Sree Iyer: Hello and welcome to PGurus Channel, I am your host Sree Iyer. Due to technical difficulties, my video feed is not working, however, we have our guest Sridhar Chityalaji and that is working fine. This is episode number 80 is the 21st of January 2021, and I’m sorry it is the 22nd of January 2021.Sridharji, namaskar and welcome to PGurus Channel.
Sridhar Chityala: Namaskar and good morning to everybody.
Sree Iyer: So, let’s jump right in the Biden administration has been on a tear, they’re trying to do a lot of things yesterday. They pass 10th executive orders all related to Covid. So, what is the new urgency as far as Covid is concerned, sir?
Sridhar Chityala: Well, I think the Covid is one of the highest topics on the agenda and Biden and Trump had bitter kind of disagreements and this formed the basis of the whole political debate in the presidential elections. The view of the world as well in the United States is that President Trump should have done a better job. So, people are asking what exactly is your plan? You promised us to respond to the pandemic as well as the imminent crisis. So, what exactly Mr. Biden is your plan? So, he has laid out a plan which is, he passed into the executive order which is mandating the several of them, mandating the masks actually accelerating the manufacturing of the PPE gear using the Defence Act. All international visitors coming in should pass and have a clearance Covid clearance test passed before that they won’t be allowed. Then, he also is using various facilities around the country for testing and also the vaccination program.
Amazon came and promised to offer it’s wear house facilities to Mr. Biden to be used for vaccination and also, looking at the supply and one of the issues that have cropped up in the United States is the supply of vaccines, so, that that is the other element. I think this mask is going to be one of the big themes which are the enforcement is very stringent in terms and who all and which areas the mask should be worn like the government buildings government officials etc., so, that forms the basis of this executive orders passed by him.
Sree Iyer: Now there is a new National Covid strategy and that requires overseas travellers to test negative before they come in, that is something that is in place in many countries today isn’t it?
Sridhar Chityala: Yes, that has been in place in many countries. I think most stringent of them if I recall is Singapore and Japan and I think we have the concept of green lanes and you know preferred kind of, which destinations are Exempted. What kind of criteria you can just increase land there, there has to be some kind of Visa sponsorship which mandates as to why this travel is essential. Of course, if you are a resident or if you’re meeting a family member that also needs to be established. So, I think the countries have had each of the countries which have maintained very tight control over the covid seems to have additional measures. The United States was fair, we had these within the United States, we had these restrictions if you recall across the states, and there were restrictions, you can’t move from one state to the other state. Firstly, there was a ban can’t go from New York to California or New York to Texas, Texas to New York. You had strict bans, how strict they were from an enforcement point of view. I can’t comment because I have not travelled, not many people have travelled either. So, I think it looks like now we are coming up with much more stringent measures to see whether that helps the process.
Sree Iyer: Biden department of interior has caused oil and gas leasing and permitting on federal lands. This is again going to the Keystone policy with the GOP is also condemned. I just wanted to put that thing out there that the policy of green, green, green is really in the front and centre like we are predicted. So, there is one other thing Biden is starting to roll back many of the Trump deregulation rollbacks, do you think that this is actually a good thing? I mean if every incoming president undoes, what the previous person did, wouldn’t it be like the US is just treading water.
Sridhar Chityala: Well, I’ll regulation second. I’ll respond to the earlier. There has been a very stringent and strong response United response from the Republicans on this Paris Accord, Keystone Pipeline as well as this what you call a moratorium on the leasing. They have they are not taken that very lightly. So, now they have insisted that any kind of deal that is signed the specific components of the deal should be tabled to the Senate and consent should be obtained before he signs the deal. Remember that the President can sign executive orders, but he can’t allocate Capital at his Whimsical discretion, it has to come to the Senate, so, therefore they’re putting a precondition. So, they’re putting checks and balances to make sure I think there’s going to be a battle on the hands of the Keystone Pipeline. They may have a moratorium on the oil fields that is the second field which we discussed yesterday. So they make kind of getaway a little bit with it. But, as far as the Keystone Pipeline is concerned, I think there’s a battle on the hand, Paris Accord is a battle on the hand.
