Hello,

Here are the five things you need to know today:

• CHINA. SINGAPORE. A honeytrap scandal has implications beyond Nvidia.

• ISRAEL. IRAN. The clock ticks for Netanyahu, Hegseth, and Tehran.

• UNITED STATES. Trump turns the White House on goblin mode.

• POLAND. A deadly shooting risks deepening a political divide.

• NEW ZEALAND. A swing against the Nationals may keep it in power.

Modelled on the Presidential Daily Brief, Geopolitical Dispatch gives you the intelligence you need in the time you have. Subscribe to read all five analyses.

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CHINA. SINGAPORE. Invidious

A honeytrap scandal has implications beyond Nvidia.

Nvidia shares fell in pre-market trading after CEO Jensen Huang admitted to an affair with a businesswoman alleged to be a Chinese spy. Nvidia said its board had opened a full investigation. Donald Trump called Huang “a fine person”.

INTELLIGENCE. Alice Huang (no relation) was an executive at Megaspeed, a Singapore buyer of $4.8 billion worth of Nvidia chips. Claims that Megaspeed was a front for Chinese firms to skirt AI export controls have forced Nvidia to probe sales. Claims that it’s a front for Chinese intelligence could force Nvidia to sack Silicon Valley’s most important person. On the eve of a summit with Xi Jinping, it’s a dilemma Trump, and the US share market, will want to avoid.

FOR BUSINESS. Chinese media has dismissed the allegations, saying they’re designed to smear ties before Trump meets Xi (and Vladimir Putin) at next week’s APEC summit in Shenzhen. Yet with a new Congress and a growing AI backlash, Trump and Nvidia can’t just tough it out. If the doyen of artificial intelligence has fallen for the oldest trick in human intelligence, or HUMINT, then the affair could become more than a cautionary tale of corporate espionage.

ISRAEL. IRAN. Eisen the prize

The clock ticks for Netanyahu, Hegseth, and Tehran.

Gadi Eisenkot was tasked with forming Israel’s next government. More members of Congress said they’d impeach Pete Hegseth. Trump said it was “highly unlikely” he’d attack Iran if talks progressed. Marco Rubio said talks had so far failed.

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Hello from Sydney,

Today, rather than the usual Week Signals essay, we are sharing with all our readers a transcript of one of the monthly roundtable discussions we held yesterday.

You will find below a wide-ranging conversation covering our interpretation of the rather heady geopolitical developments of the past month, including:

• the US midterm election results and what they mean for American domestic politics and foreign policy;

• the geopolitics of the Middle East in view of Israel’s inconclusive elections, fighting between the Houthis and Saudi Arabia, and the latest developments in the Iran war;

• Lula’s victory in Brazil’s presidential election, Canada bringing realpolitik back into its national security and foreign policy, Rubio’s eyes on Cuba, and what all that portends for the Western Hemisphere and the future of the “Donroe Doctrine”;

• widening protest movements across the Old Continent and the challenges facing European governments and societies that are, in many places, short of cash and long on political polarisation and deadlock; and

• Indonesia at a crossroads.

Hope you enjoy.

Damien

Transcript: 6 November Roundtable Discussion

Damien Bruckard: Good morning from both of us on the east coast of Australia. Welcome to a conversation about some pretty tumultuous events in geopolitics over not just the last month, but really the last week, with serious consequences that Michael and I will explore in the first half hour together, then open up for questions. So Michael, welcome.

Michael Feller: Great to be here, as always, on this auspicious day.

Damien Bruckard: Yes, and there have been lots of auspicious days over the last couple of years since we’ve been doing this, but this week feels particularly big.

Just by way of an agenda, what we’ll be covering is, surprise, surprise, the US midterms, what that means for the United States itself, its foreign policy, and therefore the rest of the world. After that, we will do a deep dive on Iran, in light of both the midterms and other events in the region, including the Israeli elections and escalations between the Houthis and the Saudis. We’ll take a look at the Brazilian elections as well, and European protests, most obviously in France, but also in other parts of the world, and how these figure as part of broader Gen Z disaffection. And then we’ll take a look at Indonesia.

So let’s start with the midterms, Michael. A Democratic blue wave, winning both the House and the Senate, in line with polling and your own predictions and Polymarket and most expert commentary, but probably a little bit more comprehensive than some people were expecting. What’s your read on the implications of this for US domestic politics and policy? And then we’ll turn to the foreign policy dimensions.

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US midterms and the Trump presidency

Michael Feller: So you’re right, a wave in the House and the Senate. Perhaps what people weren’t expecting was the down-ballot wave that happened as well. And by that I mean flipping governors’ races and so forth. Whilst everyone’s focused on James Talarico winning the Senate seat in Texas, to me just as consequential was the Democratic governor now elected in Texas.

I think that explains most of today’s market crash, or the one that’s just happened overnight in the United States. It’s the sense that a blue Democratic state is not going to be as welcoming to data centres, to companies like Tesla and SpaceX. And really, where do these hyperscalers now go? Where do these data centres go?

It’s now fairly obvious that most Americans hate the pace of the data centre build-out. That’s inviting overdue questions about not only the political sustainability of this business model, but what these data centres are for, whether we even need them all, whether these companies will ever turn a profit, and whether any of it really makes financial sense. That’s the first domestic implication, at least in the very short term.

The second thing people aren’t really thinking about yet is what happens when states like Mississippi and South Carolina flip. A first reaction might be, jeez, this is great for the Democrats. But now they’ve got a real problem on their hands, because how do they keep these states?

There’s a phenomenon in politics that once you’ve got something, you want to hold on to it, even if it’s only going to be there for a short time. I’m reminded of Boris Johnson’s victory and the so-called red wall seats that he picked up in northern England, traditional Labour working-class seats. He spent the next couple of years upending his policies and contorting himself to keep those seats, which were never really Tory seats.

I wonder if the Democrats are going to contort themselves to keep what are essentially protest votes. At the end of the day, if it wasn’t for Donald Trump and the chaos in how the Republicans have governed in the last two years, they would still be red states. It’s not that everyone’s decided to get behind DEI.

Damien Bruckard: The median voter hasn’t shifted left.

