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Cake day: June 13th, 2023

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  • Florida stayed quite red, the only good news was the the Republican off-year gerrymander of their district map did not win them any seats. The margins were tight but it was the only state the GOP really performed well in. Alabama nothing really changed, the red seats stayed red and the few blue seats stayed blue.

    There were some really surprising results in other states though. Texas went from all Republican-held state legislature, governor, Lt. governor and supreme court to Democrats winning or claiming majorities in all those positions. It’s hard to describe how massive this is, because the Republicans have been suppressing metropolitan voters in that state for 30 years, which means that Texas might be a swing state in 2028.

    Another one-off result is in Tennessee, which mostly went well for Republicans, but House District 04 in that state is currently too close to call with the Democratic candidate ahead by (currently) 280 votes. Trump won this district two years ago with +24%.

    It’s hard to describe how much an an historic wave tonight has been. I’ve not seen a midterm this one-sided since '94, when the GOP flipped 54 seats during Clinton’s administration.







  • The main issue is that increasingly AI companies are making up a big portion of index funds which are required by law to be purchased by mutual fund managers and thus part of retirement accounts, so value will be evaporated out of retirees accounts. The larger the bubble the more the impact.
    Also note that the only reason the US is not in recession right now is due to AI market “growth” so the GDP correction that follows will cause companies who have invested in the technology (not just AI companies, but most of the Fortune 500) to contract. The fallout will be unpredictable, but the most likely scenario is layoffs. Further, the Fed will be reluctant to cut interest rates, because inflation is extremely high due to tariffs, so the one lever the government has to stave off the recession has been compromised by the current administration. So the recession will be deeper and worse with a longer recovery than it would otherwise have.

    So why care? Because grandma’s retirement will disappear, a bunch of people will be laid off and the levers available to mitigate the impact have already been pulled. Oh and inflation will get worse when our government bails out AI tech bros to the tune of $1T.