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Sree Iyer: Namaskar, Hello and welcome to episode number 107 of Daily Global Insights. Today is the 26th of February. I am joined by Sridhar Chityalaji. Sridharji, namaskar and welcome to the PGurus channel.
Sridhar Chityala: Namaskar, good morning to everybody and we are on a wonderful Friday, as we close out the week.
Sree Iyer: Yes, indeed and the main points in today’s bulletin, China applied covid-19 anal swab test to the US Diplomats who are arriving in the Chinese territory, this happened on the 24th and 25th of February. And the state department has issued a clarification that these were done in error. The GOP congressmen are urging the United States to boycott the 2022 Winter Olympics Games in Beijing. India-Pakistan military’s agreed to stop cross-border fighting in a rare joint statement. The UK to move alert level down as hospitalizations fall. The US Stocks fall sharply as an outsized bond yield spooked investors. Sridharji, let’s take a quick look at the first line item some of the US diplomats were arriving in China and instead of taking their saliva or some other form of test. The Chinese immigration authorities insisted that they take the anal swab test. Is that what happened, Sir?
Sridhar Chityala: Well, the truth is that the anal tests are applied to these diplomats, which the Diplomat subsequently objected to and complain to the state department. The state department obviously took up the matter with the foreign affairs in China and they agreed that this was an error on their part, to which they genuinely apologized. And they said that these tests were far more effective relative to saliva or nasal tests, but, the US diplomats and the state department ever agreed. But, this is a big news item within the context of this is the way you know, they say it is a good American slang for this but, which you won’t say here. So this is what they did.
Sree Iyer: So, in other news five Oregon counties vote on leaving the state and would like to merge with greater Idaho state which is the neighbouring state. The initiative to move swats of largely rural Eastern and Southern Idaho into Idaho qualified for May 18 special election ballots. The counties are Baker, Grant, Lake, Malheur and Sherman. Sridharji, what do you make of this? Do you think that some of the Oregonians are not happy about the laws being passed in their state?
Sridhar Chityala: I think that there are three things the first and foremost the laws, the second is the law and order that is prevalent in Oregon and I think the third is the voice of dissent is never heard. It is dismissive. So it’s a cultural and political kind of disassociation that the rural population of these five counties, you know find themselves in. Within the state, there’s an opportunity to collect enough signatures, and they have collected the signatures and it qualifies for the ballot. And then they are aligning themselves with the rural. It becomes the part of greater Idaho these five rural counties.
Now, what it is? This is kind of setting probably the trend which we have seen in some of the battleground states, which we have seen in some of the red states that there is the laws and that is being passed in House and Senate. Most notably House led laws and the rate at which these are getting passed without, you know, the representatives talking to the specific constituencies is causing a great alarm to some of the red States and what you see is this. But, the flip side is the Democrats would argue, look, we have been talking about these are our kind of core principles. We have been speaking about this. We have political Capital. We have the mandates. We are moving forward. So, that’s where we are.
Sree Iyer: So, we’ll have to wait and see how this plays out and if these Counties become part of Idaho then, in that case, we will balance the structure of the number of electoral delegates that will be coming out of Idaho and Oregon would get adjusted and if so how we’ll have to wait and see. But, certainly, this is a message to the political parties of the United States.
Moving on to confirmations former, Michigan Governor is confirmed by the Senate as Energy Secretary, the controversial Xavier Becerra the health Secretary nominee declined to name any abortion restrictions that he would support. Biden’s straight pick Katherine Tai describes the China regime as both partner and rival. So, these are three of the people who are going through the nomination process spoken together. How do you see the whole process working? Is this par for the course for other presidents or is there more or are there more head bits this time around?