Michael Feller: No, that’s right. In one sense, this will be a moderating influence in terms of whom the Democrats select as their presidential nominee, or at least who gets through the primaries. I suspect people like Jon Ossoff, who’s from the South and is pretty moderate by all accounts, will do well. But the AOC / El-Sayed wing of the Democratic Party probably won’t be able to get their candidate up yet.

They’re going to be increasingly angry as people like Jeffries, who’s the presumed Speaker of the House, and Schumer, who’s the presumed President of the Senate, try to satisfy Texas and South Carolina. The risk for the Democrats is how to do that without really pissing off the progressives.

And as much as everyone’s focused on the RINOs in the Republican Party, I wouldn’t be surprised if in a month or two we’re talking about the DINOs within the Democratic Party, because they’re very divided. The dog’s caught the car. What does it do with the car?

Damien Bruckard: Well, one thing the dogs will probably do is start some investigations. There are a whole range that could be launched in Congress, whether into the war in Iran and Pete Hegseth’s role in particular, or into graft, including the Trump family and its associates.

Those associates aren’t just players on the sidelines. In some cases, they’re the lead negotiators on the most important files in foreign policy. Witkoff and Kushner have been involved in negotiations with Russia and Ukraine, as well as talks over Iran and the Middle East more broadly. I imagine there will be investigations beyond that too. My overall sense is that the knives will be out, and this will be a big domestic preoccupation for Trump and Washington more generally.

In that context, one question I wanted to put to you is this: ordinarily, when a second-term president loses the midterms, which is a very common experience, probably the default, we talk about the president becoming a lame duck. That ordinarily means they can’t pass legislation, so they focus their efforts on foreign policy.

But Trump is exceptional in almost every sense. He hasn’t really been prosecuting his domestic agenda through legislation. It’s largely been through executive decree, and he’s already had a pretty big focus on foreign policy. So what’s your interpretation of Trump as a lame duck?

Michael Feller: On impeachments and investigations, I expect those to happen. They might not seek to impeach the president directly, although if they don’t, the progressives are going to get really narky with the moderates in the Democratic Party. But at least it’s going to put a lot of heat on him.

That in turn could spur him to be even more dramatic on the foreign policy file, whether to flood the zone and distract, or because he’s feeling humiliated, angry and vengeful, as is the theory around Iran at the moment. It could open a real Pandora’s box.

It’s hard to think that the Democrats can ignore what appears to be, prima facie, corruption. Not to mention the things that might not be related to Trump himself but are pretty fishy, such as the fact that his lead negotiators on Iran and Russia are also morally flexible businessmen who like to do deals with interesting characters on a good day. There will be developments not driven by the president that nonetheless appear in a situation like this. When the cat’s away, the mice will play.

When you’ve got an eventual lame duck, it can create a moment when rogue regimes around the world do rogue things: someone launching a coup d’état, invading a neighbour, or otherwise acting against what was once considered the international rules-based order. I know we’ll get to Indonesia later, but I’m unofficially putting that on coup watch. There are a few other countries I’ve got on coup watch too.

In terms of countries invading their neighbours, I’m not suggesting China is about to invade Taiwan. But I expect we could see more misadventure in the South China Sea, more aggressive envelope-pushing against the Philippines, which is undergoing its own domestic dramas. There you’ve got essentially a lame-duck president with the additional complication that he’s at war with his vice president. Although that could happen here soon, judging by JD Vance’s extraordinary tweet the other day.

There’s all sorts of scope for misadventure, and we haven’t even talked about Iran. The Iranians will be gaming out scenarios for how Trump may react.

The Democrats can moderate foreign policy insofar as they control the purse, but that only matters in the longer term. Trump’s still got scope to shuffle money around within the Pentagon, which has already been happening to fund the war in Iran. He doesn’t really need to apply to Congress, at least in the short term.

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Israel, Iran and the Red Sea

Damien Bruckard: And it doesn’t work the other way. He’s also got a veto over what Congress may put forward on foreign policy, as it does occasionally, and can push that back.

So let’s focus on the Middle East. Obviously, the dynamics in the United States are changing. The other big development is the election in Israel, which seems likely to lead to a minority government of some sort. It’s unclear whether Netanyahu will be appointed prime minister by the president, or whether Eisenkot might end up leading what would probably be a pretty unusual coalition, including the Arab parties that did much better than they have in previous elections.

Given the uncertainty over both the time frame for appointing a government and the potentially unusual coalitions that could form, what’s your base case? Who ends up as prime minister, what will that domestic political configuration look like, and will it lead to any changes in Israel’s approach to the region?

Just by way of background, the alternative prime minister is hardly a dove. Eisenkot is extremely hawkish, prosecuted the war in Gaza in large part as a military leader, advocated some of its harshest treatment, and seems quite aligned with Netanyahu on Iran.

So there’s the US, there’s Israel, and the other development is the uptick of violence in Yemen itself, as well as quite successful Houthi attacks in Saudi Arabia, including against prime real estate such as Riyadh Airport. That’s fundamentally attacking the business model of that particular Gulf state.

You could draw a longer bow and include the escalation of tensions between Ethiopia and Eritrea on the other side of the Red Sea. It all seems a pretty potent combination, more uncertain than in the past. In that context, what’s your view?

Michael Feller: I’ll start with Israel. My base case is Netanyahu getting back into power because I think his coalition is less likely to fracture and join Eisenkot’s than Eisenkot’s coalition is to fracture and join his.

There are already members of the opposition bloc who have essentially said, we support Eisenkot as prime minister, but we are never going to govern in coalition with the Arab parties. So will they support Netanyahu if Eisenkot can’t get there? Whilst in theory Eisenkot can create a majority with the Arab parties, that would mean losing at least one of the major parties in his bloc, presumably to Netanyahu. Then it’s checkmate in Netanyahu’s favour.

Eisenkot is a very storied military commander, but he’s not a politician. I think Netanyahu, from a skills perspective, is going to be better. He thrives on this sort of thing, if you look at his political career.

Damien Bruckard: Skills, yes, he’s undoubtedly a skilled politician.

Michael Feller: He’s been written off so many times, but he’s able to do the dirty work of favours and coalition-building that a straight shooter like a military commander probably isn’t. Don’t rule Eisenkot out, but I’d put my money on Netanyahu.

Either way, as you say, both are hawkish, so the foreign policy approach isn’t likely to change much. Although if Eisenkot got into power, there’s a face-saving reason to change policy on Iran. That’s a war they can’t win without essentially going to a nuclear phase. I don’t know how you conventionally defeat Iran any other way, unless you want hundreds of thousands of US troops in Iran.

