reporter, it was an orchestrated and managed navigation of the various areas of Tibet is quite huge various areas around Tibet, including the Buddhist University and so on. S,o there is good pictures and a well-detailed article, but when you read through it, it’s very clear that it’s very orchestrated and everything is around one China, you know, 70 years of integration of Tibet into the Mainland and so on and so forth. But on the contrary, you have you know one Tibet policy initiative, from here you have Tibetians being you know, lauded by India, Tibetan government in Exile Dalai Lama to be chosen and appointed by China rather than from the monastery. It’s doesn’t integrate very well but nevertheless, it’s a report that has come out but it just tells you how different the reality is to what is being put out in public.

Sree Iyer: And Japan approves COVID Antibody cocktail used to Treat Trump. Delivered via one-time Intravenous Drip the Cocktail Combines the monoclonal antibodies Casirivimab and Imdevimab which bind to the surface of the Virus to prevent replication. EU overtakes the United States in first job injections, EU now is at 55.7% versus 55.4% for the United States. So your thoughts on this medication that was given to Trump, which made him come back on his feet in like days.

Sridhar Chityala: Well, there seems to be some element of, you know there was a controversy around why he was given and why others were not. There was an emergency approval to Regeneron which comprises of these antibody compounds one is Monoclonal, antibody compounds which basically seems to be a much more effective mechanism to combat it. Again Manufactured by Roche. Why is this the case? I mean it begs the question, but what Japan has done, it looked it as it has worked there. So let me kind of bring that to bear and see whether it will help right in the middle of it Olympics. So, we leave for another day as to why this has been not approved formally, you know, for sure wide use across the world, you know, begs the question but we leave it there.

Now, on the EU side, the percentage is very small but the EU wants to tout that it a program of vaccination, has advanced notwithstanding the fact there have advanced, there is still a lot of resistance, you saw in France and to some extent in UK people resisting and coming to the streets and saying they’re not taking vaccinations. The reason is we are hitting a hurdle rate of this 50-55 per cent, you know for vaccinations in both the United States and Europe which is not very good given the advancement of the Delta variant.

Sree Iyer: Iran based on Islamic leader terms withdrawal of the US forces from Afghanistan as a great victory for Muslim nations.  Afghanistan removes its diplomats from Pakistan over Kidnapping and Torture of its envoy in Pakistan. Sir, look together Why is Iran exerting over what is happening in Afghanistan? Afghanistan is after all Sunni, sir.

Sridhar Chityala: There seems to be a strategic interest between Iran and Afghanistan. If you recall, Iran has indicated that it is willing and openly negotiated to bring Taliban and the mainstream Afghan government from a negotiations point of view. There have been skirmishers around the Iranian border, there is also attempts by the Iranians to say that willing to whine. So, you know, that’s one aspect of this discussion, it’s all geopolitical within the context of what’s happening in Afghanistan’s centre point of Interest, not just for Iran, but Turkey, Russia, China and so on and so forth. Of course, needless to say, the Pakistanis in terms of the Afghan diplomats being removed from Pakistan, I think, is a telling sign that the moment, the United States forces, left, security seems to have a lapse in Pakistan. And the incident that happened was not very welcome, just puts them in a bad light.

Sree Iyer: Now, let’s take a look at India news. Suzuki is going to be launching Electric Vehicles in 2025 and the Indian Market to be the first one that it will be launching them in. India exported finished steel of 10.78 million tons in 2020-21 compared to 8.3 million tons in 2019-20. Services sectors export may grow 10% in the fiscal year 2022, while it contracted by 3% in the fiscal year 2021. The fiscal year sector volume was $205.27 billion. Domestic procurement and Defense corridors are government programs to lift, made in India programs, in the defence sector and the Indian government allocates 7 1,438.36 crores for these programs. Export hubs face labour shortages as workers, continue to stay away. So, looks like the problem that is plaguing the United States is also plaguing the other countries.

