Sridhar Chityala: Good morning. Today is Aug 11th, welcome to Daily Global Insights with Sri and Sree. Welcome to episode number 222. As is the case, we start off with global news. The Chinese military is the armed wing of the Chinese Communist Party says the US Air Force. As such it has to be dealt with accordingly. The CCP provides the direction and set of actions that the Chinese military pursues with relentless and maniacal focus.
Blinken making his observations at the United Nations Security Council as part of the maritime security session that was held on Monday reserved his sharpest criticism for China over the South China Sea. And he may dire statements and warnings to the Chinese that any further incursions and troubles in the South China Sea will have major Global consequences, not that the Chinese are going to listen. But nevertheless, it’s a fairly affirmative statement coming from Blinken in a global event.
China court upholds Canadians death penalty as the Huawei CFO battle for extradition continues in Canada. Softbank to curb, China deals amid regulatory uncertainty. As you are probably aware, We have been speaking about this in aDGI or we have been reporting about this on DGI. Chinese companies listed in the overseas exchanges have been the target of retardation by the Chinese government and one has seen a significant amount of Market valuation losses. SoftBank has earned on the caution and says it will try to minimize or almost curb deals that it generally participated in as it relates to transactions in China.
Australia rejects the UN climate policy and says that China alone contributes to carbon Emissions that are greater than 38 countries combined, under these circumstances holding Australia is accountable does not hold water. Australia, if you may recall is one of the largest exporters of crude and the UN climate report targets fossil fuels, as one of the drivers of dramatic shifts in climate patterns and the consequent events that have unfolded namely floods, famine, fires and so on.
Attention now, shifts to Beijing, 2022 Olympics after Tokyo and there is a growing Chorus for the boycott of the China Olympics. The reasons, human rights, global violations of sovereignty and Border, probing of democratic principles, the Hong Kong issues. So there is a growing chorus in the world, it’s time for China to be shown the door and the world must unite in the boycott of the 2022 Olympics. Of course, one should not lose sight of the fact that the causes and the consequences of the pandemic that has been unleashed and what is called as Covid.
CDC urges, this is the US CDC, Center for Disease Control Urges avoiding travel to Israel, Thailand and France over rising covid-19 cases is fascinating, but it has chosen these three countries.
As the Belarus crisis deepens, I think we have discussed almost every day in DGI, the Belarus crisis, which is namely clamp down on, anti-democratic norms, that’s prevalent and imposed by the President in the country. There is now a growing number of illegal aliens trying to cross the Belarus border into Poland and also Lithuania. So, Poland and Lithuania, both are up in arms and forcing or trying to force Belarus to be compliant and try to control its borders. It looks like Belarus is now emerging as the next flashpoint in Europe after Ukraine there are no surprises here. The Belarus Lukashenko regime is very much supported by Russian President Vladimir Putin.
Moving to the Middle East and Africa, Israel and Egyptian ministers discussed natural gas trade lines. Egypt has been playing a peacemaker role. It has been involved with Israel in a number of discussions, be it Iran, be it Syria, be it Lebanon, be it Gaza or be at the Palestinian crisis. Egypt has played a very significant and central role in attempting to find a resolution to the matter. Along the way, it looks like Israel and Egypt have also, worked out a deal whereby, they can contemplate and workout natural gas trade plans. What was called the great Abrahamic accord the West Asia peace deal that was stuck during the Trump regime saw Israel, UAE, Bahrain, Saudi and the whole host of GCC Nations come together to work together in a peaceful manner, rather than the confrontational approach that prevailed. What one has seen during this period is Israel and UAE trade has topped over 500 billion this year and could reach 1 trillion by end of 2021 and probably 3 trillion according to one estimate in two years. But that’s a significant number.
Israel imported 372 billion dollars’ worth from UAE and exported goods and services worth 172 billion to the UAE. Remember we are also reported in DGI that India, Israel and UAE have also been working on a trilateral trade pact with UAE acting as the hub for a seamless flow of trade across these three countries.