Damien Bruckard: Well, Iran seems to have got regime change in Washington without having to do that.

Michael Feller: Exactly. So good luck getting Congress to approve another trillion dollars for that sort of campaign. The writing’s on the wall for that strategy.

Assuming Netanyahu gets in, I think things will continue as they have. We’ll probably see escalation within the next two months. I’m talking about conventional escalation, not a tactical nuclear weapon: attacks on Kharg Island and other facilities, reciprocal strikes on more Gulf airports and oil facilities, and oil prices going back up. Interestingly, on a day when the market crashed, oil was up again as markets digested these sorts of scenarios. Not great news.

I think the Iranians, as we’ve said before, are incentivised to hold on until 2028 or 2029, when Trump’s successor takes office: a repeat of the Jimmy Carter-to-Ronald Reagan hostage crisis situation. Iran already has a war economy. They can handle isolation and hyperinflation better than—

Damien Bruckard: Handled it for 40 years.

Michael Feller: That’s right, better than just about anyone.

The Houthis and the Saudis are a different kettle of fish. I see the Houthis as aligned with Iran rather than as a proxy. If they got diplomatic recognition from the Saudis and/or this apparent request for $51 billion, which I think was reported in The Wall Street Journal overnight, they might stop their campaign. That would let a lot more oil through the Red Sea and probably take some pressure off other conflicts in the region.

You mentioned Eritrea and Ethiopia. That seems to have fizzled out for now, although things are picking up on the other side of Ethiopia, along the border with Somalia, where the same proxy dynamics are playing out: Egypt versus Ethiopia, Saudi Arabia versus the UAE.

You’ve also got the breakaway territory of Somaliland, which only Israel recognises as an independent state, although de facto Ethiopia and the UAE also recognise it. That could still keep the Red Sea region potentially dangerous, but not as dangerous as it’s been with the Houthi conflict.

Brazilian elections

Damien Bruckard: A bit of a hard pivot to South America, and Brazil in particular. With the elections there, there’s probably a temptation to see a global trend away from an authoritarian, Trump-like right towards more moderate or leftist policies. I’ve seen people drawing connections between what’s been going on in Europe, the US midterms, some of the resistance to Netanyahu, and now Brazil, where Lula has done much better than most polls and analysts expected.

What’s your read on the particularities of Brazil? Can a broader trend be inferred, or is this really about Brazil’s circumstances?

Michael Feller: I’d be hesitant to draw a broader conclusion from Brazil because Bolsonaro came first in the first round. I think a couple of things happened. Lula, or at least his machine, was able to get more voters out for the second round. And Bolsonaro was just a really crap candidate. He’s a crap guy. He fled to Florida straight after. They probably dodged a bullet there.

I don’t think Lula was an amazing president either. He’s also really corrupt, don’t forget. Brazil perennially punches below its weight. It should be doing a lot better, and crime is bad. Bolsonaro should have lost the election. Lula is also 81 years old. Not that I’m ageist, but Bolsonaro Junior? The idiots running that guy.

If a broader trend can be inferred, it’s that people hate crony, kleptocratic, nepotistic dynastic systems. And a memo to those in MAGA who think one of Trump’s sons would make a great future Republican president: Americans didn’t even like the idea of Hillary Clinton being president.

I don’t think it was a left-right thing. People chose the lesser evil, the lesser form of corruption in electing Lula. Maybe there was a bit of anti-MAGA sentiment, with Bolsonaro seen as licking Trump’s boots while Lula was presenting himself as standing alone against American dominance. But I think it was mostly the lesser of two evils. I doubt too many Brazilians are thrilled.

Don’t forget Congress, particularly the Senate, which is powerful in Brazil and could remove some of the more pro-Lula judges on the Supreme Court. Bolsonaro’s allies did quite well in the first round. Michelle Bolsonaro, Bolsonaro Senior’s wife, is in the Senate, along with a whole bunch of his allies.

It’s the inverse of what’s happened in the United States. There you’ve got a right-wing president and a left-wing Congress; in Brazil, you’ve got a right-wing Congress and a left-wing president. It’ll be interesting to see how Lula manages that.

Political unrest in Europe

Damien Bruckard: Speaking of left and right, there seems to be an increasing cleavage in Europe along those lines. Some quite extraordinary scenes from Paris in particular, where on the one hand I’m sad I’m not there when I ordinarily am, but on the other I’m quite glad because most of my neighbourhood is being trashed.

It’s not confined to Paris, or even France. There have been protests across the country and in Italy, Albania, Germany and elsewhere. What’s your sense of the root causes and what they could mean for upcoming elections? France, in particular, has a presidential election coming up in around six months. So across the continent, to the extent possible.

Michael Feller: In France there are lots of different protest movements using the broader chaos to drive home their agendas. We’re essentially in an election campaign, so there’s a rationality to it: they’re trying to shape the agenda for their respective causes.

The problem is that the more left-leaning demonstrators, who make up the majority, are digging their own grave. I think they’re making their ostensible representative, Jean-Luc Mélenchon, even less attractive to the median French voter, and making the election of Marine Le Pen more likely. That’s the outcome I see.

As long as France remains in the EU and the EU has rules around fiscal rectitude, it has to fix its budget. It can’t just do what the United States does and let the dollar do its magic. It’s going to be a tough few years for the French.

Damien Bruckard: It’s a very tricky position for whoever ultimately leads France. There’s a generational dimension, as well as the debt and fiscal position. There’s simply not enough money to go around. The pension state has ballooned enormously and it’s been impossible to get increases in the retirement age and other reforms that might provide a little more room to respond to the demands of students and ameliorate their grievances.

There’s very little fiscal room for the state, and it’s hard to balance those interests, particularly with a National Assembly that’s completely divided and unable to get anything done.

Michael Feller: I think the days of balancing interests and trying to please everyone are rapidly coming to a close. I suspect the only way Le Pen, or whoever takes charge, gets out of this is with a sort of French Margaret Thatcher impersonation.

Damien Bruckard: Cut the Gordian knot.

Michael Feller: Absolutely. And I think she would probably relish that, because you can get some of your other ideas through under the cloak of fiscal repair work.