Sridhar Chityala: Yes indeed. I think the most notably India taken in the context as a whole, it’s great that Suzuki is using India, even Tesla is also, contemplating electronic vehicles and the Karnataka government is working hard to get its Factory in Karnataka. Basically is to say the export sector seems to be gaining momentum. Steel production is pretty good, you know, so that part of the various sectors we have talked about of the export side seems to be firing which is helping India much more rapidly to regain momentum in terms of getting back on track and domestic needs to be stepped up and I think we covered about it. There’s probably some kind of stimulus needed to stimulate the demand side.

As far as the export hubs facing a labour shortage, which is basically, people are still reluctant to get out and go to remote places and work. There are still operating within the perimeter of a safety-first work environment rather than going in and working in remote places. That’s the consequence of these export hubs.

Sree Iyer: Growth in the fiscal year 2022 is projected to be around 11% in the economic survey says the chief economic advisor of India K V Subramanian. V-shaped recovery is only on well as far as a business activity is concerned that when business resumes says Nomura. India’s strong fundamentals and market size will continue to attract investment say, Finance Minister Nirmala Sitharaman. FDI inflows rose 25.4% in 2020 from USD$51 Billion in 2019 to $64 Billion in 2020. India is the largest recipient in the world. So, there are two opinions about the FDI inflows. First, I’ll let you have your say and then I’ll add what is the second opinion?

Sridhar Chityala: The FDI comprises essentially three elements and I think we have discussed this at length. One is around one which goes into the markets, second, it goes by way of capital into various Industries. And I think the third is that the money goes into alternate Investments such as private equity and Venture Capital. India has been receiving a significant amount of capital in the private equity and Venture Capital space. The FPI Foreign Portfolio Investments is also seen a significant amount of growth. At a macro level, the story is about the consequences of China and issues around China. China is still the number one recipient. There’s a significant amount of money that is flowing into India as Emerging Market sector allocation goes on the inflow of capital is concerned that is just my view from a macro point of view.

Sree Iyer: So, here is an alternate opinion on the FDI inflows, one of the opinions being touted out t is that if you look at the percentages of the FDI coming into India, 28 per cent is coming from Mauritius, 26% from Singapore, the remaining is split across the United States, UK, EU, the Middle East and so on and so forth. So people say that one is two dollars is coming in which is actually politicians ill-gotten gains finding their way back to India. Because India is politicians feel they can better protect their own investments in India than abroad as so many changes are happening to taxations in tax Havens and so on and so forth, whatever it is. Indian politicians are patriotically corrupt. Let’s put it that way, and leave it at that point. And let’s move on to the next news item Union Home Minister Amit Shah on Monday lashed out at the opposition Congress Party and international organizations for suggesting that the government was involved in surveillance of phones of politicians, journalists, and others, saying it was a “report by disrupters for obstructers” who want to derail India’s development trajectory with their conspiracies. Ask Sharper Questions and allow Government to answer questions, Modi responds to Opposition. A spectre of disruption haunts the Monsoon session as 26 Bills planned in 19 sessions. Yesterday, got off to a very rocky start, I believe that many of the new ministers were not even allowed to be introduced on the lower floor, Lok Sabha.

Sridhar Chityala: I think that even Dr Puri has come out and you know made a statement that several people have come out and made a statement. See what is going to happen is very similar to some of the models that we see in the United States you know the bills are going to get through. You cannot stall a nation by hooliganism and by conducting these types of unwarranted, undemocratic methods of engaging, the other members of the Parliament, they are elected members so you have to engage you don’t stop. But this is the gorilla democracy that has prevailed in many of the dysfunctional democracies. I think we saw another example of that, which is the Texas Democrats, we saw that they are willing to fly away and not be part of the session. Whereas in India they’re saying, you know, we kind of make enough noise, noise, noise, noise, and will not allow any proceedings, any business to be transacted. It is not a very healthy business practice. You want to debate, but the issues on the table. You hear the pros, you hear the cons, that’s the sign of a healthy Educated democracy. You know, despite years and years you see the same type of behaviour coming through, not very good but India get through, I mean it’s a large country that has got through and it will get through and things will move forward, sir.