With regard to the second question, which is deregulation, President Trump had rolled back a number of regulations because they found it to be redundant and there was a very strong plea from the department of Banking, Insurance and representatives that the cost of this compliance far outweighs any benefits that come from it. The cost now that is being estimated to, actually go back and if you follow the old norms, then, the numbers that are mentioned is, anything from 50 billion dollars to 500 million dollars. The reason why these big numbers come up is the two elements of cost, one is the cost of compliance for a very reporting point of view, which is all the record-keeping and all the stuff that goes on in the people. The second is internally within the bank, they have to make a lot of systemic changes to accommodate and internal processes that they have to put in place. I can understand I come from the banking industry. I worked in three of the largest financial institutions in the world. And I have gone through the 2008 GFCI, I was part of the compliance process complying to the norms that were enforced. There were a financial crisis and people kind of felt that whether there were enough checks and balances at that point of time and so, therefore, which resulted in the mortgage exercises and eventual collapse of the market. So, you had a situation where which required the clean-up and usually you put in this regulatory compliance to deal with the problem. And once the problem dissipates you roll back, you don’t kind of continue the same thing again and again and again. So, the story is that why they are doing it because miss Warren feels that Bank should be held accountable both Gensler as well as Chopra or the big architects of the compliance regime. So, therefore they are back at making sure that that is in place.
Now to your last part of the question, which is, are we a banana republic? Well, we look like that, because every four years, unless the President has eight years, you go forward, you go backward, you go forward, you go backwards, you do that, no, I’ll push it back. So, you know, the Keystone Pipeline is a classic example, the Paris Accord is a classic example. WHO is a classic example, it’s been established that not being in WHO has not helped or hindered in one way. The United States became the first country to produce and certified the vaccines, you have access to data, that’s fine. But, why do you hide tie yourself to 11, 12,14 billion dollars? It’s a banana republic in terms of going, it is the same with Paris Accord. Yes, you know, we are compliant to the EPA norms. Why do you need to kind of be a jamboree? So all this, so-called the central institutions and the regulations are all part of it different mind-set which is the government knows it all and the government is the central body to regulate control, manage anything and everything that you do.
Sree Iyer: Christopher Wray is retained by Biden as the FBI director, so, there is some continuity there, that is a good thing. Now, the House has passed waiver legislation to confirm Lloyd Austin as defence secretary. What was the waiver and was it really needed?
Sridhar Chityala: He is raised, so, if he is within, there is a term that is they have to pass a waiver. So, if it is not been in service and there is a seven-year period and within the seven-year period, after seven years is not eligible within the seven-year period if he has to be taken back and nominated as a Defence secretary then, one has to get a waiver to say okay, we have no objection and we believe that he can perform his duties etc, etc. So, I think that was the waiver that was obtained from the house. It looks like almost the Senate has approved him to be the defence secretary.
Sree Iyer: Now, the Biden Administration took several big steps, but in the wrong direction, why do you say so?
Sridhar Chityala: I say so because Mitch McConnell also says so and I also say so, because the reason is that, let’s take immigration, you have a wall that’s going to stop wall. You have a wall, they want to make the borders open and allow people to kind of come in with more or less stringent rules. So, which poses a security risk to the country because any of us and all of us, we go through a very stringent process, that’s number one. Number two, they want to formalize, the illegal immigrants here to a two-tier process of Three-Year, Five-Year and eight-year harmonization while there’s not enough data and if you begin to harmonize every illegal immigrant, what is the deterrent for more illegal immigrants to come in? So, that’s my first objection to the immigration side of the bill. The energy side of the bill, we just discussed the Paris Accord as well as the Keystone as well as the Alaskan reserve which we discussed yesterday. So I don’t agree with the position that the Biden administration, they always say scientific data, but, they don’t understand, there is scientific and economic data. So, it’s not just like scientific data alone. The example that I use is vaccines address the pandemic but, it creates a lot of collateral consequences right, we are not saying, we focus on collateral consequences, so, therefore we should not be given the vaccine. This Keystone Pipeline got very much resembles that. There is potential consequences, which is what the science says, so, therefore I’m going to kill the jobs and I’m going to kill the baron, so that’s why I object on the immigration.