What’s less straightforward is what’s happening in Germany. Those protests are far smaller in aggregate, and Germany’s fiscal position is much better. I’ve written about Germany’s demographics, which present a completely different situation on the other side of the river. But they’re also in a real funk.

They’ve got this guy running the country who said the other day that his job was not to be the darling of the German people. Well, what are you for? You’re a politician. You’re meant to be popular. Our friends in the political analyst community sometimes forget that politics is a popularity contest. In a democracy, people need to like you and support you. It’s not just business management.

Merz comes from that business background and seems to think he can be the tough CEO and please the shareholders. But dude, the shareholders are your voters.

I would hate to see the AfD come to power because, unlike Le Pen, they’re not just hard conservatives. Some of their members are genuinely hard right. We bandy around terms like fascist or neo-Nazi, but there are people in that party who lean that way. That’s quite frightening.

A couple of months ago, I thought there was no way we’d end up in that situation. The CDU would fix itself or appoint a new leader; Merz would see the writing on the wall. But I don’t think he sees it. I wonder now whether the drift in German politics will lead to a situation where only a far-right government breaks the Gordian knot.

That’s such a shame because Germany didn’t need that. Maybe France needs a real disruption. But it’s extraordinary how hopeless the CDU and SPD have been.

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New Zealand, Europe and US politics

Damien Bruckard: Let’s move to some of the questions coming through.

I’ll start with one that seems to be from across the ditch, as the questioner puts it: any thoughts on the New Zealand elections? And a second question, on Bloomberg’s reporting that Marco Rubio is weighing whether to leave the Trump administration. What would it mean if one of the few grown-ups in the room left?

Michael Feller: On New Zealand, I haven’t been following it as closely as I should. I’m intending to write something about it today. But I think it’s going to be a pretty even split between Labour and National, with the balance going to the smaller parties.

At least in the pundit sphere, the centrist Opportunities Party seems favoured to be kingmaker, as opposed to the traditional kingmaker, Winston Peters, who’s on the populist right. On the balance of probabilities, I’d expect an Opportunities–Labour government, because the leader of the Opportunities Party seems more inclined that way than towards National, let alone National and some of the other right-wing parties like Peters and ACT.

The Greens also seem to be doing quite well in the polls. So my tip would be a Labour–Opportunities–Greens coalition. Back to Ardern-style niceness and economic catastrophe.

Damien Bruckard: And Rubio?

Michael Feller: Rubio. From the sublime to the ridiculous. If I were him, I’d be leaving the administration soon. However, every man has his white whale, and Rubio has Cuba.

Right now, as Secretary of State, National Security Advisor and viceroy of Venezuela, there’s no better chair to sit in if you want to achieve regime change in Cuba. So I suspect we’ll see at least an attempt, perhaps a failed attempt, before he leaves to campaign. I think Rubio will leave the administration to campaign at some point, but it might not be for another few months.

Damien Bruckard: Another question, and I like the way it’s framed: with all the rolling unrest in Western Europe and increased pressure from manufacturing lost to China, is there a world in which the EU disintegrates and the monetary union ends, so that nation states can swim their own races?

Michael Feller: People have been asking that almost since Europe was created. I think it’s unlikely because the net benefit to everyone is greater than the costs. The countries that would do best swimming on their own, like Germany, are probably also the most afraid of that prospect. Even the AfD is moving away from Euroscepticism, and Britain is a cautionary tale for most Europeans of what can happen when you leave the bloc.

Everything dies eventually. At some point the EU will turn into something else, or it will go. But I don’t see that happening in the next decade or two.

If anything, look at the problems in the United States and China. If you believe, as the AI bears do, that this has all been a waste of money and we’re heading into another mega-recession because of AI overbuild, Europe, which has built less, might actually turn out to be the cleanest dirty shirt.

So whilst Paris is burning, perhaps it’s a Lord Rothschild, buy-when-the-cannons-fire kind of moment, because things can’t get much worse.

Damien Bruckard: Another question: if the midterm elections can be viewed as a repudiation of Trump, fuelled by a highly engaged Democratic base and a disengaged non-MAGA Republican base, does this imply that Trump’s win in 2024 was due to Harris being a poor candidate? And what would it mean should she be the nominee in 2028?

Michael Feller: Very much so. I think that’s an astute observation. People vote for people as much as parties, particularly in presidential elections. Enough people were a bit meh on Kamala Harris not to turn out for her. The pro-Trump people got Trump in.

It entirely depends on whom she’d run against. If it were JD Vance, I think she’d win. If it were Marco Rubio or Ron DeSantis, I’m less sure. It would depend on what other disasters happen in the next two years that can be attributed to Trump and the Republicans.

But I don’t think Harris will be the candidate. Looking at all the seats the Democrats have picked up, I expect the DNC and the big cheeses in the party, like Schumer and Hakeem Jeffries, will want someone who appeals to those otherwise non-Democratic voters. My money would be on more of a Jon Ossoff-type character who, assuming he’s not a disaster over the next two years, would have appeal to those voters. I don’t think Harris, being from San Francisco if nothing else, has much appeal in the Deep South.

Damien Bruckard: Same for Gavin Newsom. I’d put them in a very similar category, and not just because they’re from San Francisco.

Another thing that bears reflection is the concern over the last few years about authoritarian creep in the United States, and whether its system has sufficiently robust checks and balances to prevent it. It took a while for the Supreme Court to reject some of the legislation and executive orders pushing the envelope, but it has appeared to be something of a bulwark.

Now, with these midterms, presumably the system will look a little more stable over the next few years, even if all these fights continue. Do you agree that the checks have worked better than we might have thought a year or two ago? And is the election significant for that reason, irrespective of whether you’re Democrat- or Republican-leaning?

Michael Feller: I think the checks and balances have shown themselves to work. The vote was so emphatic that Trump didn’t even try to say it was rigged.

Damien Bruckard: As has happened in Israel and other places, for instance.

Michael Feller: I think the fears of authoritarianism in the USA may not come to pass. But other effects of Trump will remain: isolationism, protectionism on trade and belligerence overseas. We could see some of that carried on by a Democratic president, certainly on trade.

Joe Biden was protectionist in a sense, just not as voluble as Trump. He certainly wasn’t a free trader. I think American free trade died before Trump was elected, when the internal polling Hillary Clinton was reading led her to repudiate the Trans-Pacific Partnership Agreement. Ever since, outside the business chambers, there’s been no constituency for global free trade in the United States. Perhaps free trade with Canada has had a bit of a fillip recently, as we’ve seen with swings in places like Maine and Ohio.

