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The Week of 11/13
What the midterm results mean
Will Nelson
November 13, 2023
Week of 11/13/23
Prepared by Will Nelson for Tom Donohue
Stories that drove last week
Israeli conflict continues
Third Republican debate
Midterm election results and what they mean
Domestic News
Politics
2024 Race
Trump (56.6%) [-1.7% since last week)
Desantis (14.1%) [+0.1% since last week)
Haley (8.7%) [+1.0% since last week]
Ramaswamy (5.3%) [+0.4% since last week]
Christie (3.1%) [+0.7% since last week]
Third Debate
Trump once again skipped the debate
Key summaries
Ron DeSantis: Focused on foreign policy, abortion, and economic issues. Criticized Trump, calling him a "different guy" from 2016 and expressing frustration over Republican losses.
Nikki Haley: Strong performance on foreign policy, particularly China and Russia. Articulated an intentionally-vague stance on abortion. Clashed with Ramaswamy and criticized Trump's foreign policy.
Vivek Ramaswamy: Aggressive, positioned as an outsider in the Republican Party. Clashed with Nikki Haley and Ron DeSantis. Attacked RNC Chair Ronna McDaniel, blaming her for Republican losses.
Tim Scott: Addressed economic growth and antisemitism on college campuses. However, he was less visible compared to other candidates and missed opportunities to make a significant impact.
Chris Christie: Issue-focused, avoiding personal attacks. Emphasized strong American leadership in global affairs and domestic policy reforms. Highlighted his governance experience.
Midterm results (primarily sourced from the fantastic Isaac Saul @ Tangle)
In Virginia (2020 Biden +10)
State house flipped to Democratic control
State senate preserved Democratic majority
This appeared to be a rebuke of Governor Glenn Youngkin and the 15 week abortion ban (with exceptions) he promised to pass if Republicans took both chambers
In Ohio (2020 Trump +8)
Voters approved a constitutional amendment ensuring abortion access
Voters legalized recreational marijuana (24th state to do so)
In Kentucky (2020 Trump +26)
Incumbent Governor Beshear (D) defeated a Republican challenger that both Mitch McConnell and Donald Trump endorsed
In Pennsylvania (2020 Biden +1)
Dan McCaffery (D) was elected to the state Supreme Court (extending Democrats majority to 5-2) in a race that cost over $20 million and focused on abortion and mail in voting
Philadelphia elected its first female mayor, Cherelle Parker, who ran on a pledge to hire hundreds of cops and reinstate stop-and-frisk
In Mississippi (2020 Trump +17)
Republican Gov. Tate Reeves won re-election, fending off a surprisingly strong challenge from Democratic candidate Brandon Presley.
What we’ve learned
Abortion is a winning issue for Democrats against the current Republican position (Isaac called it a year ago)
Denial of the 2020 election results also appears to be a liability for Republican candidates
Biden may not be well liked but he is not as much of a drag on the Democrats as some expected
As was discussed at the third Republican debate, some combination of abortion, Trump, and if you’re Vivek Ramaswamy, Ronna McDaniel are to blame for the consistent underperformance of Republicans over the last few elections
Reasons for concern
Nearly all the candidates (with the exception of Ramaswamy) seemed to be supportive of direct conflict with Iran
60 Minutes ran a piece about Iran’s attempts to harm dissidents and former US officials, with John Bolton going as far as saying it was “very close to an an act of war”
Reasons for hope
Voters are prioritizing issues and candidates over party
A state Donald Trump carried by 26 points re-elected a Democrat as governor
Virginia’s popular Republican governor lost both state chambers
To directly quote Issac Saul, “It seems our country is not so totally drowned in red vs. blue national politics that voters can't narrow it down to the people and issues they care about.”
Economics
Markets
Equities
S&P 500 (+1.1% last week)
NASDAQ (+2.5% last week)
DJI (+0.6% last week)
Big Stories
Old news: SBF Guilty on all counts
The best summary of the trial I have seen (YouTube: 49 Minutes)
If you are curious to get inside his mind, an unknown crypto influencer that Sam took a liking for sat with him for hundreds on hours on his house arrest and attended his court hearings everyday. She documented everything on her YouTube, X, and Substack
New News: Credit Card Debt is at an all time high (Kobeissi Letter)
Total credit card debt in the US rises by $48 billion in Q3 to $1.08 trillion
Credit card debt is now up $400 billion since 2013 and $300 billion since 2020
Meanwhile, interest rates are credit card debt are at a fresh record of 25%.
The average consumer is now spending $1,600/month on their credit card.
Nearly 40% of US households now have more credit card debt than savings.
Global News
Conflicts
Israel
Israel continues to advance on Gaza city with it now fully encircled
It has offered daily 4 hour pauses in the fighting for civilians to flee
Ukraine
Russia
Russia is stepping up nuclear capabilities and posture amid a broader international trend of increased nuclear posture and pull backs from nuclear treaties and limits
China
Chinese foreign nationals from NY and CT have been buying homes in Maine to create marijuana grow houses
Chinese holdings of US Treasuries are at their lowest level since 2009
Other
As discussed in the “Reasons for concern” section, tension with Iran seems to be spiraling.
On Wednesday, President Biden directed U.S. military forces to conduct a self-defense strike on a facility in eastern Syria used by Iran's Islamic Revolutionary Guard Corps (IRGC) and affiliated groups
Reading List
One Man vs. McKinsey: A Billionaire Says the Consultancy has Rigged the Bankruptcy System [Paywall]
I first read about this fascinating story in John Ellis’s newsletter, and could not agree more with how his reporter Mary Walsh put it “We don’t know how it ends, but when it does, it will be news, win or lose.” I have googled the story every few months since looking for resolution but have yet to find anything. I will certainly re-share the story if a verdict is reached.
Summary
Jay Alix challenged McKinsey & Company's entry into bankruptcy advising, suspecting conflicts of interest and insufficient disclosures
He alleges McKinsey concealed investments in and relationships with bankrupt companies and their creditors
McKinsey denies wrongdoing, attributing Alix's actions to a personal vendetta
Legal battles are ongoing, with Alix invoking a RICO suit in 2018. McKinsey’s efforts to have the suit thrown out were rebuked this summer.
The Justice Department supported some of Alix's claims, resulting in a $15 million settlement by McKinsey
A podcast I cannot recommend enough has another incredible episode
David Senra is a voracious reader of biographies and autobiographies of the great founders and builders from history. He has built a vast array of knowledge that he is able to draw from to form connections and trends that connect the greats.
This episode is about Michael Bloomberg. I cannot do this podcast generally, or this episode justice with a summary. Listen to it if you can.
Has Bridgewater’s mystic “system” just been Ray Dalio’s gut this whole time?
The "system" at Bridgewater, while partially automated and rule-based, appears to be and have been heavily reliant on Ray Dalio's personal judgment. Despite claims of a sophisticated investment engine, evidence suggests that Dalio's decisions, based on his intuition or analysis, were central to the fund’s trading strategies. Well… It worked until I didn’t.
On a lighter note: Ottawa paid over $650k for consultants’ advice on cutting consulting costs
And finally: An email Steve Jobs sent himself a year before his passing that is a valuable lesson in humility and gratitude.
