#EP72 Impeachment update. Tech stocks fall. Germany, Mexico concerned on SM overreach

#DailyGlobalInsights #EP72 Impeachment update. Tech stocks fall. Germany, Mexico concerned on SM overreach

Sree Iyer: Hello and welcome to be PGurus Channel. This is episode number 72, Jan 12th  2021. I am with Sridhar Chityalaji. Sridharji, namaskar and welcome to PGurus channel.

Sridhar Chityala: Namaskar and good morning, sir.

Sree Iyer: So, this impeachment proceedings are moving forward and I think again it is moving along partisan lines. Sridharji, can you quickly give us an update on where all things stand? How the Republicans are looking at it? What about the Senate and is section 25 option now closed?

Sridhar Chityala: Great, the section 25 amendment was attempted yesterday, in the house. It was universally declined by the House Republicans, so did not go anywhere, without that getting passage. They would not be able to table it to the Mike Pence who’s the Vice President to summon Trump team and passed a resolution and ask President to resign or leave or throw him out and terminate and vice president to take over, that didn’t go anywhere. So, that was quickly terminated and I think House leader recognized that it’s a no-show. So, they went on immediately went on to the next phase, which is the articles of impeachment. The articles of impeachment have been framed and they are terming this incitement of violence against the sitting government or the Capitol as well as the elected President, almost they call it has, you know, an active imminent threat to the government. So, therefore the articles are framed along those lines, one has to see the articles, to see what exactly is the content and how it has been framed. They expect there was 195 that moved to about 202, still the numbers are not there, some absentees and members on leave because of covid and so on. It’s quite conceivable that they will make up the numbers. I have a feeling notwithstanding the fact that there was some rumble, it will very much be partisan, it’s likely otherwise the House will not take it up. It’s likely that they will get the votes, all it requires is a simple majority so they will pass the impeachment motion and send it to the Senate.

And we all discussed it. The transition point for that is around 19-20th and so, you will see the House impeaching potentially, Ok, not yet done. Things can happen and Kevin McCarthy who is the House leader has been adamantly against, he recognizes that Nancy probably is well down the Path. But, advocating President-elect Biden, look this is you know, please advise your party members to shy away from this and then focus and say let’s all come together and let’s take this country forward and let our focus be around the immediate priorities that confront us rather than the first day is being consummated by the debate around what happened in the previous impeachment. So this could kind off again, very similar go along the partisan line. So I think that this Kevin McCarthy, obviously some of these Senators who we know Josh and Lindsay and Ted Cruz and so on they are all not in favour, but Mitch McConnell knows that 19-20th is the transition point, you know, he may allow or he may differ everything to the 20th. And then, it raises an interesting point, which is ok, 20th he leaves office at 1:00 p.m. So, what’s going to happen? Are you going to impeach a non-sitting member? Opening up a constitutional problem, so which is precedence, now, you can call when Republicans have made some Republicans have the majority in the House and the Senate.  They can say, hey, you know you guys impeached, so we had to impeach someone else, who is sitting and who did this, this and this. So, therefore we can call him. So, I think we are in a slippery slope on that constitutionally, but the left media, as well as the House, feel, they can impeach him in 20 days, which I don’t know whether that is going to be feasible because you get establish this, we discussed this, rules and so on and so forth.

Sree Iyer: We must tell that in history thus far, no US president has been impeached and prosecuted. So, this is all a moot point. So, I don’t know what the point that the Democrats are trying to make because now if you notice even people like Senator Josh Hawley are being witch-hunted down and somebody can have an opinion and you don’t go over and start witch-hunting them. And you’re seeing that a lot of companies are now saying that pausing funding, they should pause funding to both parties in my opinion. I don’t think the Democrats have covered themselves in any glory here either. So, we don’t know, who were the perpetrators of the riots? Who did it? Was it planned? It appears to be planned for you know, that viral effect of you know, having that visceral feeling, where people were shown climbing the Capitol wall, there were steps for God sake, I mean, why do you have to climb? It’s just to the theatrics nothing else anyway, so this is just my opinion.

Let’s move on sir, the next point here is that the tech companies, they were taken a beating yesterday. And now the world leaders are beginning to weigh in on what these tech companies are up to. In fact, some countries are even mulling legislation to curbing them, isn’t it?