That, I think, will be a more durable legacy of Trump than authoritarianism. Globally, though, authoritarianism is still very much on the rise. Democracies have done a bad job in recent years of delivering on promises, providing stability and giving people predictability.

That’s not always the politicians’ fault. There are structural trends, technological change, and uncertainty around China and the world order. But even if the US isn’t run by a dictator, I think there will be more dictators elsewhere in the years ahead.

Damien Bruckard: There’s another dimension to that, perhaps not leading to dictatorship but certainly contributing to disaffection. Just about every Western advanced industrialised democracy has struggled to achieve economic growth except through migration.

That creates a dilemma. The less growth there is, the fewer job opportunities there are, and the harder it is for younger generations to find work and eke out a living. That helps drive a backlash against migration. Governments are then in an invidious position: cut migration to satisfy voters, knowing that doing so could crimp growth even further, or maintain it against public opposition.

Michael Feller Totally.

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The Donroe Doctrine

Damien Bruckard: Another question, again on the United States but also Brazil, relating to lame-duck foreign policy and Lula’s fourth term. What’s the outlook for the so-called Donroe Doctrine and US policy under Trump in Latin America?

Michael Feller: The Donroe Doctrine was probably never going to work in South America because the countries are too big and complicated. Javier Milei has been Trump all the way, but even other ostensibly right-wing governments, in places like Peru and Ecuador, are still doing deals with China. Nothing’s fundamentally changed.

Chile’s right-wing government is quite new but extremely unpopular. Paraguay, which I’m going to write about today, and Bolivia are going through convulsions.

Where the Donroe Doctrine might work is in Central America and the Caribbean, simply because the countries are smaller, less complicated and more susceptible to manipulation. They need the United States overwhelmingly and don’t have as many options for trading with Europe and China.

I can imagine that US sphere-of-influence posture continuing even under a Democrat. Perhaps they won’t invade countries or kidnap presidents, but they’ll maintain that approach. In many ways it’s been a feature of the last 200 years. America has always intervened in the so-called banana republics of Central America, and I don’t think that will ever really change, sadly for them.

Did that answer it?

Damien Bruckard: Maybe a follow-up to that is the other half of the Western Hemisphere, Canada in particular.

Michael Feller: Greenland.

Damien Bruckard: And Greenland too. But Canada is in a pretty interesting position. Mark Carney is now famous worldwide for standing up to Donald Trump, rather like Hugh Grant versus Billy Bob Thornton in Love Actually, protesting the special relationship and how it has changed.

Canada has also recently released some significant bureaucratic papers, including foreign policy and defence white papers, with more coming over the next few months. They’re questioning the long-held assumption, embedded in almost everything about Canada, that the US will be a benevolent neighbour. They’re having to rethink their entire foreign policy.

With trade negotiations going on right now, how do you see the longer-term consequences of this Donroe Doctrine for Canada and for the middle powers of the world?

Michael Feller: Trump has really been a gift to the Canadian federation. Canadians are famously, well, I wouldn’t call them unpatriotic, but they’re a bit like us Australians: patriotic when playing sport, but not terribly over the top about it. This has been a gift for their sense of national unity.

I think the vote in Alberta the other day on holding a referendum would have gone differently if not for Trump. In Quebec, there will always be a large constituency for independence. But the lingering memory of Trump may keep Quebec tied to Canada even after he goes, when the provincial government intends to hold yet another independence referendum. They’ve had a few and they’ve never worked.

The question is what Canada can do beyond integrating more within itself. Geographically and economically, it can never escape the orbit of the United States. It can’t just join the EU and declare the problem solved. The British have struggled with Brexit; Canada can’t Brexit from the US, even if the US is pushing it away.

Canada might build a pipeline to the Pacific coast. It might have the most comprehensive free trade agreement Europe ever signs under some future association arrangement. But the US is right there, and it’s hard not to prioritise your biggest neighbour if you’re a business.

Damien Bruckard: The geo in geopolitics.

Michael Feller: Exactly. At best, Canada might diversify its trade so that it’s reliant on the US for, say, 70 per cent of it. But it will struggle to push the US share much lower without causing great harm to its economy.

Indonesia

Damien Bruckard: Well, as a millennial, what I will say is, poor Canada, all the way down there, per Homer Simpson. And I’ll use another Simpsons quote to pivot to Indonesia at a crossroads, Homer there reading The Economist.

So Indonesia is at a crossroads, Michael.

Michael Feller: Sure is. Always at a crossroads, always will be. Its latest economic growth has been okay, but its share market is in a terrible state and people are quite upset with their government by Indonesian standards. Prabowo, the president, has just brought 21,000 troops into Jakarta. They say it’s a routine deployment, because of course that’s what you routinely do, right?

I wonder whether, if there are protests next week and they turn violent as they did last year, he’ll crack down aggressively. I think that could be the straw that breaks the camel’s back. If you had soldiers shooting, a massacre of students, something like that, it would be reminiscent of allegations against him when he was a military commander, including accusations of massacres in Timor and elsewhere.

It could become volatile, not just for the Indonesian share market but for Indonesia more broadly.

I don’t think he’ll implement martial law because I don’t think it would work. Indonesia isn’t Thailand. You can’t just have a coup. It’s too complicated and too spread out. I think the days of Indonesian coups are long gone. I could be wrong; maybe he’ll have a crack.

But they’re on coup watch, as I said. I think he has that authoritarian bent, and some of the other ingredients that could lead to such an outcome are present.

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Cuba

Damien Bruckard: Another question, perhaps not coup watch but intervention watch. The US seems to be trying to strangle Cuba into collapse, though we don’t hear about it much outside the American press. What’s the most likely pathway to resolution?

Michael Feller: Rubio will want to keep strangling Cuba so that there’s regime change he can declare was due to him, and then campaign on that. He’ll be incentivised to continue the policy. And Trump likes regime change in other countries, so he’ll be incentivised too.

It’s fairly low-cost for the United States. It isn’t costing them much beyond upsetting liberals and drawing condemnation from the United Nations, which I think they welcome. Sadly, I see that policy continuing.