Then, the healthcare now, they want to go back to the Supreme Court, the modifications that Trump did, they want to get it back expanded, expand the scope of it. Obamacare has been a disaster whatever people may say, we live in the United States the cost of medical insurance that has you know, 2008 to 2020 has skyrocketed. So, therefore there is nothing which justifies. The said, there would be a broad spectrum of people joining the healthcare, the especially youngsters, there is no data, which says that there have been more participants, there are networks, there’s a price reduction theory all formed the basis of the Obama care thesis, so, that’s the healthcare side of the business.
The regulation we have already discussed on the regulation side, and I think the last that I would say is I’m not a proponent of the central institutions and as well as the joining Paris Accord. So this is the reason why that we have gone forward and we are going backwards and Mitch McConnell is saying I mean, this is just not acceptable by way of all these executive orders that the President has passed.
Sree Iyer: So the stimulus bill of 1.9 trillion that is coming under some heavy discussion in the Senate.
Sridhar Chityala: Yes, I think we discussed it and a PGurus gracious enough to put up the line item of expenses to be incurred. We also put up the line item of expenses that are being allocated in the 900 billion dollar stimulus to correct. So, we found that there is this 350 +117+ 50 + 20 about you know, 590 million dollars. The 350 billion is local and state governments, 150 billion dollars is the further expansion of the schools and the school networks. 50 dollars is for Universal testing across the United States. 20 billion dollars is to further help the vaccination into the state governments, to me these 70 billion dollars here, If I’m running a budget I’m at the 70 billion dollars. I’m asking the question. I’ve already given so much of money in stimulus 1 and stimulus 2, what the hell is these 70 billion dollars, that just does not add up, right and similarly these 350 billion dollars, which was the sore point in that 900 million dollars delay. They keep bringing back because several of the local and state governments, which are actually in the hands of the Democrats, they’re bankrupt. So, I think that that is where the principal is not on. We are now at 28 trillion dollars of total debt and by adding these 2 trillion dollars, we are going into 30 trillion dollars debt. So, I think the Republicans are saying this, everybody agrees the $400 insurance, we don’t have a slide, but these are things that we have given before so you can go back and look at our data that we have given before. The 400 dollars unemployment insurance everybody accepts, the incremental $1,400 to $600 check everybody accepts. Those two things everybody except, small business everybody accepts, but in the other areas, I think these 350 billion dollars is a big problem.
Sree Iyer: And the US politics President Trump has hired South Carolina-based Butch Bowers to represent him in the Senate impeachment hearings, but I’m also reading that the House has not yet sent the Trump impeachment articles to the Senate. What is the latest on that sir?
Sridhar Chityala: So the latest on that is that they are waiting for a specific timetable. I think the timetable is almost ready. They expect to table and get approval and present the motion to President Trump by January 28th. They expect to give him a week or so to do to respond or rebut. Then, that in turn goes to the House, there’s another week there, then the house response with their rebuttal of the response, then, they set up the trial proceedings and the case begins. So whether this is going to be quick whether this is going to be fast sir, we don’t know but it’s very clear that there’s only one article of Impeachment that is President Trump incited the riots which resulted in, it’s almost like a state of war against the government, that is the allegation of the impeachment.
Sree Iyer: John Radcliffe has stepped down as the Director of National Intelligence. Now, if I remember correctly, this was a new division that was put together by Trump. Do you think the whole division is going to be disbanded? What are your thoughts, sir?
Sridhar Chityala: I think they will have it. They’ll continue, they’ll appoint somebody into this national intelligence unit. They will use it. So I think that there’s a nominee and whether it comes in the Department of Homeland Security or whether it will operate independently remains to be seen. Jack Sullivan is the nominee for the National Department of Homeland Security. So it remains to be seen I think they would probably keep it.
Sree Iyer: The Parlor has now become a target. Parler’s request to a judge to act against Amazon from bringing down their website has been refused. I’m hearing that now parlor has moved all their code to some Russian servers. Parler is a US company, and now you are driving US companies into the arms of Russia. I’m trying to see what is really the middle ground here. What are your thoughts?
