Sridhar Chityala: Good morning. Welcome to Daily Global Insights with Sri and Sree, Episode number 223. This is Sri and Sree. Sree will join us very soon and we’ll be back live. We always start with the global news, China requires tougher sanctions says, President Trump. It continues to bully and harass nations around. It has got away with Covid. It has got away with human rights violations, plus it skirmishes in the South China Sea. So, Biden Administration must get tougher, says the ex, trade official, who worked with Trump in his administration. The US also must demonstrate a more committed approach to ASEAN, especially Thailand and Indonesia. Say the officials in the ASEAN region. To win back respect and to win back the trust of the ASEAN Nations, it cannot be selective in its choice only focusing on Singapore, Vietnam, Philippines, but also must show its commitment to Thailand and Indonesia, of course, Taiwan has always been the focus of the United States, particularly from the Chinese incursions.
Coming to Taiwan, the security of Taiwan is critical for Australian survival says Australia Think Tank. Once Taiwan is under the control of the Chinese regime only it’s a matter of time before they take charge of Japan and make the way towards Australia in the flashpoint of one Island after the other.
As chip investment soar Singapore desires to play a catch-up game with Taiwan. As you all know that the chip is hotter than crypto. The demand has soared on account of migration taking place from China and less reliance on China. So Taiwan has been upping up the ante Japan has started manufacturing, of course, Singapore, Malaysia, which have historically been also, manufacturing centres for chip production and Singapore has to play the catch-up game. Singapore is also opening and it needs to really up the ante on its GDP as well. So this is one of the areas that they do want to focus.
Coming to Europe, European Union is reviewing new possible side effects of mRNA Covid-19 vaccines, there seems to be a common plague which is one of the reasons why many people are not vaccinating themselves and resisting the mandates that are being applied in various parts of the world. Swiss police threatened to stop enforcing Covid-19 restrictions. The reason being that there is a growing chorus in Europe, which started in France was in Germany, was in the UK and slowly spreading, and the police feel that it is not appropriate to enforce these restrictions. So, therefore, they do not want to be mandated by the government to do the enforcement.
Latvia starts pushing back migraines, at the tense Belarus border. We talked about Lithuania. We talked about Poland. Now, Latvia joins the game, and they are asking Belarus not to let its border porous and allow these people to come to Latvia as well. Belarus also tells the United States to cut its diplomatic presence after the US imposed tough sanctions on the Belarus regime.
Getting to Afghanistan, as the war intensifies and Afghanistan, former Diplomas say, Biden, must intervene swiftly to change course. Afghan Finance Minister. Mr Khaled Payenda has resigned and has left the country or leaving the country. With most of the borders and Customs under the control of the Taliban, Afghan is also facing a revenue crunch and the economy is crumbling very rapidly. Taliban on the contrary seem to be in total and complete control after the collapse of Afghan forces as the Taliban seizes control of nine provincial capitals in six days. There was a talk, if you recall, which were reported in DGI that there was a discussion, unless that there is a sit-down and a power-sharing agreement between the present Afghan government and Taliban, should Taliban choose to fight Afghan forces, may be able to hold without international support for six months. This was the basic assumption but it doesn’t look that way in the way the Taliban is seizing control.
Taliban also has seized control in its borders with Tajikistan and Uzbekistan says, the Russian officials. So what does that mean? These are typically these Northern Frontier is very strong in these regions that Tajikistan and Uzbekistan Etc. Now by controlling the Taliban is making sure that there is no dissent or there is no opposition from these Northern forces.
Moving to the United States news, the US Senate passes the framework for a 3.5 trillion dollars budget after the passage of the 1.2 trillion infrastructure, bill on Tuesday. Biden takes Victory lap, saying that his economic agenda will soon be unfurled, and this is a great deal in town. We talked about this and we have also published paper one on the infrastructure Bill and its implications and the scope of the coverage of the infrastructure bill as details become available. We will share and still, the details are sketchy. But Medicare, taxes, climate accord, child credits is a range of measures that are Embedded into this bill. Some of them would become a permanent affair along with the current Medicare and current Social Security, and other non-mandatory expenses in the US budget.
Debt expansion is not in the bill and that it is set for another day or the Democrats may decide that they will never discuss debt expansion and confront the Republicans using the Senate and the House in a tangle to lift the debt limits. The debt limits are not lifted. Emergency measures have been imposed by the US Treasury. The debt limit was 22. It has borrowed 6.5 trillion, debt limit expired on August 2nd, and there has been no extension and Mr Mitch McConnell the house Senate minority leader has said no, we’re not going to lift the debt limit setting a showdown.
The Senate votes to back the Transportation ban of covid-19 positive migrants. It is a positive development, if you recall we have been talking about this which says that the number of migrants who are illegal migrants who try to make their way through the Border, they’re not tested. They are either housed locally or they are sent into the communities, but now they will be tested for covid-19. If you happen to be positive, they will not be allowed to be Transported. So where they would be located, whether it is ever going to create temporary tents and shelters to house these people and treat them remains another big question, mark.
