EP 208 | Daily Global Insights | Jul 21, 2021 | US News | India News | Global News | Markets

Sree Iyer: Namaskar, July 21st 2021, episode 208. Hello and welcome to Daily Global Insight with Sri and Sree. Let’s begin by taking a look at Global News.

Global news Amidst Covid fears, Tokyo Olympic Games are set to open Friday as Japan tries to bring cheer to Olympics. Indonesia extends lockdown through the weekend. Singapore to tighten curbs as Covid cases rise. Delta hit ASEAN turns to vaccine mixing and boosters. We’ve already told you yesterday about the failure of some of the vaccine manufacturers such as Sinovac. Sridharji, welcome to PGurus Channel and Daily Global Insights. Your thoughts on what’s happening around the world, sir.

Sridhar Chityala: Good morning everybody on this bright but little hazy morning here from New York. Well, I think that Japan’s most important the world watches the Olympics kick off on Friday which is in less than 48 hours. The games have started; some of the other games have started. There was the first game that softballs game between Japan and Australia.  And as you rightly pointed out, as Delta variant takes shape around Asia especially southeast Asia. Now, they are trying to use different combinations from cocktails to mixing and matching vaccines to ensure that this Delta variant doesn’t spread. There seems to be tightening of controls in Singapore so they’re not allowing mass gatherings, they are not allowing more than two. But, all in all within the context of trying to contain this epidemic or pandemic.

Sree Iyer: The United Kingdom will deploy permanently two patrol vessels to the Indo-Pacific following the deployment of the carrier, strike group, led by HMS Queen Elizabeth, where the quad has fallen out, the UK seems to have stepped in, sir your thoughts.

Sridhar Chityala: Well, I think it is very clear. I think Japan is concerned about notwithstanding the fact that the United States has been closely coordinating some actions with their SDFs Strategic Defense Forces. Japan has highlighted Taiwan as China-Taiwan thread as a threat, that is imminent to Japan itself. So therefore they are highlighted for the first time in the defense manual. So Japan is taking much more proactive steps and making sure that there is contingent plans in place to address the Taiwan issue in the event that there is an imminent or in the event of attack and the US doesn’t toe the line. So what they have done now they seem to have closely worked with the UK. The UK has now added a patrol boat, to already the strike carrier, that is set off in the Indo-Pacific area in the event of any adversity. So, this poses a broad question where is Quad? And right around this time, we reported yesterday, Lloyd, Austin is visiting, he is visiting Singapore, he is Vietnam, he is visiting the Philippines for broader discussions. Where is Quad in terms of much more coordinated exercises and saying that there is a defensive formation in place? China should not be flexing any muscles and Taiwan is not negotiable, but this is not Mike Pompeo, Antony Blinken is invisible and only, you see, Lloyd, Austin making trips around the region.

Sree Iyer:  China warns Lithuania over Taiwan opening a representative office and further, not to send wrong signals to Independent forces in Taiwan. China dismisses the US and EU accusations of a global hacking campaign. We talked about this yesterday. Also, I think Lithuania is the second country to give Taiwan recognition in terms of allowing them to use that name, isn’t it, Sir?

Sridhar Chityala: It is not only to use the name. Taiwan will be opening its first formal diplomatic representative office in Lithuania. They have provided the space. And that is formal recognition of accepting Taiwan as an independent nation. This is where the Chinese are getting flashed. And they’ve issued a statement that you know, please do not do it. Well, that’s what they do. And you saw the United States, respond very meekly, and especially Kurt Campbell made a statement, you know, we have to accept and understand the sensitivity in the region. As far as Taiwan issued his concern, this was his statement whereas Lithuania has taken much more bold measures.

The last point that you mentioned, whenever there is anything that is, linked with China, China immediately rebuts without any evidence anything which is simply to say that you know the US and EU allegations are false. We will come on this more in detail. Tomorrow. There’s another breaking news, somewhere between 2011 and 2013, that apparently, there has been significant Chinese hacking into petroleum and oil companies in the United States but we’ll cover. We are doing some research. We will cover that tomorrow.

