Sree Iyer: Namaskar, hello and welcome to Daily Global Insights episodes to 220 to 224 are all going to be audio-only and Sridharji will be doing the audio recording. I hope you like this format as much as you liked our video format and give us all the support. Please do like it on YouTube. Share it on Facebook and like and retweet on Twitter and We are also on LinkedIn and twitch. Thank you very much and enjoy.
Sridhar Chityala: Good morning. This is August 9th, the Monday. Welcome to DGI episode number 220. We start with the global news, the most controversial on and off Tokyo Olympics concluded on Sunday as Covid cases, continue to rise in Tokyo. The US, China, Japan, Britain and ROC (Taiwan) make up the top 5 medal count and more countries sharing the medals reflecting much broader participation and in a competitive manner in various Olympic Games. Taiwan’s medal haul of 12 spurs pushes to change the name from Chinese Taipei to Taiwan.
China warns on interference in ASEAN to keep the US at arm’s length. China continues its tech crackdown widening it from Tencent to Alibaba causing turmoil in the markets. The Chinese companies listed in the US and other exchanges have seen Market valuations dip close to 800 billion dollars as a result.
In Europe Fires at the foothills of Mount Parnitha, in Greece had ripped through Lush forest and prompting the evacuation town after town. This now seems to have reached the suburbs of Athens causing alarm and panic.
Protests against Covid-19 passports were held across France on Sunday and in some other cities around Europe because this protest is now for to have access to restaurants, bars, museums and theatres. Everybody must carry some identification that confirms they had dual vaccinations before they are given access. This naturally has been resisted and people feel that it is not the responsibility of the government to control their discretion.
France promises Euro 100 million euros to Lebanon at an International Conference amidst collapsing the Lebanese economy. So this is a much-needed aid that is required to stabilize and inject cash into the Lebanese economy which began to see its disruption about a year ago ever since, the major bombing incident.
Belarus which has also been at the centrepiece of controversy with its communist rule and structure has tightened its border and amongst issues that it has with Lithuania.
The US Jewish groups, welcome, the new government in Israel and hopes that the broad-based government will bring stability and peace to the people of Israel and in and around.
As the new Iranian leader takes office his first meetings were with Hezbollah leaders and terrorist groups. This is again, caused alarm. Of course, there is no doubt Mr Raisi took on recognizing his past as background.
Rwanda and Mozambique army regain control in a port that was held by jihadists, Al-Shahab. Al-Shahab has connections to the ISIS or Islamic State-linked group. They regain control of the Mocimboa da Praia port, which is in the Mozambique region but right at the cusp of the Indian Ocean. This port was under terrorist control for almost two years since 2019.
The US Embassy in Kabul urges US citizens to leave Afghanistan immediately. In India Qatar, the special Envoy agrees that the Afghan peace process should be inclusive for its success. He meets with MEA Minister for External Affairs, Dr Jaishankar there’s no doubt that the only way that peace can be restored is if all parties are willing to sit across the table and agree on a resolution, otherwise it is going to be the same status quo as was the case, pre 9/11. When the fundamental law was enforced and everything was under the direct control of the Taliban much was expected, but little has happened, other than the peace that prevailed if one has to call it the Peace during the 20 years or two decades of the US and NATO presence in the Afghan area.
Pakistan replaces its belt and road head with someone who is close to Beijing. Most recently, one would have seen, we again reported in DGI, that Pakistan has had lots of skirmishes in and around the Belt Road Project areas, including blasts and casualties that has caused alarm in Beijing.
Coming to the United States news, as the Olympics conclude in Tokyo the US has led the Olympic medals table again with 39 gold, 41 silver and 33 bronze for a total of 130 medals.
Andrew Cuomo who has been at the Centrepiece of controversy with a number of alleged sexual allegations is using the well-played playbook that scandal-plagued politicians have used historically. Deny the wrongdoing, until the end. If and when the truth emerges then, the appropriate action follows that seems to be the protocol. A number of people including President, Joe Biden and the house leader, Nancy Pelosi have called for the resignation of Andrew Cuomo.