Sridhar Chityala: I thought Mr Biden and Hunter Biden have a very close relationship with Russia, sir. So, therefore, they’re probably giving more business to their partners. Setting aside, not being flippant here, there are three specific instances of Tech being overbearing and Government interference and Parler is caught in that web. Parler is under attack and Parler filed a case that it was unfair and unethical on the part Amazon to discontinue the AWS, that the court decided against Parler. So they failed. The second one that the federal house oversight committee now wants to conduct an objective and independent investigation on Parler to say whether they were also part of the setup which caused the riots. In fact, were they abettors? In the incitement of the right that’s quite amazing because all they did is give access to the platform. And so suddenly they find themselves that they may be, not yet, but given the kind of the spiteful attitude with which the house is proceeding which is to say you either toe my line or I’ll call you and punish you. So when I look at it, logically, if this is the circumstance, would you like to be under US jurisdiction of law or you would like to be under some other country where at least there is some hope of objectivity? So that probably pushes.
So where is Telegram? Telegram is based out of Russia. They have a huge infrastructure. They have an infrastructure which is independent of Amazon, independent of Microsoft, independent of Google, three of the largest providers of cloud infrastructure besides IBM. So they will be say come to our country, run the show, we allow you to have access to your target audience in the US. So I’m not surprised in a context that they’re going somewhere where their business is not going to be under threat. So that’s my answer to that.
But since you asked Parler, there are two other things that have happened. Last night on YouTube, the White House video called the Biden Channel, there’re a lot of people who put dislikes of the stuff. But soon people found all those dislikes were being taken out, removed and YouTube has issued a public statement. They found that to be either, inappropriate sources, or not relevant kind of content. They deleted all of those. So the story is, is YouTube toeing the line of the government? Or there was some invisible hand which is saying, ‘This President is great. So, therefore, you can’t have the dislike comments. That has not gone down.
Well, even worse. On Twitter, they put the Israeli ambassador to the US as Israeli ambassador to Israel, Gaza, and the West Bank. It was featured and he was interviewed at least in Fox and he was absolutely flabbergasted that something like this can happen. And when he is the US ambassador of Israel in United States, New York, so then subsequently they deleted in. There seems to be, for this Tech platforms, there are three specific examples around that which basically shows that there is tolerance for certain behaviour, there is intolerance for certain other behaviour. So we are entering a new era in the United States as far as the interference is concerned. I think there is a very specific article that is researched and published ‘The Integration of Media, Government and Tech platforms’, how they’re playing a role in crafting the new model.
Sree Iyer: Well viewers those of you who are watching who happened to be Venture capitalists, of course, Sridharji is always looking for new ideas. Here is a new idea. This is going to be the wave of the future. Build your own cloud companies that can stand on their own, can reach you without the help of these Cloud providers like Amazon, Microsoft, Google, who can have the server in their offices and these servers can connect up to satellites. Hopefully. Mr Elon Musk will deliver that very soon. Thereby, you don’t need internet hosting providers. You don’t need the cable circuit delivery providers like Comcast and AT&T. Nothing against them, it’s just that these people are getting too much power and they are abusing that powers. Here are new start-up ideas. Hopefully, some of you are listening to this and you can make a lot of money if you can crack this thing. These are not that hard. These problems have been cracked before. The content delivery network was the last frontier. There are companies like Akamai who had figured it out. So anyway, I’m just rambling here. But here is a new startup idea. Let’s go on to the next one, sir.
Mitch McConnell threatens to delay governance rules unless or until Democrats preserve to keep the filibuster rules, especially against some of the Controversial policies pursued by Biden namely energy, immigration and climate. Now filibuster has always been there isn’t it? Why do the Democrats want to get rid of it? After all, in two years they could be in the minority and the shoe could be on the other foot.