Sridhar Chityala: I think that the critical positions have already, you know one after the other, they have got confirmed, you know the state is confirmed, State Securities confirmed, Treasury secretary is confirmed. The defence secretary is confirmed, the homeland security is confirmed, Intelligence is confirmed. Interior is the one way we having some difficulties, but, will be confirmed, then, the OMB is the one which has got a stalemate. I think the HHS Department of home and health secretary is Mr. Xavier Becerra, this could be a tough ride because he’s very controversial especially around this very diversified or very divisive issue around abortions. Both Republicans and Democrats are on opposite sides of the fence in terms of pro-life versus pro-choice. So, therefore I think this would be you know, some challenges in this but as you can see quite a few of these things are kind of getting through fairly quickly. Another person who is very influential and is Katherine Tai, you can see from the name that there is proximity and she has served in China as well if I’m correct. And she’s saying China has more the partner and rival, she refused to concede, whereas, most of the others have looked at it at China as a potential threat and even competitive whereas, she has taken this type of a position remains to be seen whether this is going to be another red flag.
Sree Iyer: In other news, GOP congressmen urged the United States to boycott the 2022 Beijing Winter Olympics. Now, this comes from the Republicans. So, do you think they might be able to draw some political capital out of this for the 2022 elections, sir?
Sridhar Chityala: They certainly would. I think many of the policies that the GOP senators are taking a very strong position now. Initially, they had, they were sitting on the fence, you know, whether you are a pro-Trump supporter or anti-Trump supporter, once those issues have been put to rest. It seems like it’s been put to rest now, you can see more and more policy differences, people raising the red flag on the floor of the House and the Senate. This clearly is a problem. Yesterday or the day before, we reported that the UK says that it’s not going to boycott the Winter Olympics. China says it is going to boycott the Winter Olympics. I mean you are United States GOP; at least he’s taking a position that you would want you to boycott the Olympics.
Sree Iyer: Trump’s tax returns have been obtained by Manhattan district attorney. I mean, we all know that he had been very good with his taxes that he didn’t pay any taxes and this has been going on for several years, now. What do you think they are going to find new in this?
Sridhar Chityala: Well, they going to say here very successfully drained the system, you know, you bankrupt, buyback, a bankrupt, you restructure, buyback etc., in the process, you have earned zillions and billions of dollars and you know, you have used legal way basically not to pay so they’re going to make him an example of this is legal, but morally, this guy cannot be the president of the United States etc., And if there is some loophole which where he has violated something which is all possible in these kinds of restructuring that goes on. They will you know, they will apply the appropriate punishment. The district attorney of Manhattan is quite notorious. You can see very popular kind of cases that get prosecuted by the Manhattan district attorney. So, I think, there is no love lost between Trump and the Democratic Party leadership in New York, that’s why he has apartments in Manhattan. He has a home in Manhattan, but he lives all the time in Florida.
Sree Iyer: Well, we will wait and see how that plays out. Speaker Nancy Pelosi vows to pass the minimum wage bill how realistic is this ambition, sir?
Sridhar Chityala: They’re going to do it. She has got the votes, they’re going to do it.
Then, I don’t know 1.5 to 2 million jobs going to be out. I think that she’s basically saying I’m going to do it. See, there is nothing they are so adamant about, I can tell you this but my own inference from this is, this is not Biden because Biden historically has not taken such decision. This is Obama working behind the scenes. Though it is very hard to prove that when you see his election campaigns, which he did for Biden and if you see some of his appeals that he made and if you see some of the stuff that is going coming out of him is almost like running a third term. It’s almost like I did not finish my agenda in the first two terms of I’m running my third term. I got Joe there who was my deputy anyway in my first two terms that what you’re saying.
Sree Iyer: Leak emails confirm that the United Nations gave names of dissidents to the Chinese Communist party before they were to testify in the human rights convention that took place in Geneva. Sir, this is alarming news. Why would the UN do that?