But I don’t see Cuba snapping. Like the Iranians, they’re very good at dealing with bad economies and surviving. They went through worse after the collapse of the Soviet Union, before they were able to pivot to other things. It was a complete basket case. I don’t think they’re at that level yet. If they only have to hang on for another two years, they probably can.

The next question is whether the US goes from a policy of strangulation to one of armed intervention. That’s the wild card. I can see reasons for it and reasons against it. But if Rubio wants to roll the dice, he has a president who’d probably roll the dice with him.

The month ahead: the good, the bad and the ugly

Damien Bruckard: One final question, and then we’ll let you all free. I’ll frame it in the way we’re thinking about structuring a potential podcast next year. Tell me whether this is a good theme: the month ahead, Michael, the good, the bad and the ugly.

Michael Feller: The good. I wish you’d told me you were going to ask this question. The good is that geopolitics has never been more interesting. No, I—

Damien Bruckard: Sorry. That’s the hardest one. A bit of moderation in the US, perhaps?

Michael Feller: Not until January, when the new Congress comes in. So within this one-month period, perhaps we’ll actually see progress at this year’s COP climate summit because the US is missing in action. For that reason alone, others can create new rules, whether or not they’re followed. At least it creates a new benchmark.

The bad is Indonesia. As I was saying, that could become a really horrible situation.

Damien Bruckard: All right. And the ugly?

Michael Feller: The ugly is that perennial risk of Trump’s knee-jerk escalation on Iran. That’s still very much in view over the next month.

Damien Bruckard: What a horrible way to finish a conversation. We’ll have to think about that structure. Thanks very much, Michael, and thanks everyone for joining us. I hope you’re enjoying reading Geopolitical Dispatch. I was glad to see one comment very appreciative of both the art and the puns. As you all know, it’s one of the places on the internet where you can read some non-AI writing. We hope you continue to read that. Forever human.

Michael Feller: Always, always. Forever human. See you next time, guys.

Damien Bruckard: Thanks very much, everyone. Have a great day.

Hello,

Here are the five things you need to know today:

• UNITED STATES. The data centre fallout begins to compute.

• PARAGUAY. A bank collapse fells a Trump and Taiwan ally.

• UKRAINE. RUSSIA. Melania seeks to midwife a premature deal.

• IRAN. Fake offers are countered with real threats.

• BANGLADESH. Garment worker protests could see a reverse-Hasina.

Modelled on the Presidential Daily Brief, Geopolitical Dispatch gives you the intelligence you need in the time you have. Subscribe to read all five analyses.

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UNITED STATES. AI caramba

The data centre fallout begins to compute.

Asian markets crashed Friday, following a 4.36% fall in the S&P 500 and a 5.52% fall in the Nasdaq. Donald Trump blamed the Democrats. Doubt was cast on Anthropic’s IPO. Texas’s governor-elect called for a moratorium on new data centres.

INTELLIGENCE. Enthusiasm may return with the release of a well-timed METR report, saying Anthropic is building its models at twice last year’s rate (whatever that means) despite a pledge to slow down development. Yet there’s only so many times an unprofitable and incestuous industry can claim the singularity without being met with scepticism or, with a Democratic Congress, scrutiny. And as new data centres get cancelled, momentum elsewhere could stop.

FOR BUSINESS. Alongside war and inflation, the median voter appears to hate AI. And judging from the price action, many investors do as well. With two of its most prominent boosters – Trump and Elon Musk – having egg on their face, the judgment of the rest of the sector is in doubt. As recently in Australia, where an IPO was canned due to a sceptical market, a shift in US ebullience could present a Minsky moment. And that’s even before another rate rise.

PARAGUAY. Run from your money

A bank collapse fells a Trump and Taiwan ally.

President Santiago Peña ‌resigned Thursday as lawmakers moved to impeach him over the collapse of a digital bank he once indirectly owned a stake in. Prosecutors said Peña was being investigated as eight bank executives were arrested.

Read more

Hello,

Here are the five things you need to know today:

• IRAN. Tehran isn’t ready to concede, and neither is Trump.

• UNITED STATES. It is, perhaps, the end of the beginning.

• CANADA. Ottawa may hope for a deal but will keep hedging.

• SOUTH AFRICA. A municipal vote heralds a new era.

• INDONESIA. Prabowo could end the year by living dangerously.

🇺🇸The midterms are done. Join our subscriber webinars later today (US) and tomorrow (Europe, Asia) for the full analysis on what this means for you.🇺🇸

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IRAN. Looking down the barrel

Tehran isn’t ready to concede, and neither is Trump.

Brent crude fell 8% amid speculation Donald Trump would fire Pete Hegseth and the Democrats would withhold war powers in Congress. Tehran said four tankers caught fire hitting mines in Hormuz as it held a mock execution of Trump.

INTELLIGENCE. As in other areas, Trump has never sought Congress’s permission, and he can always fund the war from existing budgets. It also takes two to TACO. Even if he wanted to end the war, Iran won’t let him without harsh terms. Supreme Leader Mojtaba Khamenei said the US’s collapse had accelerated and “the slightest inclination toward submission” would only embolden it, adding that US enmity would persist regardless of who was in power.

FOR BUSINESS. Trump’s strategic choices remain what they were at the start of the week – escalation or capitulation – even if the politics have changed. And while Tuesday’s result was met in tones conciliatory by Trump’s standards, he still has enough pride to defend the war and deny he’s sacking Hegseth (who may nonetheless take a Senate vacancy). Likewise, he won’t want to follow a 1974-level drubbing with a 1975-style evacuation from a foreign theatre.

UNITED STATES. Water off a lame duck's back

It is, perhaps, the end of the beginning.

The White House posted a “public service announcement” that Trump was still president after the media reported his administration’s “death knell” and “the beginning of the end”. JD Vance told Twitter: “the reason we lost is the war.”

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Hello,

Here are the five things you need to know today:

• UNITED STATES. Trump looks set to play the sore loser.

• ISRAEL. IRAN. Tensions remain locked in escalation mode.

• SAUDI ARABIA. YEMEN. Aramco surges, as do the Houthis.

• POLAND. Tusk navigates Nawrocki, the markets, and Moscow.

• INDONESIA. Prabowo tries to smoke out his enemies.