Sridhar Chityala: It is, it’s the fallout to the technology companies is reverberating across the various global country capitals. Angela Merkel was the first leader to come out and say this is very disturbing that a sitting President can be banned from the channels. Ok, and if I say this it’s whether it is coincidental or sequential or whatever you may want to call, somebody who is very senior in the Democratic party, he says ok, this person should be banned and then a few hours later the ban kind of comes in. May not have been linearly connected but making such statements is not very helpful and it only kind of reinforces what already these tech companies have been doing. So, Angela started then the Russian opposition leader said this looks like Russia and we covered that yesterday. But, today it has from EU Manfred Weber, Claude Brune 7.58.. then, the French Finance Minister, Bruno Le Maire, then you have also believe it or not 8.30 left-wing leader from Norway ____8.10, you know, all of them have stepped in and stated it is doesn’t look very good. And you know the Australian Treasurer Josh Frydenberg went on to basically say you know, what did he say? He said, you know I will quote wall care 8.30, which is to say, I may not like what you say, but I will fight for the right for you to see it. Ok, that just probably sums up which is to say this is a democracy, this is not Hugo Chavez or Fidel Castro, you know Maduro 8.47 regimes we are talking about, that’s exactly what these Tech Companies are demonstrating. I think that’s one part of it, they didn’t stop there. They’ve been starting to put some conditional restrictions or ban on Ted Cruz, Rand Paul, Josh Hawley. They started to do all these kinds of things under the situation potential. I don’t think these guys were inflammatory in any way. So, what are these rules and then the lady who from Twitter, the lady who you know form the framework of the rules, which resulted in the Ban of President Trump is being paraded as a great Soldier. Yes, there’s no other word, which is to say, hey, a very famous personality who is responsible for banning. I would be very reluctant, I would be very very concerned if I am taking such a step. So find that this is the type of partisanship that you are witnessing, which you probably you know, in a corporate world all decisions are made and everything is done in a manner which is within the principles of the corporate rather than great advocacy to be made out of it. So, all this has sent shivers and you can see the platform which stated, what the leaders have stated is this.

Now, the corporates are saying, can we therefore now rely on infrastructure from these guys and let us say I’ve given political donations to a party. So are they going to cut me off because I gave her full article donations to one party versus the other party. So, could that be the next step that is coming because by virtue of the power and by virtue of what I do with them, so we already saw this backlash in the advertising. People forget about four months ago when some specific positions were taken around this BLM and Antifa type of movements and when some of these social channels were, I won’t use the word sympathetic but less harsh, you found that brands did not want to be associated, so many of them started to kind of walk out. So, I don’t know whether you remember, we discussed this which is to say there’s Wall Street, Main Street, then there is Tech Street. Wall Street is regulated, Main Street is regulated, Tech Street is unknown kind of entity that is making its presence felt framing its own rules and acting according to the rules. And 230 gives them immunity from any kind of liabilities that arise. So, therefore, you frame the rules, you allow them to dictate then you put conditions by which you can’t make them accountable, then you have a problem. So, it’ll be interesting to see in that context Parler CEO, The Parler that was brought down, the Parlor CEO, he’s going to file a litigation against Amazon, what comes out of it, really sets the framework as to what is going to happen on the legal side of the business.

Sree Iyer: And to act too that all the Tech companies lost at least 5-6%, the salient one being Twitter, Twitter could lose up to 10% of its profits in the stock is off 6%. And I think there will be a cascading effect in the next few days. I’m wondering if they are going to be shareholder lawsuits because this is self-inflicted damage. They could have temporarily banned Trump like the way they do with many people, they could have done many other things but they didn’t do. And now, people like Nancy Pelosi is being perceived as being going for the jugular, I don’t know if this whole exercise of re-impeaching Trump. What is it trying to get? Is there some other play that they are trying to thwart? That is the question that keeps coming up. Sir Gap, which is another platform, is gaining about 10,000 users every hour I heard. So, there is a migration going on serious migration and that many of them may not come back. Because once the ecosystem gets set up somewhere else, you know, there is no need for them to come back to Twitter or to Facebook, so, there is some long-term damage. Facebook’s stock has been doing well, but I’m not so sanguine about Twitter’s Prospect. Just take Twitter as a company; do you think this is like the high point for them or it’s only going to be downhill from here on? What are your thoughts?

Sridhar Chityala: Well, the most disrupted amongst these companies, Twitter is not a part of ___ 14.02. So, let’s be fairly clear, so, most disrupted is Twitter. Ok, the migration is happening to alternate platforms. Suddenly people have noticed telegram which has silently made it move has between 300 to 400 million users on the platform. And I know that some of the entire Republican and Trump team have been migrating to different platforms including telegram. You can see very rapidly, how many members have moved? This is why I talked about the greatest migrations that are taking place almost unexplained in the background, their market cap is about I think 3.2 or 3.4 billion dollars, if my numbers are correct.