Getting to Afghanistan, President Biden is under Fire, as Taliban March continues with relentless and maniacal focus. They’ve already taken over six provincial capitals with the complete and total meltdown of Afghan Security Forces. We reported yesterday B52 being sent, it doesn’t seem to have had much impact as far as the Taliban is concerned. And we also reported yesterday, they had almost reached the outskirts or one of the suburbs, not too far from Kabul.
The temple attack that took place in Pakistan is a conspiracy against minorities in Pakistan, says the Baloch Hindu Minister. Balochistan is one significant area, which has been aspiring separation from Pakistan and there has been a range of issues in Baloch, but the world has not taken cognizance while it tries to focus on a number of other human rights issues somehow, Baloch pales into insignificance or whenever there is a resurgence in the Baluch movement, some other issue props up and it is cast away. I don’t think India has also played a material role in trying to harness a piece. Anyway, Baloch Hindu Minister has come to rescue or at least made his statement around the most recent and it was very viral in Social channels on the attack that was Unleashed by a whole bunch of people in Punjab. This is the Pakistani side of Punjab.
So, we move from Global news to US news.
Yes, Democrats make a successful conclusion to their 1.2 trillion Infrastructure bill. It is now passed in the Senate goes to the House. It is getting drafted into the law for implementation. Great success says, Bernie Sanders and Chuck Schumer. The journey has just begun.
Democrats are now getting ready to push 3.5 trillion packages and ram it through Congress, through the reconciliation process with a new set of Health Care programs, child welfare programs, unemployment benefit programs, expansion of Obamacare, and amnesty to illegal immigrants, climate Accord and so on. There is also a hidden within the 1.2 trillion, infrastructure Bill, we talked about this, what is called, the mile drive tax pilot program. You drive a mile, you pay a fee, it is one of the good ways to collect toll for burning the fuel and this incentivizing person from making travel or you pay every time you get on the car and drive on the highway. A provision in this great as we call it, there is also a 107 billion dollars not in the 1.2 trillion infrastructure bill but in the 3.5 trillion packages what they call a great deal, the 107 billion dollars to grant amnesty to illegal immigrants. I don’t think, this is going to be stopped how the Republicans are going to deal with this is an interesting dilemma or an interesting set of events that are likely to unfold.
Warren also calls for ending corporate tax breaks to pay for the massive package. These corporate taxes have been the target for a good amount of time. They don’t recognize that you know, corporations here indirectly or directly responsible for a significant amount of the payroll taxes that they pay, which make up the bulk of the receipts, or the revenue. So you take the tax breaks there’s less incentive for expansion of plant and Machinery, or travel expansion programs or recruitment programs, which is one of the reasons why that’s a lot of jobs go overseas, because why would you want to do it and have minimum stuff. Import everything and let people pay on the services side rather than on the manufacturing and development and other kinds of activities. But this is the contradiction between Biden’s thinking versus Biden’s execution. Biden wants to bring jobs back home. He wants to incentivize. He wants electronic Vehicles, electronic vehicle checkpoints. He wants to have chip manufacturing but at the same time, one of his administration members says impose tax breaks or take away, ending the tax breaks not imposed tax breaks.
Warren also calls for funding in the bill that will help the IRS plan and Target the wealthy tax cheats. According to her wealthy tax, cheats quote, unquote. So one says, let’s plan on funding the IRS so that they have a clear and well-defined action plan to go after the wealthy tax cheats. Commemorating the success of the 1.2 trillion and what is to come 3.5 trillion great deals.
Democrats will now kick-off, a 10 state bus tour calling Build back, that is building back the America to bolster Biden’s agenda of creating jobs, lowering taxes for the middle-class, lowering Health costs for the middle class and expansion of the health care and child benefits program with the to be concluded or concluded infrastructure, plan and adjacent legislation.
Now comes the biggest transitioning to the biggest unfolding event in the United States, which is the, besides the budget which is going to spiral the debt from 22 to 28.5 by my estimates, we will finish the year around 31 trillion dollars with a further 2.5 trillion dollars to be added. This is my estimate will probably report this. We will also, report the consequences of this we have already published one budget paper and there is another paper, this is in PGurus, you see another paper getting published.