Elise Stefanik, the house representative from New York and the Republican leader says, covid restrictions is chipping away at the civil liberties in the United States. She’s talking about the various vaccine mandates, mask on, mask off, Kids to be vaccinated, you know, mask on in schools, mask on in public areas, Etc. So according to her, this is just basically imposing conditions with no scientific rationale.
Cory Bush who has been at the centrepiece of controversy who has led the stand for defunding the police moment, strongly feels that the police actions have caused many lives. So she is steadfast in her approach and she steadfast in her Zeal to advocate that defunding the Police moment. This even at the cost of poll prospects two Democrats, there is a growing chorus within the Democratic party and Democratic mayor’s most recently, the DC mayor, as well as the people in New York City, have asked for much more stringent law enforcement to make sure that there is Safety and Security preserved, amidst rising homicides in the past few months, ever since the new regime took over. Defund Police moment is not something that is very well accepted by any Community barring few selected members or a few selected, people within the community.
Trump continues to message GOP members not to support the infrastructure Bill. Biden makes a last-minute push for an infrastructure bill as the vote looms. So you can see contrarian messages, Trump saying to GOP, not to support, Biden making his plea, Hey, you know, I work with you guys. It’s bipartisan; please don’t delay it, any further. It is much needed. The delaying of this is causing already trauma in the society and this needs to be put in place so we can continue to support as we come out of the covid situation. So he makes his pitch for the bill to be passed.
Bill Haggerty the Tennessee republican is continuing to push for robust debate on the 1.2 million infrastructure bill in the Senate. He is suggesting that Mr Schumer, please don’t rush. Let’s just get through; we got the draft law now in place. Let’s debate. If there are any omissions and commissions, then we got to fix them before this gets passed. So he says no mood to rush it. Let’s see what Mr Schumer does? We now await wake the bill finalization anytime, and an announcement thereafter, unless there are some last-minute hiccups.
Coming to the elections, this election controversy doesn’t seem to die, the controversial, Mike Lindell CEO of my pillow, a very strong President Trump Ally has confirmed the delegates from 45 states have registered to attend a three-day 2020 elections, cyber 2020 Symposium in South Dakota. This is planned for Tuesday, he claims to have 37 terabytes of reputable evidence that hackers were backed by China switched votes from President Trump to Biden which he plans to present. Now, to respond to Mr Mike Lindel, Dick Durbin the Democratic senator claims that the actions of President Trump post-election were almost leading to a coup. So Durbin’s claim is that, you know, don’t keep going on with this election rhetoric examining the actions of President Trump and make a judgment, make an assessment and judgment, whether his actions post-election could be construed as an attempted coup. So we have January 6, Capitol Hill riots. Now, we have Dick Durbin, making a claim, whether the actions are President Trump, were surmounting to a potential coup, interesting.
Dr Fauci expects a flood of Covid vaccination mandates after FDA approval, remember we have emergency approval in place today for Pfizer, Biontech as well as Moderna. We don’t have approval as yet for AstraZeneca. We had approval for J & J, that’s just been held back, but they will all go through the formal process. But once the FDA approval is given for granted that it is firm and definitive, then, Dr Fauci thinks that more mandates can be issued, without formal approvals, you, can’t issue a mandate or you can’t make anybody comply to mandate, he himself seems to be taking that position. Vaccine mandate mask in schools, everybody say some schools and we some schools don’t agree. You know if you are in a red State there’s one set of rules. If we are in a blue State there’s another set of schools you even now have teachers union with general sides with the left or with the Democrats coming out in the open and saying that they are mandating masks into schools for school-going children. This is the same situation that we are grappling on the critical race theory as well.
New York City officials, and many small businesses objective proof of vaccine mandates. Now, in some of the cities, there is already this mandate. These is the varying mandates that are being applied between red States versus blue States because the vaccines are not formally approved by the FDA. So You have state-level mandates that are going on, they say that to come to the restaurants and to eat in restaurants and bars and other public areas, you need to have proof. Well, this is also happening in some of the workplaces that you have vaccinated, two vaccines to have taken before you can sit down and you know, gain access to the restaurants or gain access to work. We also have to begin to see mask mandates, being institutionalized by various corporations.