What they have done is they have basically built their own infrastructure, they recognize that they are not going to be reliant on the same boys of Microsoft, Amazon and Google because who provide the cloud infrastructure services, so they recognized in the third head of the game and made the statement, which is to say we knew something like this is coming because we are Russians, so, we have built our own global infrastructure around the world. So, they’re their own cloud infrastructure, probably setting a precedent that we’re not reliant on these boys. Remember Amazon and Microsoft one of the big revenue drivers at least, let’s leave Amazon of the retail side, is their Cloud platform, Cloud Services, that’s one of the big revenue drivers of these two companies. And what did Amazon do? They put a blockade on Parler. So, if I have allegiance as a small business or somebody, Am I next in the game in terms of you may scan everything and you see my political patronage and would you be doing something similar to me? So, this is the question that is kind of coming up, that is the reason why you have the migration.

With respect to Twitter, I think Twitter is at a high point as Twitter’s relationship with everybody and anybody has been very contentious unless you happen to be left.  If you are a left-wing that there’s no problem, you survive very well. But, if you’re in the middle or right and you do anything tangential, you get into problems with Twitter. And everybody knows that Twitter acts whimsical, blocks people takes people, blocks people, takes people, you know, this particular issue. Real James, James Woods, who I follow and who follow me on the Twitter, he says that today I wake up and I find 60,000 people have been taken off my followers. Then, I wake up next day 85,000 people have been taken off my followers. What is the basis and how they have taken? No idea. So, basically, you sign an opt-in consent to the terms references of their agreement, which gives them the ubiquitous right to act.

Sree Iyer: Sir, let’s take a quick look at Global news, Trump Administration is going to designate Cuba as a sponsor of Terror. What is the background to that sir?

Sridhar Chityala: The background to that is basically, the people are finding that the same principles that were there, is continuing. So, they have identified three nations Iran, North Korea and Cuba. So, there is a very significant Cuban population in Miami and they expected for more opening after Obama’s compassionate passage for Cuba to be integrated, they seem to be following the same, human rights violations and voices of dissent being suppressed, very similar to China. China you have the Hong Kong situation, so they’ve got that one, that’s the first one on the global scenario. The second one on the global scenario is that it’s a very bold move on Taiwan, you know, they have been arming Taiwan. The second thing is on Taiwan and they basically said, you know, they’re going to void the restrictions on all the Diplomat. So, therefore there are no restrictions with China had originally and people tried to comply. So, therefore now there is a free moment to talk and have established diplomatic contacts with everybody in Taiwan. There’s another major policy decision that that came into effect. Tibet 18.51 is another one that came into effect in especially in the last kind of  48 to 72 hours. So, those are the two major, the other one is, the trade, which is a big item with China. So, Lighthizer has spoken, who was the trade representative and advisor to President Trump with Wilbur Ross being the Commerce Secretary basically saying, please keep your pedal on, don’t let it slip, keep the pedal on the tariffs and sanctions. So, I think that’s the situation and the two major

Corporations Goldman Sachs and BlackRock who have not complied with restrictions imposed on Hong Kong quickly came up and basically said, you know, they will comply with the Trump rules. So, these are the things from the US Point of view as an extension to Cuba.

Sree Iyer: And looks like China is going to allow the WHO inspectors to visit the covid facilities in Wuhan and so on, after all.

Sridhar Chityala:  Yes, this is almost close to the first year of the anniversary of the first sighting or the first official sighting of the covid virus. Nobody knows the cause and the cure, we are still working our way and the investigation is likely to have to after one year. I’m not sure about Wuhan, they are allowing entry into China, but whether they’ve been finally given the permission to go to Wuhan is not clear, but it’s possible that Wuhan is also open. Having said, that China itself has shut down six provinces, which seems to be having high growth rates in the covid virus.

Sree Iyer: looks like the European Unity or European Union wants to have a Tech alliance with Biden especially vis-à-vis the 5G ban imposed on Huawei. So, EU again beginning to navigate towards Biden and so you have these Pan European policies that we’ve always talked about that the Democrats like to do. So, there is a slight shift in stance there, I don’t know if you did not want to deal with Trump. I think it is just a matter of timing. What are your thoughts on that?