Sree Iyer:  Absolutely, we will. Is Iran behind a new rocket fire and is this the new normal in the region? Israeli airstrikes reported south of Aleppo reports Syrian media with a factory and Research Centre targeted. Rockets land near Afghan president and Taliban denies responsibility. Afghan Army Chief to visit India next week to interact with top security officials. As if things it was not enough that the three I’s were very, very active. Now we have another smoking cauldron in Afghanistan, Sir.

Sridhar Chityala: It is. I think Afghan has become a real flashpoint with a confluence of Global political powers or aspiring Powers trying to have their finger in the pie. What exactly is going to be the outcome, one shudders to think about, but you can see that there are issues.  Why that Afghan Army Chief is visiting India? What exactly is the scope of his discussion in the middle of these issues, one begs question as the Taliban continues to gain space in the region. Apparently, the US just announced that almost 90-96% of its troops have left and there is very small portions remnants left and there’s also issues looming around what’s going to happen to all those Afghan citizens and allies who coordinated and cooperated with the log jams in terms of processing their Visas.

Sree Iyer:  Russia’s test launch of Zircon Missile likely to change Warfare rules.  Russia is also likely to unveil a New 5th generation fighter aircraft at an air show near Moscow. A promotional video featuring pilots from India, United Arab Emirates, Vietnam and Argentina were shown demonstrating interest in export. It’s pitched against the US F35 stealth fighter according to Russian experts. Now, Russia is starting to show off all its arms and ammunition.

Sridhar Chityala:  Russia is clearly demonstrating in each of the fields that it is competing. If it is not ahead it is at least on par. You saw that with the Russian Sputnik vaccine. He saw that with a space program. Now with a supersonic missile or Hypersonic missile, which is launching called the Zircon, which can be launched from submarines, which can be launched from ships. Apparently, it is a big game-changer in terms of conventional Warfare is concerned. Now they are unveiling the fifth-generation fighter, aircraft which probably compete with Rafael and the F35s. What they have done? They have done the promotional with India, Vietnam, and Argentina, including UAE. The UAE and Vietnam are big buyers of US equipment; of course, India’s number one arms supplier is Russia. So you got all these people lined up promoting the video. Simply implies that Russia is targeting these countries for export. Given the present situation in the United States, one will not be surprised if new Partnerships are formed with Russia in this particular field.

Sree Iyer:  France Investigates alleged Pegasus spyware used against dissidents, it is alleged again that it was Morocco that was spying on some French diplomats as well as President Macron. And again these are all allegations we have no proof of whether it was actually one other country spying but why Morocco is another interesting question. Sir, your thoughts on where this Pegasus spyware is headed? Because it is a worldwide thing.

Sridhar Chityala:  Well, I think Pegasus, it’s conceivable that some of this software may be present. Whether they actually were used for spying on whether they were discovered, and somebody is using it for political advantage or to create enough ruckus in the ecosystem, remains to be seen. Why they have targeted Macron? Macron is considered the man who is holding, EU together because he is the right, whereas most of the other governments in the EU or in Western Europe are social Democrats or with socialistic principles. And so, you have France being targeted and you have the French journalist in Morocco. Apparently, there’s a lot of NGOs, key political figures. Etc. This is an alleged theory, the question is will have no proof, it seems to have also spilt into India. So the two countries which are on the radar as it relates to this Pegasus are India and France. And Pegasus has denied that anything to do with this stuff or formerly involved. I think one of these Israelis companies has even sued the wire which was responsible for the publication of the specific report.

Sree Iyer:  In India news, the Indian government will not repeal the farm laws while prepared to speak with the agitating farmers. India’s macroeconomic fundamentals are strong, recovery is underway, according to Deepak Parekh the HDFC Chairman. He further added that the first half of the fiscal year 2021 was weaker impacted by Covid, while the second half looks stronger. Your thoughts on the Indian economy and on what is happening in India?