Sridhar Chityala: Well, because UN, I mean we have stated this and you know, which people may not have agreed, you know United Nations, WHO, Human Rights Council all these organizations, you know are part and parcel of the Chinese architecture. The extent of compromise is profound, you know in the headlines just to add the adjacent part that the information they knew was deliberately WHO withheld the covid information, that emails and other things. Now, you have this issue which is people leaking the names of the dissidents before they were making their case in the Geneva Human Rights convention. That’s a very serious lapse. But can you enforce? No. Can you enforce anything on China? No. I think we have talked about this, but it’s a very sad state of affairs. If this is what global organisations are about, it raises the fundamental integrity of these organizations. The only reason they exist is because of some political posturing and many people enjoy their lives and livelihood because of these organizations, which have not achieved, in the recent past, have not achieved. I think before the show we were talking about organizations transforming themselves to the needs. We have Innovation and Disruption transforming industries and businesses. United Nations, WHO, IMF, World Bank all created post-world War II, or between World War I and World War II but mostly post World War II. Have they changed? Have they assessed themselves and changed what changes they need to bring about? The answer is no.
Sree Iyer: Sri Kajamukam “Mohan” Chelliah a Sri Lankan Canadian worked with other Smugglers to bring at least 6 Sri Lankan Nationals into the United States illegally according to the Department of Justice. He also pleaded guilty to smuggling Sri Lankans into Canada via the United States in 2019. So this human trafficking racket has been around for a while, but now we are beginning to see these cases perhaps because of the 100-day stay that the Supreme Court has provided. Is that true, sir, or there’s no relation?
Sridhar Chityala: No, I think that they are receiving wide attention because this would have been a normal course of business. This case was launched in 2019, just now with the verdict was announced, I think yesterday. Why is it being highlighted? It is being highlighted in today’s context as Biden’s rules prevail past the Scotus Moratorium. They have stayed, then this is not illegal, it’s legal because they have come in and they are settled here, life goes on whether they were for the purpose of trafficking or other types of legal operations, doesn’t matter, we welcome everybody. We are also going to give small business loans to ex-felons, so why not this?
Sree Iyer: In other news, India unveils tougher rules for social media giant such as Facebook and Twitter. There is a very detailed article about what is going to change or what the government wants social media companies to adhere to in an article on PGurus.com. Please do read that article. We will try to include that link also in this YouTube video. The most important thing there is that all these companies are required to provide the first originator of what could be deemed as a fake-tweet or fake-news item down the road. Now, viewers, you may or may not have heard of our initiative called VAAD. In fact, the next version of VAAD is going to have this feature. We’ve been working at this for close to four months. Now, we’ve already tested it out. And this is one of the most fundamental things for which we having waiting, at least I’ve been waiting before I release it to the public. So this is coincidental that what I foresaw is a definite need to combat fake news is now going to become a requirement by the Indian government. We hope that the rest of the world will also follow suit because then all these fake narratives will be stopped dead on the tracks. So wait and watch we will keep you posted on this. Is there anything you would like to add to that sir?
Sridhar Chityala: I think there’s only one little piece of information that I would add which is, the immunity measures that they enjoyed thus far is gone.
Sree Iyer: Yes, that is true. In other news, boosting India’s export competitiveness turn around at major ports fall in the last six years. So there has been a general decline in terms of India’s export competitiveness and the major for ports and I hope that the Modi government will try and take steps to turn this around. Certainly, Nitin Gadkari has been at work, trying very hard to do some things. What are your thoughts on that, sir?
Sridhar Chityala: Well, the way I am looking at this is that slightly different, which is they have reduced the turnaround time whether the Press is misquoting, I don’t know but a number of votes have been redeveloped. So the competitiveness to some extent in terms of the turnaround times they have improved in preparedness for the exports and imports because the poor development was one of the neglected areas. This is how I read it, but they are not there as yet and they’re moving the thing forward. I always go back to the data because I am not close to micro-level engagement that happens within India. But when I look at the imports-exports, it is now close trillion-dollars. It is about 450 or 460 billion dollars is the exports and around 445 or 446 is the imports. India is a net exporter by about six or seven billion dollars. That is a big number. That’s almost one-third of the Indian economy, which is around the export-import. So, therefore, they really need to get this thing in place if they need to make exports to be one trillion dollars out of the 5 trillion dollars business, which is roughly the 20% of the GDP of the country. So my reading for this is that they’ve done but they have to do a lot more in the next three-four years as they move towards, the predictions are by 2026 India will be a 5 trillion-dollars economy. The original target was before 2025 but this contraction did not help. That’s how I read it, sir.