Sridhar Chityala: Their firm belief is if you recall what they call as progressive agenda and the personal handwritten note of Mr Obama, an e-mailed seeking donations for the Georgia state runoffs, he explicitly expressed, we got to win the Senate 2 races, otherwise having a house and presidency will be inadequate. Senate will become an impediment to the progressive agenda. This is quote-unquote. My words may be a little bit jumbled-up by virtue of not having that letter in front of me, but the broad content is along those lines. So this is very much about, from 2008 to 2016 he only had House and Senate for the first two years after that he lost Senate especially after the disastrous Obamacare rollout. None of the Republicans supported and they bulldozed its way. So he and the Democratic party feel much of their agenda will be stonewalled in the Senate if you have the filibuster rule.
So the story is what they’re saying is, we now control the Senate we have a 50/50 and the tiebreaker is from the vice president. So we don’t want and we want to preserve the status. So Democrats and Republicans play this game on both sides quite comfortably depending on what their political agenda is. It’s just not Democrats, its Republicans too.
Now, as an extension to that, this morning breaking news is Democrats, Republicans have made a very strong push to Mitch McConnell that the filibuster rule must be preserved. Equally, Democrats have told Mr Schumer that do not yield or compromise and proceed otherwise ever agenda will be impacted. So you’re going to see a double whammy. Executive orders being passed left, right, and Center every day, which is very bad governance, and then you’re going to have ideas and new regulations and legislations being steamrolled between House and Senate until such time both those things flip which could in the 2022 elections, which could then become a disaster for this President? So I think sometimes one has to be pragmatic in making sure that the rules and the regulations are consistent in compliant to the growth of the nation not for the development of a party. So policy and politics, when it interferes, when you use rules to steamroll the politics, then definitely the consequences of the outcome from the policy is going to be disastrous for people.
Sree Iyer: Global news. We heard about what the Israeli Ambassador said and the retraction by Twitter. Israel has also made a very strong statement saying that there is nothing to discuss with Biden if the Iran deal is renewed. I thought that Trump had left some checks and balances in place that would more or less preserve what has been done vis-a-vis Iran till now. What are your thoughts?
Sridhar Chityala: As far as Iran is concerned, he has put a lot of conditions through executive orders, which mitigates Iran to go back and do the enrichment of uranium. That’s what he has put. Then as a counter to that, he has enacted policies, which is the West Asian peace agreement. So for them to unite together, especially Qatar outside, for them to unite together and act as a single holistic force Israel investigation, Israel can be considered as part of West Asia against a common threat, which is Iran.
Now, how is Biden trying to overcome that? Biden is trying to overcome that by saying there was an earlier Accord signed by the world, only the United States declined. But earlier there was an Iran nuclear agreement where eve UN was involved. So they want to go back and start negotiating from that agreement. But how do you go back and negotiate from that, is an interesting proposition because they are already past the 20% threshold in terms of the enrichment of fuel as well as IAEA has now stated that they do have some nuclear weapons. The cause for concern is also in conjunction with ISIS being found located within Iran.
Sree Iyer: Team Biden has a firm commitment to defend the Senkaku islands in a call when Japan. China and North Korea also featured in the discussion. Is this positive direction as far as the Quad i is concerned? What are your thoughts?
Sridhar Chityala: I want to be very cautious because the news changes from one day to the other day. Today, the Indo-Pacific world has come thanks to very good few of us who have worked on this before which is to make sure that Suga becomes the front end. In fact, Abe would have been outstanding but Suga is doing a great job. Sugar has a relationship with Kurt Campbell. He also has a relationship with Biden. He also has a relationship with Antony Blinken. If Antony is confirmed as the incoming State Secretary. So here’s a pretty good relationship, so they had an extensive discussion. So the Indo-Pacific Accord, Indo-Pacific is back on the agenda. Senkaku is going to be defended from China at any cost, so that has been agreed to and supported by the new Administration. The most important thing is they’ve brought for the first time the word Quad. Quad never featured in the Biden’s policy discussions right through pre-elections, and there was a question mark what’s going to happen to the Quad. So Quad has featured and they said they’re going to enhance the Quad. But one day before, in our own program, we covered that they want to see how they broaden the security apparatus from Pacific to the Indian Ocean whether they should break it into two tiers. But yesterday that discussions revolted back to Quad and extension of Quad And also Kurt Campbell seems to have committed that no longer we will be passive. That’s what resulted in the trans-pacific comprehensive partnership, the trans-pacific agreement being reversed. He said we will be very active partners and we will attend all Summits and will attend all policy-making stuff. and we will try to enhance the security of Quad. It remains to be seen tomorrow whether the statement still holds. Until tomorrow, until next week comes we just have to wait. The reason why I say that is Lloyd Austin’s Senate nomination or the hearings of his nomination featured Pakistan. That re-establishment of ties with Pakistan and Pakistan being one of the key players and it should not be neglected, it should be brought to the table. When you bring Pakistan as part of the discussion. What happens to the Indian Ocean begs the question?