Now, getting back to the illegal immigrant issue, the illegal immigrant issue continues to scale. In the first seven months over 1.1 million illegal immigrants have crossed the border. If I give you the monthly breakdown, in each month we seem to have added one more small state of people with these illegal immigrants making their way into mainstream America. Around the same time, more than 1 million people have also been turned back. The estimated number by 2022 is in the order of 2.2 million. This is over and above 8 to 9 million illegal immigrants seeking amnesty in the United States. Mind-boggling numbers. What is worse! Biden Administration has infuriated communities since he has refused to tell Governors, Mayors, County Commissioners, School Systems and Local Police on how many have been parachuted into their own respective communities. They all land, nobody knows in which state they have landed until such time it becomes aware. I live in New York and I can tell you what I have seen in some of the adjacent communities. You come to know the next day or all of a sudden one day you walk you see this new set of people.
The Critical Race Theory and defund police moments are the other occasions and events unfolding along with this illegal immigrant surges that seem to be relentless and seamless confronting the nation. The defund Police movement is on the back of rising homicides and crimes across major US cities. We reported the Chicago incident over the weekend. The Critical Race Theory is being contested by parents in many states. The forceful implementation of Critical Race Theory. This is they have tried to usher this curriculum into the military academies and the military academies thus far have successfully stonewalled these demands across the states.
Desantis, the Florida Governor and Greg Abbott, the Texas Governor has been the barrier or have been the leader fighting the Biden mayhem. They’ve been the most vocal and responsive Governors for all these different mandates and different issues that the states face on the back of the federal policies that have been the backbone of Biden’s policies. Just the illegal immigration situation during the Trump period from 2016 to 2019 witnessed 1.75 million illegal immigrants arriving and 2.19 million leaving the population. The net impact of about 400,000. Due to border wall, tighter immigration policies, tighter enforcement and much stringent rules. Remember, ICE stands for Immigration Control and Enforcement, now doesn’t exist or does not exist in the form under which it was present.
Coming to the other item, which is our great covid and vaccinations saga. The Biden Administration’s mandatory vaccine strategy is badly flawed in the middle of a pandemic, says one of the covid experts. Why so? According to him, the virus is so deeply embedded that it is unlikely to be eradicated like smallpox or polio.
So smallpox and polio were contained. So through forced vaccination, the eradication of those two contagious diseases was contained. They say, the SARS COV-2 and its myriad mutations will continue to circulate like cold and influenza and it cannot be eradicated through a mandated vaccination program. There seems to be some truth. China is now reporting a very prolific expansion of the Delta variant across the country. The numbers is often the case, one doesn’t get to the truth from China. But this is the case that is being made out that forced vaccinations… Or in some instances, for those who have been vaccinated twice, we have seen in the United States a number of resurgence or reinfection of the covid except in dual vaccinated cases, the impact has been very less from the virus. No hospitalization and no deaths resulted from it with the vaccine providing the antibodies and mitigating the dire consequences. So there is a positive effect. But what they’re saying is that don’t assume that the vaccinations will completely eradicate. Now, this is the reason why many people have chosen not to vaccinate by looking at the content and the structure and the molecular structures of some of the vaccines and therefore vaccinating using those vaccines.
36 million total cases, 6.22 million, may I repeat 6.22 million active cases in the United States. We started at 4.7, in three weeks we have added, nothing to do with us the Daily Global Insights, we have added close to 1.5 million active cases of which 4.2 million are in the top five states. California topping with 1.87 million active cases in the state. Astonishing number.
To conclude the US section, Andrew Cuomo brings to close his sexual harassment allegation scandal. He has agreed to resign in two weeks as this investigation draws to a close and looming impeachment threatening him.