Sree Iyer: We will give you more clarifications in the days to come. The United Kingdom has imposed new sanctions on Myanmar, we will also give you updates on that.
Let’s take a quick look at Global covid. The global cases have risen to 112.5 million with a death toll close to 2.5 million. The local cases in the area around where I live the colour i.e, the rating of the covid has been brought down by one level which means that from very critical we are down to critical and this perhaps means that there is a general belief that this is now going down. So we’ll have to wait and see how this plays out.
In other news, there is a new CCP virus strain that seems to be spreading very fast in New York City, anything to add to that Sridharji?
Sridhar Chityala: No, I think that we are the first year epicentre in the United States, so that’s all I can say. Be careful. We were the leaders first, as we kicked off the coronavirus and then we were generous enough to pass it first to Florida and then they reduced it, and now it is, California and Texas. They have a very high number of cases. But anyway, so I think that for anything, we seem to be one of the first people because of the volume and also the ethnographic mix of the population here.
Sree Iyer: And finally, on markets. Today, the markets had a down day. Sridharji, you can explain it quickly and then we can call it a wrap.
Sridhar Chityala: I think the markets witnessed what you call a big down day. We lost close to 560 points on the Dow and close to 100 points in S&P. The primary driver of this is that the markets have been reading this very very closely. It’s what we call the unusual rise in the bond yields. Today, the bond yields are close to 1.6%. Usually, we give a graph, maybe next week, we’ll put this graph up. If you see the graph, on one side you put the SMP dividend yield and then on the other side, you put the treasury bond yields. You find that these things are now going the opposite way. So there was a wide gap between the S&P yield and the treasury bond yield being lowered. So that is the gap. Today, you find that the S&P yield is coming close to about 1.55 whereas the bond yields are just crossing 1.6. That’s an indication that there could be a shift that will occur to income-generating assets. So, therefore, people make dump some of the growth stocks and shift their way to the value stocks and then you may see a part of the portfolio diversified into bonds. This is what people have been apprehensive about in terms of putting more stimulus into the hands of the people whether we are going to have excess liquidity and as a result, cause aberrations in the market.
If you recall, Jerome Powell, the FED Governor did not talk anything about the rising Bond yields, and if you recall, around the same time, we were 1.33% last year and we are now around 1.6% at this point and we had dipped to 0.64% around April on the eve of the covid epidemic taking roots in the United States. So this is something that we have to watch and this is reflected also in the oil prices. Oil prices are now around 63 dollars, which has also rapidly risen. We have tracked it from almost $25 to today. We are around $63+. Mitch McConnell made a very profound statement, the consumer savings is at an all-time high and they are stacked up which is roughly around 14-15% of the disposable income of the consumers. So why are we giving another stimulus that is targeted at the universe of the anti, rather than reducing it and focusing on very specific segments, which need this, like what you pointed out these small businesses which are less than 20 which were hampered by prior stimulus but which do need help one can give. Similarly, those people who were under the neglected segment of the society, which is the 9 million number that the Democrats point out, but they’ve also added these 12 million illegal to this, so direct the cash if you want around but don’t keep giving cash when people really don’t need cash and add to the debt of the balance sheet of the government. I think that’s the message.
Sree Iyer: Thank you very much, sir. Viewers have a great weekend. Don’t forget to subscribe to PGurus Channel and also join our membership program at PGurus Channel. We look forward to having you there. We will be giving you more bonus features and we are very excited that this program has taken off very well. We are growing fast now. And again, it’s a pleasure to have you on our Channel Sridharji and here is hoping that we’re going to have a great weekend and we will be back first thing in the morning on Monday. Namaskar.
Sridhar Chityala: Namaskar and have a wonderful weekend. When you come back, we’ll have more confirmations and much more important news on the confirmation side.
Sree Iyer: Thank you, sir.
Reference: New norms from the GOI to regulate SM and Digital News Portals, need to furnish the first originator of information
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