Next topic, Department of Justice launches investigation of Phoenix Police Department. There is an allegation that the Phoenix Police Department has used discriminatory or inappropriate rules in dealing with people with disabilities and other types of crimes committed by other people. And the investigation will focus on whether there was any discriminatory or any off the record type of practices and if so, then, the appropriate action will be taken. Why Phoenix? It’s interesting. Well, it doesn’t mean that it doesn’t happen in other police departments, but the DOJ has targeted Phoenix. Some of these things almost surmount to political, because Arizona is one of the places where the election issue has propped up and there is the audit plus there’s also the issue of 25,000 missing ballots. So it’s interesting as to how DOJ has gone about targeting one specific Police Department amongst many. DOJ also tells courts not to block the eviction moratorium after two courts deemed the moratorium unlawful. Well, this is the saga. If you remember, on August 2nd, the Supreme Court had indicated that the eviction moratorium is illegal, cannot be issued by the president, has to be only passed as a law by the House. It is never discussed in the house. So, as soon as the deadline passed which was August 2nd, Mr Biden extended the moratorium by two months and now the moratorium expires in October. House owners and the rental agents and everybody we are up in arms. They filed and the federal courts have granted them immunity from the moratorium, so which means they will demand rents. Until such time, the covid moratorium was prevalent. $215 billion had been lost as a result of inaccessibility to the rent. Within the covid structure, there is no mechanism to compensate these people.
Now, we come to the Texas Saga, Texas house, special session, adjourned again on Saturday, As enough Democrats were not present to complete to have the Quorum. This is postponed until Monday. I’m not sure whether on Monday, There’s going to be all these Democrats who are having their sojourn and holiday in Portugal are going to return. So you have a very strange situation with these Democrats who are supposed to be lawmakers have become you know, fine line lawbreakers whereby, they are enjoying this sojourn in Portugal when they are supposed to be in session with no rhyme or reason. Texas governor has issued an arrest order through the attorney general for not fulfilling their legal obligations when they land in Texas. We already have the other saga namely that they were quite generous. They didn’t test, they boarded a plane landed in Washington DC, gave a press briefing and negate their covid to other members. Neither the White House nor the others were willing to give the extent of people who were affected by this covid.
Moving to India news, India also had a very successful Olympic outing finishing 48th with 7 medals, the highest number of medals that it has won with one gold, two silver and 4 bronze. India also just missed a medal in women’s hockey and it’s golfer Aditya Ashok. Probably several other events, but especially Aditi Ashok was just the penultimate of the events and the Indian women hockey team made a tremendous impact after losing the first three matches is just highlighted
On the vaccine front, India crosses 506 million vaccine doses. It is a remarkable number when one takes into account that the first set of vaccines were only released in November. India was playing a pivotal role in simultaneously developing its in-house or homegrown programs with two major labs. Now, of course, many other Pharma companies, at least five others are in the business of developing vaccines. So to keep up its momentum, India also approved a single-shot vaccine from J&J. It is likely to come into production soon. India’s covid-19 active cases are at 406,822, and that’s at 427,862 against a total of 31.93 million cases. There is a concern in India as well, of the Delta variant. The daily rate of new cases is around the 40,000 mark. Just to give you a contra example, the United States is averaging between 100,000 – 120,000 new cases. India has also had a very high recovery or discharges rate which is around 39 to 40 thousand.
A very important development in the geopolitical arena, France, India, Australia is the new trilateral and it is going to be elevated to leaders level meeting between the three M’s – Modi, Macron, and Morrison. So, the M^3 will form the trilateral. There is no quadrilateral here, it is trilateral of FIA – France, India, Australia with M^3 or 3Ms – Modi, Macron, and Morrison. The foreign ministers have made and laid the groundwork for this meeting with the Maritime security, environment, and multilateralism as the top three priorities for this specific group. We don’t know whether there will be an in-person meeting or there will be a virtual meet along the sidelines of the G20 meet which is to take place in October. India and France also launch a Space Security dialogue to protect space assets. As you all know, India and France enjoy a very strong defence partnership. France has stood with India front and centre and has been a very strong ally in all formats, be it in the Indian Ocean, or be it around the Himalayan border.