So, therefore, that’s why I’m very cautious to say where exactly we’re going to head. We don’t know we’ll wait till tomorrow.
Sree Iyer: EU refuses to require China to stop using slave labour before signing a deal. So essentially EU is saying, it’s okay whatever you are doing in Xinjiang is okay. Is that what is the message? EU is conveying? Of course, the EU is toothless but still.
Sridhar Chityala: I think so. I think it’s like Apple, will turn a blind eye. You just give us the equipment at x price, we will take it because profits are good for us. By the way, we will also leave some Capital behind. So I think the UK and France are the leaders, and beacons, if what is left of Europe or EU it is going to be salvaged then France and I’m glad and delighted than Britain unbundles in itself from this mess called EU and has its own identity and I think it’s going to do well. So it’s probably the only country in the world where they have used a domestic judicial system to say, give us an opinion whether there is a violation of Rights and even is so then we will add it as an amendment to make sure that any country which is doing business, make sure that it meets this condition. We don’t have this even in the United States. The UK probably is the only country in the world which has gone forward with that. So your point is very very correct, which is the EU is going backwards.
Sree Iyer: And look at Global markets. Markets at tepid because people are waiting to see which way the stimulus discussions are going to proceed. Clearly the 1.9 trillion, I think the Republicans are not going to take it. However, let’s just see play it out. So the Republicans oppose it and the Democrats are for it. Would the democrats need a 60 Senate votes to pass this thing regardless of what the Republicans think? Do you think they will be able to get 10 Republican Senators to vote along?
Sridhar Chityala: I think that this is going to be a very interesting battle because it’s unknown. The reason why I say it’s unknown is, the Republican party is divided. There are two specific camps. one camp is those which are truly conservative which are Trump-aligned, one which is conservative but still conservative. The other one is if you put them in one camp because the decisions will be similar, then you put them in another camp which says we just need to support some of the good ideas. There’s actually probably few of such Republicans and I don’t want to mention the names. So I would say that given 2022 is also an election year. Because this is going to be one of the first things that are likely to happen alongside impeachment and alongside this Keystone and other accounts that are being put in front and conditions being laid out. So when you look at these three things going on simultaneously, in fact, the press secretary for Biden made a comment, well they can multitask, one doesn’t have to be dependent on the other, well they can definitely multitask but the emotions and passions run High when you run these three things. So to answer your question. I very much doubt that they can have all of this $1.9 trillion being cleared. The markets, therefore, reacting to that, they are at 260 points when I last looked at the Futures is showing. Dow is down 260 points as we speak.
Sree Iyer: And one note of caution from us, we don’t tell you to buy a stock or a trend. We are just reporting the market numbers. These are numbers that are available if you go to any ticker on CNBC or other channels, you’ll be able to see them. All we are saying is that this is the trend and this is why we think that trend is happening. This is again, our thought process. Don’t rely on this alone to make your marketing or buying decisions. Sridharji, I needed to put out there because we are a news analysis Channel. We look and give comments based on what we are seeing. We do have a wealth of experience at least you do and thank you very much once again for sharing your thoughts, sir. We are going to be back again next week and we will be looking at all these issues and more, as things seem to happen more during the weekend and during the weekdays these days. So, it’s a new normal these days. So viewers, please subscribe to our Channel and please donate to our cause and we will figure out our technical deficiencies as quickly as possible. Thank you very much. Namaskar.
Sridhar Chityala: Namaskar and have a wonderful weekend and we look forward to seeing you on Monday.