Sree Iyer: India vaccinates 406.48Million Doses as Active cases, slide to 421,665. The recoveries are at 30.308 million and Deaths at 414,108. These are the Covid numbers. So, your thoughts, I think India is stabilizing again; there are really no detractors who say that. India is not counting them. It is undercounting be that as it may. At least on the surface, it appears that things are coming back to normalcy. That’s how I see it. Sir, your thoughts.

Sridhar Chityala: No, I think that your observations are absolutely correct. I don’t know why there is an overtly critical which seems to be purely political rather than the reality of the data somehow, I didn’t do it. So therefore it has to be bad. You did it. If I had done it, it is good since you are doing it, it is bad. The fact is that 416 a million doses are a remarkable number, given that where India was in various vaccination programs in the past, look at the world around you and see for yourself and then you answer the question. Whether you maybe would have done 500 million, but the fact it is still 416 million that has been given. And look at the asynchronous, asymmetrical methods, on one hand, the Supreme Court says, Ok particular set of people cannot go, please block them on the other side, they say, for three days you open up the Pandora’s Box and everybody can go and mix. So this is the type of situation, they’re still apparently close to 27 million vaccines available within states some big number. Okay. Whether it is 20 million, 18 million, a big number of vaccines are left.

If they’re not using it, they may as well export it because I saw Nikkei saying India’s variant-2 has caused hiccups in its vaccination diplomacy agenda. I tell Nikkei, no India must take the vaccines that are not used by its states because they are unwilling, send it out to people who need it because at least those people can be saved other than the people who don’t want to use it. So, therefore, to me, this is a very good outcome – 406 million. The United States has not reached 400 million as yet but as you’ve rightly pointed out whether the numbers are higher or smaller or lower, the vaccination program continues. One has to face the consequences of the pandemic, the world has faced the consequences of the pandemic, India is no exception, where it is very densely populated.

Sree Iyer: Let’s take a look at United States news. Newly released US Labour Department data confirms that Republican Governors are leading the way in Americans getting back to work. This is about Republican Governors who continue to support the American jobs are rising and unemployment is lower in states with Republican Governors and legislatures. 17 of the 20 states that have Republican Governors and 18 out of the 20 states that have Republican legislators where jobs have recovered since the pandemic. So the overarching observation is that you have to open it as well as keep it under control where there is a higher incident of the pandemic that balances those states that have achieved it appears to have done better than the other states which have been saying, close it, close it, close it including California, sir.

Sridhar Chityala: Including New York. So, the states that say they want to shut down will not have any productive work are going to see rising prices of the core items like the food. The food prices have risen enormously particularly in New York and some of the other states where you have a shutdown and there is also the issue of logistics around supply. But the key message is getting people back to work, give them an incentive without compromise on safety and security following the new protocols that are warranted for covid seems to be the magic behind getting people back to work. That’s the truth.

Sree Iyer: Sir, I’m seeing some kind of strange supply crunch situations, even basic things like nails, hooks, things that we take for granted these things take a lot of time to procure. These days, the way to shop is to go online and say, okay, I need this part and then one place says I have so many in stock, but then when you go there, they say we don’t have any in stock, then you get redirected to another place. So simple things are taking a lot longer now. So, in addition to things being priced higher, there are also supply chain constraints. I don’t know how long it’s going to be before this is going to be relieved. But America is really getting slowed down the way things are now happening as it tries to claw its way out of this pandemic.

Its American taxpayers, not foreign investors who are on the line for Democrats’ reckless spending says a study on the 3.5 trillion budget proposal. This is basically people who are commenting on the infrastructure budget, isn’t it?

Sridhar Chityala: Indeed, indeed. I think, basically, what they’re saying is that I mean, it’s a very obvious truth, which is if you look at capital gains when you look at the estate taxes when you look at the higher tax slabs, none of these relates to any overseas investors. They seem to be insulated. It’s all domestic US taxpayers who are facing the music to make sure that this massive deficit-based budget program is supported with US investors and US taxpayers funding this egregious cause.