Sridhar Chityala:  Well, I think each and every day you are getting endorsements from many people who look at the data, you know Mr Parekh who runs the HDFC is very well known and he knows he has been looking at the Indian economy for many, many years, or many decades, if I have to say, so it’s good news, from an Indian point of view, and we have reported consistently various indicators Exports, Agro, Power, Steel, Energy, the uptick in the economy. So, as far as 2022 is concerned, India seems to be well on its way, which is also endorsed by the chief economic advisor. It begs the question, can India hit that 8% rate or still hover around the 6.5 to 7.5% rate, as it looks beyond because what you are seeing in the FY 22 is the latent effects of the economy’s reopening post-covid relative to FY21 in the Indian economic calendar. As far as the Indian economic calendar goes, the real question is FY22 another question is, what else is coming by way of Covid Delta and Delta past, which could create further that headwinds to the global economic recovery.

Sree Iyer:  Expect turnover from foods to touch up to 10,000 crores says Marico chairman. 6.66 lakh direct and indirect jobs generated by 22 operational mega food Parks says the Indian government. Kirana stores to go digital with more than 2000 stores automating, Inventory management and 5000 is a target for 2020. Stores have further upgraded to serve customers via Omni-channel by phone, by WhatsApp, and even branded apps. So, India is doing a major, push in the food sector, as well as trying to empower the Kirana stores.

Sridhar Chityala:  Kirana is, I mean, PGurus has covered this in the fireside chat and there were Suhel’s discussions which revolve around how to do kind of uplift and digitize Kirana stores that cannot be left behind. It seems like they are also changing their tune with times digitization of their inventory management, customer-facing apps, which allows them to place orders during this pandemic period. Plus, I think they are augmenting. This is the research report that I saw they are augmenting the delivery capabilities notwithstanding the fact most of these stores are quite adjacent in a village neighbourhood but the good news is that there is a momentum towards automating and taking them forward. Rather it is not destructive but it is transformative at least based on the agenda. I think Food Park is a great concept, it brings a lot of semi-skilled, other types of Labour into employment potential. This concept of 5,000 jobs for food parks or some 3000-5000 jobs of Food Park is a great idea and this is one of the sector’s where the economy is more or less come back to normal to pre-pandemic levels retail and food.

Sree Iyer:  Retail sales in June have improved to 50%  prior to Covid levels, food and grocery sales near full recovery, which is what you just said. The housing sector drives Cement demand for the April-May quarter of 2021. So, once the housing starts to happen that again is an indication that things are coming back to normal. Isn’t it sir?

Sridhar Chityala:  Yeah it is. I stand corrected it is grocery stores rather than retail, so grocery stores and full grocery sales and food stores have come back. Retail is still making its way up, retails is as much broader.

Yes, the housing sector is, I think if I am correct, here in the United States, healthcare is the number one employer in conjunction with the housing sector. So, the housing sector is one of the biggest drivers of the environment in India with the demand picking up that’s a reflection that things are coming back to normal. It’s one of the reasons why we saw the Cement sales as well going up. And on the steel, we reported yesterday, India, exported more Steel in the last quarter relative to the corresponding period, the previous prior quarter, all reflecting, that be heavy, Industries are also from the manufacturing side, making their way as the Indian economy tries to regain momentum.

Sree Iyer:  In an astonishing report the former CEA, Dr Arvind Subramanyam-led research report says that COVID 19 related deaths were understated by a factor of 10X. And this report continues on to say that this is without basis.  In another astonishing report in Nikkei, the author states that India’s vaccine diplomacy is impacted by Covid 2nd wave. Vaccine diplomacy is long-term and not immediate. Serum India is the largest producer of vaccines 1.4 billion vaccines per year, this includes many, other viruses, not just covid. I think this is a very, very slanted article. You know, that Mr Subramanian is now suddenly, on an economic advisory council for the state of Tamil Nadu. Tamil Nadu is like every other state in India is practically bankrupt. They are dependent on the sales of yesterday’s Tasmac to pay the salaries of today’s government servants and this is just nonsense. I don’t know why this person was even employed for three years, Sir, that’s just my personal opinion. Your thoughts.