🇺🇸The midterms are done. Join our subscriber webinars this Thursday (US) and Friday (Europe, Asia) for the full analysis on what this means for you.🇺🇸

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UNITED STATES. When the tide goes out

Trump looks set to play the sore loser.

The Democrats swept the House and Senate, including via historic upsets in Kansas, Texas, and South Carolina. Donald Trump railed against Fox News for media bias and said if he were on the ballot, “we would have won IN A LANDSLIDE!”

INTELLIGENCE. The result was conclusive, including because it came on record turnout for many states. Trump and MAGA Republicans may dispute the outcome, or seek to delay its confirmation, but barring any extraordinary events, the Democrats look set to take the levers of Congress in the new year. Still, there’s much damage a hurt and vengeful president can do at home and abroad, particularly when enabled by officials whose necks are now also on the line.

FOR BUSINESS. The Democrats may not impeach Trump, who’ll still have his veto to keep Congress cooperative, but they’ll almost certainly go after his associates, both in and outside the administration. Tesla and SpaceX fell in after-hours trading. Betting market odds for a pre-emptive firing of Pete Hegseth (who may also be a convenient scapegoat on Iran) have risen. The war is being blamed for Trump’s loss. Yet ironically, that loss may now cause its escalation.

ISRAEL. IRAN. Not cut and dried

Tensions remain locked in escalation mode.

Trump said the US would cut $4 billion in annual military funding to Israel and had no immediate plans to strike Iran. Israel had given the US intelligence that Iran was considering the use of chemical weapons, the New York Times said.

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An earlier version of this email had the second dispatch missing. Apologies.

Hello,

Here are the five things you need to know today:

• IRAN. As Washington says one thing, Tehran says another.

• UKRAINE. RUSSIA. Moscow remobilises for war and peace.

• BRITAIN. Burnham starts to make mincemeat out of Brexit.

• BELGIUM. De Wever may have reached the end of the line.

• DR CONGO. RWANDA. The US steps up a cold war in a hot place.

🇺🇸It’s the US midterms today. Join our subscriber webinars this Thursday (US) and Friday (Europe, Asia) for the full analysis on what this means for you.🇺🇸

Subscribe now

IRAN. The feeling ain’t mutual

As Washington says one thing, Tehran says another.

Donald Trump said oil was “dropping like a rock” as “people feel that there will not be a war with Iran.” JD Vance said he and Trump “feel pretty good” about a deal. The US hit Qeshm Island after Iran claimed to have downed three US aircraft.

INTELLIGENCE. Trump has claimed to be close to a deal for eight months. Oil falls each time, then quickly rebounds. If there is a silver lining, it’s that Tehran has reportedly amended its offer to allow Hormuz to reopen within two days, not seven, but the conditions for doing so are presumably the same (the US leaving the region; economic reparations; no nuclear limits). This may be better than Trump nuking Pickaxe Mountain, but it doesn’t mean it’s any more likely.

FOR BUSINESS. Iran is not incentivised to give Trump a pre-midterms gift. If it did, the price would be great. More likely, it will continue to make the US economy suffer until he capitulates or leaves office. And while Iran’s economy is also suffering, it has decades of experience. Lifelines via Russia continue. Some of its oil escapes via Pakistan. China continues to provide political cover. As Oman’s sultan visited Monday, Beijing said it would soon send an envoy.

UKRAINE. RUSSIA. At Witkoff’s end

Moscow remobilises for war and peace.

Kyiv said Moscow had used Melania Trump’s humanitarian ceasefire in southern Kherson to regroup and was plotting a “massive strike” during the midterms. Steve Witkoff said he would host trilateral peace talks in Abu Dhabi next Tuesday.

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Hello,

Here are the five things you need to know today:

• IRAN. As Washington says one thing, Tehran says another.

• UKRAINE. RUSSIA. Moscow remobilises for war and peace.

• BRITAIN. Burnham starts to make mincemeat out of Brexit.

• BELGIUM. De Wever may have reached the end of the line.

• DR CONGO. RWANDA. The US steps up a cold war in a hot place.

🇺🇸It’s the US midterms today. Join our subscriber webinars this Thursday (US) and Friday (Europe, Asia) for the full analysis on what this means for you.🇺🇸

Subscribe now

IRAN. The feeling ain’t mutual

As Washington says one thing, Tehran says another.

Donald Trump said oil was “dropping like a rock” as “people feel that there will not be a war with Iran.” JD Vance said he and Trump “feel pretty good” about a deal. The US hit Qeshm Island after Iran claimed to have downed three US aircraft.

INTELLIGENCE. Trump has claimed to be close to a deal for eight months. Oil falls each time, then quickly rebounds. If there is a silver lining, it’s that Tehran has reportedly amended its offer to allow Hormuz to reopen within two days, not seven, but the conditions for doing so are presumably the same (the US leaving the region; economic reparations; no nuclear limits). This may be better than Trump nuking Pickaxe Mountain, but it doesn’t mean it’s any more likely.

FOR BUSINESS. Iran is not incentivised to give Trump a pre-midterms gift. If it did, the price would be great. More likely, it will continue to make the US economy suffer until he capitulates or leaves office. And while Iran’s economy is also suffering, it has decades of experience. Lifelines via Russia continue. Some of its oil escapes via Pakistan. China continues to provide political cover. As Oman’s sultan visited Monday, Beijing said it would soon send an envoy.

UKRAINE. RUSSIA. At Witkoff’s end

Moscow remobilises for war and peace.

Kyiv said Moscow had used Melania Trump’s humanitarian ceasefire in southern Kherson to regroup and was plotting a “massive strike” during the midterms. Steve Witkoff said he would host trilateral peace talks in Abu Dhabi next Tuesday.

Read more

Hello,

Here are the five things you need to know today:

• UNITED STATES. A last-minute switch won’t swing the midterms.

• IRAN. Talks to head off renewed attacks may buy little time.

• UKRAINE. RUSSIA. Mysterious hacks hit Kyiv and Moscow.

• POLAND. A judicial spat could backfire on Nawrocki.

• GERMANY. Demographics blunt hope for a Gen-Z revolt.

You’re reading one of today’s five analyses.
Subscribe to read all five, every weekday.

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UNITED STATES. Haley Mary

A last-minute switch won’t swing the midterms.

Congresswoman Haley Stevens, who lost Michigan’s Democratic Senate primary to Abdul El-Sayed, endorsed Republican candidate Mike Rogers, citing an ad that blamed Israel for high prices. Trump invited "smart" Stevens to switch parties.