Sridhar Chityala: No, it’s not timing, I think that. You see President-elect is certified is now Biden is going to be sworn in as the President. So, therefore, what is EU saying is look we had a policy agreement with Trump, which is this is you know, France and Germany joined a bit late, but France and Britain- UK led the efforts to have an alternative to Huawei and became part of the Consortium actually this thing started if you go back in time, we have reported this, this 5G alternative started in as a part of the quad efforts between Japan, United States and India and most recently again we reported in the show that when India ran out of some equipment which is reliant on war with Japan stepped in and gave them the software in the equipment. So, therefore, this is a continuation of the policy whether you know, Biden will call it as a quad or indo-pacific remains to be seen whether he keeps quad. So, EU is saying Biden is coming. Hey, we want to continue that cooperation towards building, because 5G is very critical, you know for us, so we can kind of leave that in the lurch and do something of our own so we want to partner with you.

Sree Iyer: Looks like India showed Goodwill in returning the captured PLA Soldier, we talked about this earlier. We touched upon this yesterday that India needs to find out why that Soldier was in Indian Territory in the first place. Do we have any incrimination that India got the intelligence information from them that person before they sent him back?

Sridhar Chityala: No, sir. I don’t think. I think I am sure they would have wetted him and if it was, you know, they would not be getting information in 24-48 hours. So probably quickly got to the resolution and you know that there was nothing, there has been as you know that there have been regular incursions of the people not just as security or spying. The sying cases the guys who came in and they came right into India. They have been arrested. Two instances have reported already. So, therefore, this probably a guy who is exerting his kind of muscle or exerting or lost or whatever the reasons may be which is beyond the purview. So the story is that you know, it has been returned. I think that’s a Goodwill gesture. India is smart enough to know what it needs to do and what it doesn’t need to do. So, I think that’s my kind of observation on that.

Sree Iyer: Coal, Coal is the next big driver for India to reach a 5 trillion dollar economy. We know that Modi has put his might behind renewable energy, especially solar and wind energy. Where is Coal fitting into all these things in your opinion?

Sridhar Chityala: I think that the one of them if you saw his austerity or stimulus package number two, and they further the what you call as the mines that were under the control of the government has the last tranche of the mining as part of the reforms is going to be auctioned and privatized, right? So, therefore what they’re saying is that you know, look we have built a pillar called Mobile, built a pillar called infrastructure. We are building a pillar which is established which is Services,  the Pharma and medical is another pillar that is being built. So the question therefore coal is becoming another one. you know, they can export, there’s demand still for steel around the world so they can export it. There are actually one of deal that was done was to reignite President Trump. This is a deal with President Trump. I don’t remember the exact number somewhere close to 700 million dollars worth of trade deal was done, where the United States will be in importing coal from India, especially the Rustbelt, to ignite the Rust Belt. So they’re saying that there’s an opportunity especially around. So in terms of your alternate energy, that is the domestic kind of consumption, So, India is now today the largest producer of solar energy, right, so they’re the largest producer of the solar energy so with so much abundance in mines and the as a commodity which is needed, well, for example, you saw the Australian coal being stranded because of the political fissures between China and Australia of the coast, so there is a demand for coal around the world and India is saying we have plenty of mines and we are giving it to privatize it and harnessing from it and that could be another pillar.

Sree Iyer:  Quick look at the markets, especially about the value of the Bitcoin, now yesterday it had a big fall. Do you see this thing continue to fall?  It’s now at 34 thousand and odd per Bitcoin. What do you see is it is like the big guys once they leave, this platform is going to go back to its 3000 levels.

Sridhar Chityala: There are bulls in the market. They expect Bitcoin to be $100,000 by end of the year. Okay, it has become a Good currency for you to hedge your bets and make some money. So and the regulators say well, you know, you want to list it in the exchange and trade and make it transparent rather than hide your money. Then we are going to allow it for you to trade on an exchange. So they’ve been regulating and you know the United States has got two exchanges at least two exchanges where you can actually trade on it. So it is fairly official that this is now a tradable and trading commodity. The guidation in the market is a demand and Supply game and the market is driven by the demand and supply, as the demand goes up when the supply is less because you remember you have to also mine this, you know Bitcoins, right? So you are constrained by mining as well. There’s a big scandal that came from Japan so you have to mine so this is a demand and supply and if more Capital comes in, the prices go up. So it seems to be an alternate tradeable entity and that’s what you’re seeing is what we discussed again a couple of days ago. The guidations are driven by liquidity as well as the demand and of course the big institutional Capital coming in.

Sree Iyer: With that, we bring a to our today’s hangout, will be back again tomorrow, same time, same place with Sridhar Chityalaji. Sridharji Namaskar and see you tomorrow.

Sridhar Chityala: Namaskar and Have a wonderful day everybody


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