Sridhar Chityala: Okay, so let’s delineate two things. First is Dr Subramani’s report, a report which says that India has understated the Covid impact by a factor of 10. He and 2 other people go on to conclude, this is based on some Southeast Asia Research Foundation observations and this is based on the research data from experts rather than the actual anecdotal data of evidence, which is what the government has stated. We Stand by our data. If you have data, tell us why it is a factor of 10x. Hence, I have stated it is without basis. This is my observation that it has no basis but except a leap of faith conclusion, based on observations and based on inferences drawn from the so-called experts.

The second one is featured in. I think written by either Karan Sharma or Kiran Sharma in Nikkei which says ‘India’s vaccine diplomacy takes a hit as a result of the covid variant-2 coming into India’. Now, the question, therefore, is curing covid is for more important, or is it vaccine diplomacy that is far more important. It just begs the question, are these articles paid and funded articles to basically express an opinion that is irrelevant. In fact, these guys should be writing about how India has reached 400 million, what it needs to do to get past it. In the first wave when India was less impacted when it found the world struggling it offered vaccines to every country that it approached. So there seems to be no contiguous correlation, but opinions expressed, which are made to prove one way. But having said that these people don’t analyze, what is India’s capacity, today? What is it doing? It is the largest manufacturer of vaccines in the world. It does export a significant part of its vaccines. It did export hydroxychloroquine when the crisis came. India is the number one producer of hydroxychloroquine. So there seems to be no anecdotal and holistic view but more a narrow aperture which is to serve a specific political purpose rather than an intellectual outcome that they want to communicate.

Sree Iyer: Now, let’s take a look at the United States news. Pride and patriotism towards the flag is still the dominant view, polls show. Jeff Bezos delivers as the Blue Origin rocket reaches space. Sir, with your permission, I’m putting up the next slide, wherein people say that 61% of voters agree with Trump on the need for state election reform. I mean, the flag, the country still is foremost in the minds of Americans regardless of what the progressives will have you believe. The more important thing is, the country now feels that there have to be some significant electoral reforms. Your thoughts, sir.

Sridhar Chityala: Indeed, I think 2 things came out. One is around the flag. You saw a whole spectre of people including the Olympians going to the Tokyo Olympics making statements around the flag, as well as what they would do and their allegiance etc. So, basically, the research shows that there is tremendous support. The research also shows that to have a fair and justifiable outcome, which represents the mindset of the people of the country. One has to have a very transparent electoral process and reform is needed. So, therefore, when you put these two things together, there is still a tremendous aspirational desire to keep the country moving on the right path with the right approach so that the outcomes of the elections put the right people in the position of power to run the country.

Sree Iyer: The US can count on me, says, Jordan King Abdullah after meeting the president in the White House and reaffirming the alliance. Pompeo accuses the Biden administration of working to make Iran America’s senior partner in the Middle East. Biden may send more staff to Havana to support the Cuban people. Will Biden do a zoom call with Gloria Estefan and Andy Garcia to shape his Cuban policy? I mean, this is more of a rhetorical question I suppose, sir?

Sridhar Chityala: No, he has confirmed that he is planning to have a zoom call with Gloria Estefan and Andy Garcia. He said that he is going to have a call to get their input on the Cuban issue plus he has also stated that he will send additional staff to Havannah to support the aspirational desires of the Cuban people. So, I’ve posed the question, are they going to shift the Cuban policy because he says that he wants to take it, he has very categorically stated that he wants to take input from them. In fact, I can read out what he says, the White House has announced on Monday, President Joe Biden held a zoom video conference call with Cuban American celebrities in an attempt to organize a policy in response to nationwide anti-communist protest on the island. So, this is from the White House. He has held a zoom call.