The Senate also votes to advance in a partisan manner, the sweeping election voting Reform Bill. Again, We have talked about this, this would Grant federal Power Over States and effectively nationalize the voting laws. This is going to be even a tougher battle probably the bigger battle, whenever this gets passed, I don’t know what procedure they would use. Certainly, it’s not going to have passed through the filibuster be it in the house or be it the Senate. I am not sure, they have the votes in the House as well.
Senator Manchin threatens to be a dissenting vote already on this election Reform Bill. He feels that this will fundamentally threaten the Constitutional structure that is prevalent in the United States. So this is another big looming battle along with the 3.5 trillion budget, which is expected to be passed through a reconciliation process, but when there’s law is drafted and officially embedded into the budget. They will be tremendous discussions there as well. So, along with this Mega budget sweeping election reforms is another agenda item that will keep us busy post-summer.
Biden Administration calls on OPEC to increase oil production. Why? We are now beginning to see gas prices rise. In some states, the gas prices are at six dollars per gallon that’s an astronomical rise since were we away.
Biden also to host world leaders at what he calls a democracy Summit; it will be held virtually on December 9th and 10th. This will be followed by an in-person meeting date and venue to be announced, most probably in the United States. It will bring together a whole range of people from heads of state to Civil Society, to philanthropists, and private sector members who typically are engaged in fighting authoritarianism, corruption human rights. Etc is an interesting agenda and meeting that he has summoned. Now, some of his own actions don’t constitute the Democratic process. How is going to assemble all these people and move the agenda forward remains an interesting point and who these invited leaders are going to be is another interesting observation and you know, much to look forward to whenever this Summit details on announced.
Top US Diplomat in New Delhi meet the Dalai Lama, this Is Us Diplomat meets Dalai Lama, Dalai Lama’s representative in Ngodup in New Delhi days after Blinken meets. Well, again, you know, Dalai Lama, discussions were much more forthright during the Trump Administration, but still, the US has picked up momentum on engaging and this will set another battle around Tibet and the Tibetan region between the United States and China.
The Texas House of Representatives voted on Tuesday to bring back the ran away, Democratic legislators to the state and the warrant of arrest, if required.
The 80-12 vote comes after the state supreme court, voided district court order blocking the law enforcement. So in other words, there was a district court that gave permission to the Democrats, the fleeing Democrats or the fled Democrats, but that has now effectively been voided by the Supreme Court.
These Democrats are now in DC. They are left in limbo and the house will exit for a break, shortly. So there is no one there, they have to eventually get back. What awaits them? The Texas State secretary has signed an arrest warrant to arrest these 52 people upon arrival.
Moving to the election saga, Colorado’s Secretary of State is investigating the county after the election system passwords were posted online. Well, this election saga is going to go on. I’m sure that there is going to be no discovery process or they will be a haphazard discovery process. Then, there is going to be a descent around this whole new election reform and voting bill and hopefully, by 2022, which is not too far, we will have some kind of consistent election process as we have crucial House and Senate elections, which will define the way the legislative agenda is going to be handled and managed in the balance of the two years of Mr Biden.
Coming to covid, dozens of events are being cancelled across the United States as covid cases continue to rise. Confrontation also looms as face mask mandates spread. Some say, yes, some say no. Some schools say they will wear it, some schools say they will not allow this to happen because the children are likely to suffer. It looks like this confrontation is now gaining momentum when the anvil of reopening of schools and colleges. At least, many corporations have mandated the wearing of masks. The New York Stock Exchange, yesterday, passed the mandate that if you want to be on the floor and trading you have to wear a mask and you also have to be vaccinated.
Booster doses are likely to be approved for immunosuppressant patients. Booster doses may soon be approved for others as well. But it looks like these booster doses are gaining momentum, particularly in the US. It looks like it’s also gaining momentum in some other parts of the world.
Active covid cases in the United States are at 6.317 million and growing on an average at 100,000+ plus a day. Yesterday, there were about 105,000 new cases. The chaos in the hospital system is fast spreading and many hospitals in quite a few states are facing a crisis. To give you the numbers, the United States’ active cases is at 6.351 million, of which California has 1.881 million. As is often the case, Florida is at 481,000. It has moved to the number two position. It was around 200 to 220. You can see they have added close to 280,000 in less than three days. Maryland, which used to occupy the second position, has 455,000. Washington state has 256,737. Texas has around 212,000. Texas, one can understand because of these border surges and people coming in. It is mind-boggling to understand what exactly is driving the cases. Possibly some of these fellows are landing in Florida which explains the number of cases there. Michigan is at 129. These top five states roughly make up more than 60% of active cases in the United States.