Sree Iyer: An audit finds Trump cabinet official Wilbur Ross misled Congress over the census citizenship question. Sir, what is this thing about? Wilbur Ross was in Trump Administration towards the latter part of his administration, isn’t it?

Sridhar Chityala: I think there was a census conducted, there was a question which was, are you a US citizen? You remember the whole issue around that. The census was to be restricted only to US citizens and not to all the other people, for example, the DACA program. People are supposed to be counted until the courts passed a different verdict. They were supposed to be part of the Obama Administration when the DACA program was introduced. They were supposed to have been counted. So in his briefing, he seems to have said that there was no question in conducting the census that the citizenship question was asked. So they found out that he has misled in his briefings to the house twice. So the audit report has come out.

Sree Iyer: The number of Texas Democrats who fled Texas are testing positive. Now, that number has risen to 5. So they all came on the same plane, they were about 60 of them. So, who knows, how many of them are infected! Arizona election audit will show Trump won the election in 2020. And that the majority of Republicans believe in it. The polls will show. Judge rebuffs voter rights activists’ move to block Georgia election law. Sir, this is now gathering momentum as more and more states are auditing what happened in the 2020 elections? And you said yesterday that when people looked at Arizona count, especially in Maricopa county, they could not find slips and matching documentation to justify the number of votes that candidates have polled. This is a black and white situation. If there’s a vote, they have to have a matching slip that says that this is the person that voted. If you do a name comparison, I am assuming at this point that this is all being done manually, so there has to be a match. How can the Democrats say… I’m reading in CNN, some nonsense, sir, that is they say that Republicans continue to drum up that this is fake. But for God’s sake, show us that there is a corresponding manual entry of the vote. People have double-counted.

Sridhar Chityala: I think a simple truth is, today, media is very clear, which is I believe truth the way I see it. That’s one side of the fence. Then I believe in false to be the truth is the other side of the fence or I believe in truth the way I see. So, you have 2 sides, the centre has gone in the United States. So you get two versions and the fact of the matter is that the elections were a hodgepodge process in the 5 or 6 or 7 or 10 battleground states. That is the truth, the hodgepodge process. Unless and until, there’s an objective, audit an objective, the independent unbiased mechanism is used one will not get to the bottom of it. Suffice to say, we have a problem and I think we have covered and you have articulated in many ways that India is electronic. The reason why the United States and India is brought together is that one is the largest democracy, the other is the oldest democracy. These are the two, at least functionally dysfunctional democracies. They are dysfunctional, but at least functioning democracies. There has to be a change in the processes and systems. That’s one part of it. The second part of it is you have a fundamental disconnect between whether illegals should be allowed to vote, whether DACA people should be allowed to vote, whether voter ID should be used to vote. So then you get into this whole constitutional question where there is a fundamental misalign between the 2 parties. So what we are witnessing is the vagary of the system in the oldest democracy which is supposed to be a democracy where constitutional principles have been set aside or cast aside.

By the way, many of these judgments come one way or the other way, depending on who was the judge and who appointed the judge. In the case of Georgia, the appointee is basically a Trump appointee who basically said that the law is in place. All the things that you are talking about are enacted and passed as a law. It is too late for you to come back, so, therefore, move on. Then, you go to Arkansas where the appointee is either Obama or Clinton, where for a similar set of data you have a very different opinion. So this what you are seeing, which is, depending on which side of the political fence, you are getting these varying or inconsistent opinions, which is making all these things though black and white in terms of no disrespect is being misinterpreted, and this vaguery will continue. 2022 elections are not too far and this is going to be very momentous and decisive where both Senate and House could flip the goal the opposite way as typically happens in this post-presidential elections. So interesting times ahead, Sreeji.