Sree Iyer: Two contradictory statements from Biden. Inflation is here and it’s going to get much worse. Ignores bipartisan warnings and stimulus and insists that inflation is temporary. Is it here to stay or is it temporary? That’s the question because the president is saying both at the same time. Chuck Schumer continues his bluster on the infrastructure bill and dares the Republicans to vote against it. June inflation report puts Americans on the edge. Lindsey Graham says adding amnesty to the infrastructure bill is the dumbest idea to ever make it to the Senate. Who suggested this, sir?

Sridhar Chityala: One and only one person our AOC Alexandria Cortez has suggested that it’s time to put all this immigration stuff or even granting amnesty so we can fund it. So you should be part of the infrastructure. Remember infrastructure bills and health bills are the placeholders, as we see here to direct them. You want to defund police, you want to fund the police movement, you take it from the health care. You have a bankrupt government, you have some immigration surges or illegal immigration surges, you take money from there to address issues. So it’s almost like these budgets have been created with placeholders so you can make money as needed and dispense them in. So, Lindsay is saying, if this is what you guys want to do, no wonder you need umpteen amount of trillions of dollars to actually get a budget through.

Sree Iyer: Florida Governor DeSantis says many migrants are heading straight to Florida after illegally passing through Texas warning that he has received information from many law enforcement personnel. And we have told you about how they just dissipate into the inner United States once they cross in. House GOP report hits Biden and Democrats on border crisis as stats show continued migrant surge. This is a clear and present problem, they have messed it up. And if somebody were to wake up and start reading the news, they would think that the Democratic party is only consisting of four members who call themselves by Squad. I don’t know what happened to the moderate Democrats, which chat has got their tongue. I don’t know what is going on with this border thing. This whole thing is very, very dubious, sir. So this is just taking a page out of congress’s playbook. Congress used to resettle Rohingyas all the way from the Burmese/Myanmar border all the way down to Jammu, where the margin of victory was slim and I might as well add this fact here, look at the average size of a Rohingya family that is taking refuge in India, 10 members per family, mind-blowing, sir.

Sridhar Chityala: Mindblowing. I think that this is about it. So, as we speak, there’s another report that has come out which speaks about what’s happening on the border and the numbers will cover that. I think sir you have summarized it very well. There’s a huge problem. It seems to be well directed and well-orchestrated which is to say, go to this city, go to this state. So it seems like a very well-orchestrated program. Unless somebody does a specific investigation, it is very hard to find, only now you can draw a correlator inference based on the data that is coming down. Anyway, enough said about this and the infrastructure bill and uncontrolled budgets are the two biggest threats and headwinds in terms of the awkward part of the US economy.

Sree Iyer: I have the next bitmap up, sir. Fauci and Rand Paul trade blow on vaccinations research on Delta variant. We had Rand Paul really blasting Fauci on the NIH funding for the Wuhan lab. You are trying to obscure responsibility for 4 million people dying. This is just incredible, sir. Your thoughts on this because we have more covid related news. In fact, it is believed that Nancy Pelosi herself has tested positive to covid-19 after coming into contact with the Texas Democrats. This is one of the most because snafus that the Democrats have inflicted upon themselves in my opinion, sir. I could be wrong. Your thoughts, first of all, on this Rand Paul-Fauci, I can only say conflagration in the committee where they are having these discussions.

Sridhar Chityala: You’ll see three diagrams which are we floating around three figures. First, basically, says Rand Paul debating with Fauci and saying did NIH fund Wuhan lab? Did it fund for some gainful purpose? If you knew that data, why have you not shared that data? Why have you not alerted people? Don’t you think you could have saved four million lives? This is the question, but he is after Fauci to say, what does he know based on the NIH funding that seems to happen which is acknowledged by Dr Fauci himself that the NIH funding did happen as part of, some $100,000 – $150,000 research grant was given. Go back to 2020, they all denied and basically said,  nothing is wrong, it’s research, there is no evidence that WHO did an investigation, all that kind of stuff. So you see that first picture.