Moving to the Indian news, India has around 1,500 nationals in Afghanistan involved in various developmental projects. And they have brought back 50 nationals from Mazar-e-Sharif. If you can recall India has directed Indian nationals to return to India from Afghanistan given the surge. We reported that yesterday, India is one of the countries invited to the Afghan meet in Doha later this week as the crisis reaches a crescendo.
INS Kochi reaches Saudi Arabia for joint Naval exercises. As you are all aware, India conducted Naval exercises with Oman. India has an arrangement with Bahrain and India is now on its way to Saudi Arabia for exercises.
ASEAN and India should explore ways to enhance Digital connectivity, says Singapore Deputy PM. Digital India certainly stepped up its ante and moved ahead. Today, it is one of the top three digital innovation centres, digital users, High mobile adoption and penetration, and a high rate of transactions on the digital side. So it’s no surprise here that there is momentum for India and ASEAN to work together. This leadership that’s coming from Singapore Deputy PM’s I think we have covered this again at length. It is Asia, which is going to be the epicentre of economic transformation as the world shifts from the United States and Europe, and Asia picks up momentum in its share of GDP.
Digital electronic vehicles and electronic chip manufacturing are all going to be the driving force as economic transformation shifts.
Nitin Gadkari who is the master of national infrastructure programs and the MSME sector is pitching for using India’s effects results for infrastructure development. Recall, there’s an infrastructure institution that is being set up to raise capital, source capital and then deploy it for various projects that are under progress under Nitin Gadkari.
The Modi government is also on course to monetize 6 crore trillion worth of assets and it says that it is on course to privatize many of its Blue Chip public enterprises such as Air India, BPCL, BEML, NINL, and SEI and it is on track to achieve. This will help the government to augment the revenue side of the balance sheet and also reduce the cost on the other side in terms of providing the capital that is required for these undertakings.
Over 72% of financial transactions in public sector Banks are now done through digital channels, says the government. This is the transformation that we’ve been talking about. So, in the banking sector, you have digital channels and digital transactions making 72%, We talked about the e-tag program, that’s about 90%. So one can see the growing momentum in terms of digitization. This is what prompted the Singapore Deputy Prime Minister to come forward and say they should explore digital connectivity.
Like the rest of the world, most notably the United States, Indian regulators now approved studies of mixing Covishield and Covaxin. The trials are to begin in Tamilnadu shortly. Vaccine doses in India reached 525 million marks. The number of active cases was reduced to 386,351. Suddenly, India is managing its covid situation very well. It remains to be seen how they get past the Delta variant. So when we look at the total cases, the total cases in India is about 32 million. The discharged or the cured cases are about 31.22 million and the most important number is the number of people getting healed or discharged. It’s less than the number of new cases, and that number toggles between two to five thousand.
The other good news is, India has been able to contain its daily new cases to be below 40,000. It was 28,000 a couple of days ago, but it seems to have added new numbers. It’s about 38,000. Deaths are at 429,000. On vaccines, which we also talked about, India has completed about 522,597 doses of vaccines. Dose 1 is at 407,144,000 according to the Cowin app. Dose 2 is about 115,450,000. So certainly I think India is well on its way towards the number of about 800 million to get past that 70% – 80% threshold. They are vaccinating around 4.4 – 5 million on a daily basis on average. There are days when they go 6 million, there are days when they go 3.5 million as well.
So transitioning from India news to the Markets. Better than expected inflation report popped the market rally as they saw the Dow index gain 220 points. The consumer price index jumped 5.4% compared to the expectations of 5.3%. But the most important news is the core inflation. Here, in the United States, the core inflation excludes food and energy. That same format is followed in many places around the world. The core inflation rose only 0.3% in July. This prompted the markets to climb 220 points, notwithstanding the fact that there’s a daily cry from many of the economists that inflation is looming around the horizon, including Kansas Fed chair, made this observation that inflation is very much around the corner.
Now, to complete the market story, The Dow finished at 35,484 drawing 220 points. S&P finished uptick 10.97 at 4447, NASDAQ at 14,765. The most important thing is that the 10-year yields dipped very marginally to 1.332. There was again not much change in the Bund 10-year and Japanese 10-year. Energy markets saw the price marginally up as both Brent, as well as Oil, grew by about less than a dollar. The Bitcoin made modest progress of $1065. Etherium at $116. So, Bitcoin finished at $46,557 and Etherium at $3255.
So with that, we conclude this edition of DGI. We look forward to seeing you again tomorrow morning in the United States and late evening in India.
- EP 223 | Daily Global Insights | Aug 12, 2021 | Global News | US News | India News | Markets - August 12, 2021
- EP 190 | Daily Global Insights | Jun 25, 2021 | US News | India News | Global News | Markets - June 25, 2021
- EP 179: Biden says stands by Ukraine & will convey this to Putin; Oli says misunderstanding resolved - June 9, 2021