Russian president Mr Putin is to participate in the UN General Session to be chaired by PM Modi. It just is a reflection that India is managing not only the complexities but adversities amongst various players with varying equations and challenges.
Eye in the Sky, India will launch its most advanced Geo Imaging Satellite – GI Sat-1 on August 12, How does this help? It will image the country four to five times a day. A very important data point. This will then enable it to track the region closely including the Border areas namely China and Pakistan. It will also keep a track of their environment, floods and a range of other things. So, these are very, very positive development both from a civil, as well as, from a military point of view.
Prime Minister Modi says, tap opportunities in the post covid world so that you can target 400 million USD exports for the rest of the year. So much of the GDP, which is largely due to covid can be made up through this export program. India is trying to leverage various diplomatic missions around the world, work with various countries and leverage diverse capabilities that India has thus contributed towards an increased income of $400 billion from exports income flowing through to GDP. Today exports contribute 20% of GDP to India, roughly around $530 – $540 billion dollars, if you take 2.7 trillion dollars as the reference GDP number.
PM Kisan Saman Nidhi program, under the program 9.75 crore farmers to get 19,500 crores rupees under the income support scheme on Monday, which is today. This is the second tranche.
Mr Goyal calls for an increase in handloom exports to 10,000 crores in three years. He has now taken charge of this ministry. Textile and Handloom is one of the areas where I believe India needs to give the impetus. India had a very focused agenda on Agriculture and one can already see the progress that India is making in that specific segment which is one of the key drivers of the Indian economy.
Coming to the state of UP, it continues to make progress on all fronts, be it infrastructure, be it vaccination programs, be it socio-economic programs, be it other activities or national infrastructure programs, UP seems to be doing extremely well. Its tax and non-tax revenue grow by 18.5% in July.
The Odisha government that is always focused on development gives consent to the Modi government for the 8000 crores, 382 kilometres coastal highway project that connects Odisha’sTangi with West Bengal’s Digha.
Rates remain unchanged. We talked about the MPC meeting and RBI ignores inflation and says, it will support nascent growth as the economy gets reopened after the covid-2 impact. That concludes India.
Moving to Markets. Dow and S&P closed at record levels on Friday, following a very strong jobs report. Dow finished 35,208.51, S&P closed at 4436.52 points. NASDAQ was slightly down at 14,835.76. Oil remained stable and the 10-year rates remained in that 1.2 band. Crypto made a slight advance. Gold, silver traded at the normal levels relative to Thursday. So broadly Market indexes saw a marginal increase in Dow as well as in S&P reflecting the positive sentiments in the job market.
But one of the other news that one needs to keep track of is there are more than 1 million job openings than people looking for work. In other words, there are 1 million job vacancies. This is the challenge that the United States is facing because of a government that seems more on giving the Dole outs or what you call the aid or direct payment aid and unemployment aid and other types of benefits which reflects the sentiments of people unwilling to return to work. They don’t want to come to work. They want their aid to continue. There was this issue of States stopping, quite a few states have stopped, of course, they’re all red states. They have stopped and they are giving incentives to people who return to work. Having said that there are still 1 million more job openings than people looking for work. That’s the key message. So what’s ahead for this week? Inflation holds the key for the week ahead for the markets with consumer and producer level inflation announcements is expected later this week. So will be closely tracking the consumer inflation and the producer level inflation index. Consumer inflation is already at 5.4% when we reported last. But we seem to have overcome that and the markets have ignored the inflation and continued its advancement in the market performance, purely, driven by two factors low rates and more stimulus.
With that, we complete the Monday Edition and we’ll see you tomorrow, bright and early around the same time in the United States, and early evening in India, perhaps mid-afternoon in Europe, and maybe an early night in the Australian zones.
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