Now you go to the second picture which comes to, you can use whichever you want, you come to Tom Carton. Democrats, last year, said it was a racial comment by President Trump to aspire covid as the China virus and they denied China has any role and now they’re confirming that it definitely looks like the China virus. WHO did its best and it has successfully renamed it as Alpha, Beta, Delta, now you have gamma and I don’t know what’s the next one is coming. So Tom Carton is making a very clear statement, which is to say you call the Wuhan lab theory was fake and you debunked it. Now you are saying, this is the case. This is the second.

Now you come to the third picture which is namely this great and generous Democrats who quit this special session in Texas and came to the White House and met with the representatives and first denied. Now the cases have gone from 3 to 5. It’s now confirmed that Nancy Pelosi has tested positive and then Psaki is basically saying that confirm’s hiding some of the staff who seemed to have had coronavirus cases testing positive. This is basically White House confirming. So, when you look at these three stories, it begs the question, one is around a Wuhan, the second is around the denial, the third is around the covid situation which White House is now confirming, what is the honest situation with regard to covid and the outbreak of covid and what is the information that is coming out from the White House that can stand the test of integrity. This is the fundamental question, which is at stake because this is a pandemic that is hurting the community and hurting the world. So, this is a very interesting discussion and fascinating series of activities that basically was encapsulated from yesterday’s discussions which happened in the White House, House, Senate etc.

Sree Iyer: Vaccination crime grows all over the country. Do your research and get vaccinated as vaccination rates falter in the United States. Sir, with your permission, now I’d like to go to Markets. We have been seeing some yo-yo-like activity in the markets. Markets rose 2% on Tuesday with stocks rallying and recouping most of the losses of Monday. Today, again, the Futures are up. Bargain-hunting counterbalance rising covid-19 infections in dine-in restaurants, airlines showed positive momentum in demand. Sir, with your permission, I will put up the next chart on how Markets stood. Go ahead, sir.

Sridhar Chityala: So we are sharing the data from CNBC, end of day data. It shows that Dow Jones futures were up by 200 points as we speak right now, S&P was up, all the indices were up. The chart below basically shows, on the prior day which is Monday we were 34,200, it took a dip and by the time it finished end of Tuesday we had gone past the position that we were in on Monday. So it’s basically showing that the gyrations are driven by opportunistic activity that is taking place and the markets are casting aside the inflation issues and moving forward based on earnings and based on the bargain hunting opportunities that are going on in the market. The good news is the dine-in restaurants are almost trying to get back to normalcy. There is demand on the airlines. So there seems to be economic momentum gaining as the markets begin to open notwithstanding the fact that there is a rising Delta variant. There is a positive disposition in the minds of the people. Also, remember that the United States is 55% fully vaccinated and they’re trying to get that number to somewhere between 70% to 75% which in turn can help to combat the delta variant.

Sree Iyer: With that, today’s hangout comes to a close. But before I sign off, I just want to update our viewers, we are adding more platforms to our Daily Global Insights and we will be giving you the data very shortly. Perhaps even as early as next Monday, you will be also able to watch the same program in a higher resolution. If you have, for example, a 5G connection on a 2K bandwidth, we are going to try and give you all that stuff. It will be a different platform, you have to again Subscribe to that platform in order to get those high-quality broadcasts. We are doing everything possible within our control, within our budget to make sure that you know this is the factual situation of the world around you. Everything that we put out is a fact by solid research and data. No, embellishment, we don’t take sides. News is news. News is the truth. Sridharji, thank you very much as always, and tomorrow, we’ll be back same time, in same place. The day after we are taking a break, we will be coming back on Saturday to cover Friday’s news. Thank you very much, sir, and we will be back again tomorrow.

Sridhar Chityala: Thank you. Have a wonderful day. We’ll see you tomorrow.