Sree Iyer: What really blows my mind, sir, is the denial some of the media sites are continuing to do when you can see on social media, on your own channels, people re-inserting and rescanning a ballot that was already scanned. I mean it goes out of the scanner comes back in and there is no cutaway, I don’t see any cut here to there and try and say, well they have just cut and pasted on it to make it look like new. It is very black and white. It’s very easy to see how this is being done. I don’t know why these results are not brought up in the public and shown that this particular vote happened three times and it was counted three times or two times and that essentially should be invalidated. You can only have a one-time count of a vote. I mean this is plain black and white common sense and people still continue to be in denial, it’s really strange.

CDC says to avoid travel to the United Kingdom as covid cases rise there. Extremely frustrating, New York Democrat rips Biden’s to open Canadian border. American Academy of Pediatrics recommends masks in schools for everyone, vaccinated or not. Biden says, inflation is temporary and urges more Americans to get vaccinated. The US transfers Guantanamo Bay prisoners to Morocco. The population now drops to 39. Sir, I’m running through a little bit here, but the point I think is that even if schools reopen, masks are mandatory at least until there is a clear control over this new variant. And for God’s sake, we have to stop this Wuhan lab. It has to be completely sealed and nothing should be allowed to come out because there are so many theories that are floating. Nobody has refuted them as to how you can freeze-dry the virus, take it to a new place and then set it open and within minutes, it’ll start spreading. That’s how they say that the Delta virus spread in the Dharavi slum in Mumbai.

Sridhar Chityala: I think that your observations are correct, I don’t think we’re going to accomplish that goal. Basically, it has become a strategic bioweapon for the Chinese in terms of the deployment at will, location and time of their choice to create enough disruption. I think we’re going to have this covid going on probably all of 2021 well into 2022 before some Nirvana occurs and something changes. But otherwise, I just heard yesterday, WHO official saying it would be a miracle to assume that this will be controlled by mid-2022 or even late 2022. So, I think we have to live with this. The UK a travel ban is quite bad, but the cases are rising and growing in many countries. You can see what’s happened to Southeast Asia.

Sree Iyer: Reminiscent of the Obama administration, cyber attackers continue to ignore Biden redlines. Sir, one simple thing, even if Biden says don’t do this, don’t do this, don’t do this, the workforce has spread across the country. Many companies have people working from their homes and the central administration can say, okay don’t do this, install this software, but there is always inertia, sir. You and I know, every day, even though 207th time we are doing it today, every day when we prep for it, there’s always a surprise. So what people do is try to avoid surprises and how do you avoid surprises? Don’t install new software.

Sridhar Chityala: Sir, I think this red line about Obama and the cyber attacks, I guess one is self-control in terms of what you pointed out, software enhancements, and other things and other types of forensic screening that needs to happen to make sure that you have, that’s one facet. The second facet is that I think the US Administration has perhaps woken up too late. It doesn’t have a combative or remedial measure in place to mitigate any type attack. That is why there is a tremendous amount of frustration. So Biden will be well advised not the issue red lines like his predecessor, his mentor, Mr Obama, but to say, no, we are working towards solving this problem and whatever he wants to say his political advisors can state. But there are no combative remedial measures in place to repel. That is why these people are acting at will.

Sree Iyer: Education Secretary, Miguel Cardona retreats from making Critical Race Theory part of the new school grants. I think that is a welcome move. You should not thrust anything down anyone’s throat. CRT is extremely controversial, in fact, if you ask me, sir, the members of the progressive should start practising ‘Maun Vrat’. It will make them better human beings.

So sir, let’s take a quick look at Markets now as we start winding down today’s process. The official body tasked with declaring recessions, the National Bureau of Economic Research on Monday stated that the US recession ended in April 2020, which means it probably started sometime in February 2020, and then it ended in April 2020. This is one of the fastest recoveries that I can think of. All this is thanks to President Trump and his timely stimulus, the recovery was very Swift. So just let’s take a quick look at this. We are about 38 minutes into the broadcast now but maybe one minute on why this is not being played up in the news today.

