The Matterboard is our weekly assessment of what’s worth your attention and what isn’t. Here’s last week’s edition, here’s an overview of the project, and here’s the full archive.
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PAY ATTENTION ⚠️
The blue tsunami crests higher. Democrats this week won the Mississippi Senate race, which is frankly unbelievable. The betting market odds of that happening in early October were a scant 8% and we would have put them lower than that. Democrat Mary Peltola seems likely to win the Alaska Senate race as well, which would give Democrats 56 Senate seats next year. In late October the median forecast was 52 Democratic Senate seats. Everything broke the Democrats’ way in the late stages of the midterms, and then some. There’s talk of Democrats abolishing the Senate filibuster so they can more easily pass partisan legislation, but it’s also possible Democrats could win more seats in 2028 and hold a filibuster-proof 60 Senate seats, or more. In the House, meanwhile, the Democratic majority is likely to be around 260-175. That’s huge. You could argue that President Donald Trump did more to boost the Democratic Party than Democrats ever could have done on their own.
The Iran war is finally heading in an agreeable direction. Iran remains combative, but President Trump is making it increasingly clear that he doesn’t want more bombing and is willing to sustain a blockade of Iranian ports indefinitely. After months of bungling, this FINALLY seems like a sensible strategy. Oil is getting out, energy prices are coming down, and time is not on Iran’s side. It still would have been better if Trump had never started the war, but a protracted, messy ending would be better than no ending at all.
[Stocks will do fine under Democrats]
Ukraine is once again attacking Russia’s energy infrastructure, as global energy prices fall and pressure from Trump to lay off Russian energy subsides. Trump envoys Steve Witkoff and Jared Kushner keep meeting with Russians to negotiate a “peace deal,” but we think they just smoke cigars and drink expensive brandy. While campaigning in 2024, Trump famously said he’d end the Russia-Ukraine war in 24 hours. He later amended that to 100 days, then six months. It’s now been 22 months and Trump has not resolved a single thing.
Inflation is still here, according to official reports. That’s not news to anybody. We don’t know the annual inflation rate because there was no baseline data a year ago, due to a needless government shutdown. But unofficial estimates put the inflation rate at about 4%. When Trump took office it was 3%. And he promised to get prices down, not up. More failed promises.
MIGHT GET SPICY 🤔
The Nvidia CEO scandal came out of nowhere, but markets seem to be digesting the departure of co-founder Jensen Huang after reports of at least three affairs, including one with a Chinese spy and another with a subordinate. Some people consider Huang the godfather of artificial intelligence due to his company’s outsized role in both building the products that power AI and financing many of the companies developing it. We published a short guide to the Nvidia scandal that summarizes what could happen next. The stock market has stayed steady amid the Nvidia turmoil, indicating that the AI boom isn’t unraveling (yet).
The Chinese spying caper that triggered the Nvidia scandal is in some ways a bigger matter than the upheaval at Nvidia. The Chinese spy who trapped Huang, Alice Huang (no relation), ran a Singaporean company that may have been buying billions of dollars of Nvidia processors to transship them into China, which would violate US government export rules. US officials including Commerce Secretary Howard Lutnick, Attorney General Todd Blanche, Secretary of State Marco Rubio, and FBI Director Kash Patel appear to have done nothing. There will be congressional hearings and who knows what else might emerge. For now, Lutnick is emerging as the fall guy. But there could be others. One scandal often begets another, especially when conflicts of interest abound, as they do in the Trump administration.