We now transition to the Indian news. Russia and Africa have shown strong support for India at the UN meat which was chaired by Prime Minister Modi. They have endorsed his five principal observations or five principal formula for preserving the Maritime Security and Maritime Movement as part of the policy discussion that took place and the debate. Obviously, Africa has a significant ocean and they are an integral part of what used to happen in the Indian Ocean. Russia is a big player in the Black Sea area as you know that there have been skirmishes with NATO. Also, Russia has big pipelines, natural gas pipelines going through. So it’s very important that Russia and Africa have endorsed the Indian approach. With India leading from the front China agrees to UNC law as part of the UN Security Council drafting and the release of the UNSC presidential statement on the Maritime Security. Remember, there was another statement released for the world to cooperate on the climate side of the business. These were the two major themes along with the other smaller themes that were discussed in the UN Security Council permanent members’ meet.
India played a constructive role in Afghanistan and such efforts are always welcome, says the Pentagon spokesman. So Indian effort in Afghanistan both of the infrastructure and the general peace is being appreciated by the US Administration. Like the US, the Indian embassy in Afghanistan seeing the resurgence of the Taliban and its march towards Kabul has urged all Indians to immediately return to India. I repeat the Indian Embassy in Afghanistan urges all Indian citizens to immediately return to India.
The other adjacent border issue that India has is with Myanmar. Since the Myanmar coup, more than 8000 Myanmar residents have crossed into India according to the Deputy Defence Minister’s statement in the parliament.
Moving to the economic side, India needs a sustained investment of 100 billion FDI or Foreign Direct Investment to accelerate its economy to 5 trillion says Mukesh Aghi of the US India group. As you all know, we have been reporting the FDI. India is somewhere between $89 to $91 billion right now. It has steadily made its way from 43 or close to $40 billion under Prime Minister Modi’s leadership when he took over in 2014 to about now, close to $90 billion. This has to be sustained because FDI provides much-needed capital and capital provides the economic multiplier. India seems to be doing well. The pandemic has most certainly put back the economy at least by two years. It was hovering around the 3.2 trillion pre-pandemic. The contraction has brought it to about 2.77 trillion probably touching close to 3 trillion, but it still has 2/3rds to be covered in the next 3-4 years to reach the 5 trillion. The FDI is a critical accelerator.
According to the finance ministry, the economic revival is seen in core sectors and that provides them with the comfort the factor that the revival will be seen and the GDP acceleration. The GDP is said to be for FY21, the GDP is expected to be 10% and FY22, it is expected to be 7.3% growth.
Continuing to build its vaccine availability, the Bharat biotech gets approval for building the Covaxin plant in Gujarat. So India continues to expand its vaccination programs and that seems to have had a positive impact in terms of the supply of vaccines. So, India today is around 520 million vaccinated doses of which more than 400 million in single-dose. India has also done well in terms of its daily increase in active cases. I haven’t checked the numbers but the last number that I saw was less than 400,000. So they’ve been making the way down and but there is a looming threat of Delta variant.
India is actively reviewing the need for a covid-19 booster dose. According to Dr Paul, everybody is looking to see whether booster doses are required, and India is no exception given its vast population and the quick and easy ability of the contagion to spread.
With that, we wrap up Indian News. Getting to markets, Dow rises to a record high after Senate passes the 1.2 trillion infrastructure bill. As we look at the markets. Dow climb 162 points making its way to 35,264. S&P climbed a modest 4.4 and finishing at 4,436 NASDAQ at 14,788. The oil prices continue to hover around the 70, less than $70. Crude at $68 and Brent at $70 79. The 10-year bond markets made a modest jump up by another three basis points moving from 1.32 yesterday to 1.35 and the Japanese 10-year in the Bund 10-year remaining modestly low or with no progress. Bitcoin and Ethereum saw small dips. Bitcoin lost $565. It is still at 45,605. Etherium at 3154. So that’s a market summary.
The other important news here is that crypto has climbed. Crypto’s profits surged and the stock is now trading around $269, which again augurs well and there’s no doubt that that’s one of the reasons why the Coinbase profit surged and Coinbase is now trading around $269 as a result of the cryptocurrency trading. It is one of the reasons why Janet targeted this. And there’s a $28 billion tax provisioned in the infrastructure bill.
With that, we wrap up today’s news.
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