Sridhar Chityala: First and foremost, we have shared these graphs in one of the fireside chats where we showed three important data points. One is the dip V, in terms of the markets. Two, we showed recovery of retail purchases, how within 2 quarters we achieved the retail purchases. Three, we showed the unemployment data which went to about 14.2% and how, again, by the end of the year it had paper down to about 7.2 or 7.9%. No doubt, 3.5% – 3.6% was pre-pandemic unemployment but then it went to 14.2%. We pointed out this. The reason was unheard of, and this was the first time they put this big, almost 10% of GDP stimulus in one crunch directed at 4 specific segments. One is direct payments to people. Two, the PPP program which was directed at small businesses and three was the corporates and mid corporates being supported and four, from a credit point of view, the Fed coming into the way and the asset purchase program. We pointed this out and said these integrated programs helped to get the business back on track by the time we got to the third quarter of 202. We presented his data. Why Trump is having… because Trump is unilaterally hated by the media so, therefore, nothing, be it for vaccines, be it for any other program, the wall, the vaccines, the more stringent position around the world around the Law and Order, and then the economic management occurred you will not find anybody. And you can now see for yourself, on these four dimensions, we have massive issues in the United States. But this is an economic point of view, we are trying to make. We have shared all these data and even shared this data in the Fireside Chats that we conducted when we walked through the budgets and how the stimulus helped to recover. Of course, there are other problems in programs but it did not mitigate the recovery to occur and you can even see it in the stock markets.

Sree Iyer: Dow tumbles more than 700 points on the covid rebound and concerns around global growth. Investors are struggling to calibrate a strong recovery against rising prices and resurgent covid infections and uncertainty over the global economic rebound. Sir, what are the markets telling us today? Yesterday, it was a drop of 700 plus points.

Sridhar Chityala: It is telling us that they are as emotional and volatile and that is why you have the volatility index going like a yo-yo as covid cases rise. As more news comes out and more active cases are reported from the United States, there’s a sudden fear. More active cases were reported from, let’s say, Southeast Asia, which is right now with the Olympics being the hub of attention. Then, you have travel restrictions into the UK, you find that there’s a sudden fear. So they are reacting to the sentiments on that day today. So you say, okay, he is fine, we dealt with it and we go on. So you will find that within the next three-four days, the markets coming back. Sometimes people also, you can see these gyrations, some traders take profits because as you know, the markets are at all-time highs. Then you see the sudden dips and then things coming back to… So 2021, as I mentioned, we will find that the markets will be because as vaccination drives increase and even the variants take time to creep into some of the countries such as the United States, you will find that the markets will be reasonably fine and we’re already on all-time highs. I think that the real challenge is going to be, how are we going to get out of this covid and its variants, how we’re going to move into 2022. I think that’s where the real problem is going to come. Can we regain employment? Can we get more people back to work? Can we see the economy rebounding without stimulus? Why is there a 6% – 7% growth this year? Why is it going to taper off to 3%? Is the normalization possible? Some of the questions that you have posted, there is a supply chain issue, why certain products are not available? Has import substitution occurred because we want to ban many items from China? So these are all the questions for which there are no detailed answers available until you see them. We even covered many large retailers in anticipation of asymmetric demand trying to stock up their warehouses and regulate the supply of items so that they can manage the demand in a much more organized manner. For example, if you are shopping in Amazon Fresh and you ask for six cartons of milk, you will not get six cartons of milk, you will get 3-4 cartons of milk. If you ask for 4 or 5 packets of butter, you may get 3-4 packets of butter. This is an example of how, using an algorithmic model the retailers are trying to manage so that you don’t have a situation of major supply one day, no supply another day.

Sree Iyer: Absolutely and we’re seeing it firsthand in California too. With that, our today’s hangout comes to a close. We will be back again, tomorrow, bright and early. Thanks for joining, do click on the bell button and subscribe to our channel. Thank you very much, Sridharji. Namaskar.

Sridhar Chityala: Thank you, have a wonderful day.