INTELLIGENCE. The New York Times‘ final poll shows the Democrats ahead in all seven states that will decide the Senate, including Michigan. An attempt to probe the race in Alaska has been thrown out of court. Trump’s rallies in Iowa, Kansas, and Texas have underwhelmed. The lead in Maine is widening. As with Liz Cheney’s 2024 endorsement of Kamala Harris, Stevens move risks galvanising votes against a machine politician now seen as part of a “uniparty”.

FOR BUSINESS. Some Democrats may want to see El-Sayed lose, even if it costs control of the Senate, as this would slow the progressive wing’s momentum ahead of the more important 2028 presidential election. Yet endorsing a Trump candidate, and one who has played on a virulent Islamophobia, undermines a national campaign message on inflation, wellbeing and integrity, which promises to deliver a historic swing, despite GOP redistricting and spending.

IRAN. Home strait

Talks to head off renewed attacks may buy little time.

Oil futures fell as Axios said Trump had told Benjamin Netanyahu he wanted to give diplomacy more time amid concerns of an impending strike. Mojtaba Khamenei said any attack would be responded to “without geographical limitations”.

Read more

Hello,

As we head into the final months of an already tumultuous year, the intersection between geopolitics and business is only growing more complex. We try to distil this complexity in our daily dispatches, but as much as we do our best (or worst) with the puns, there’s only so much distillation you can do without losing much of the flavour.

Today, we’re launching a new occasional guest column, “Invitation to Treat”, which brings the views of the world’s best minds to add back that flavour through deep perspectives on some of the moment’s biggest themes.

Alongside Iran and energy markets, artificial intelligence has undoubtedly been the biggest of these, intersecting virtually every economic and geopolitical question. And, on the eve of another mega-IPO, there are few more important aspects, both economically and geopolitically, than how the market might finance the enormous buildout the hyperscalers have promised.

There’s also no one better to cover it than Lee Hodgkinson, chief strategy officer of the Saudi Tadawul Group, and a former senior executive at the London Stock Exchange, NYSE Euronext, and SIX.

We hope you enjoy it.

Michael

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In 1973, the futurist Arthur C. Clarke wrote: “Any sufficiently advanced technology is indistinguishable from magic.” As we see artificial intelligence, computing, data, digital infrastructure, and space forming a new ecosystem today, his observation from over 50 years ago seems particularly insightful^[1].

The magic, however, requires an astonishing amount of capital.

The huge amount of computing power needed by artificial intelligence requires semiconductors, data centres, energy and cooling facilities, as well as connectivity that depends on both terrestrial and ever-more space-based networks and infrastructure. For example, SpaceX’s Starlink is currently changing the scale of low-Earth-orbit satellite connectivity, whilst the possibility of moving computing and data processing into orbit (and even to the moon) is being explored, although significant technical and economic challenges mean this remains an emerging research frontier rather than an immediate next step.

Financing all of this will require capital on a scale reminiscent of the great infrastructure transformations of previous eras, from railways in the 19^th century and electrification in the 1920’s to contemporary telecommunications and the internet^[2]. Bain & Company estimates that the AI industry will need to generate some $6 trillion of annual revenue by 2031 to support the scale of investment currently envisaged across the new ecosystem. To put that number in perspective, $6 trillion exceeds the entire annual economic output of Germany.

So that’s quite some challenge for the finance industry.

However, the implications go beyond the scale of capital required. As technology acquires the capital requirements of infrastructure, the way in which it is financed is changing, creating new financial risks and dependencies across the ecosystem. As economies and states become increasingly dependent upon that infrastructure, questions of who finances, hosts and controls it are becoming increasingly important. In particular, the ability to determine access to critical capabilities, dictate their terms of use or make switching to alternatives difficult, is becoming a potential source of strategic power.

The Return of Public Markets

For most of the last twenty years, private capital enabled several of the most innovative technology companies in the world to achieve exceptional scale before they went public. It was therefore the case that a great deal of value creation took place before the public-market investors could participate. It seems that may now be changing.

SpaceX’s record-breaking IPO in June 2026 valued the company at approximately $1.77 trillion. Anthropic could provide the next major test, with a valuation of around $2 trillion while carrying more than $500 billion in future commitments, principally tied to the computing infrastructure required to develop and operate its AI models. According to a recent interview with Forbes magazine, OpenAI CEO Sam Altman is planning an IPO in 2027, and others may eventually follow.

However, the return of mega-scale technology companies to public markets creates an interesting paradox. Public market investors may regain some of their access to future value creation that had migrated into private markets, only to find their portfolios becoming still more concentrated in the same technology-infrastructure ecosystem. This raises an important question: how much exposure do investors ultimately want to the growing AI and technology-infrastructure ecosystem?

The technology sector, which includes companies like Apple, Microsoft, and Nvidia, already serves up nearly 40% of the S&P 500. It’s worth noting, however, that this excludes tech-driven giants such as Alphabet and Meta (included in the Communication Services category), along with Amazon and Tesla (contained in the Consumer Discretionary sector). The arrival of another wave of trillion-dollar technology and infrastructure companies could intensify the existing concentration challenge, an issue which is already becoming an important consideration for asset allocators, with BlackRock highlighting AI-related concentration as a growing portfolio-management challenge.

Whether individual IPOs occur according to today’s anticipated timetables is less important than the overall direction of travel. The significance lies not simply in their size and scale, but in how they are increasingly breaking down the boundaries between technology and infrastructure. That’s important because infrastructure has traditionally been valued, financed and risk-managed very differently from technology.

From Technology to Infrastructure

Consider a deceptively simple question: what exactly is SpaceX?

Is it an aerospace company, a telecommunications business, a defence contractor, a digital infrastructure provider, a data business or an AI company? Arguably, it is all of the above.

SpaceX therefore embodies the convergence of technology and infrastructure within the company itself, whereas Anthropic reveals the same convergence through external dependency. It sells intelligence, but faces infrastructure-scale financing requirements without necessarily enjoying infrastructure-like cash flows. Its significant long-term commitments for computing and hosting capacity may provide predictable revenues for infrastructure providers such as Amazon, Google and Microsoft, while exposing Anthropic to material fixed costs without any guarantee of corresponding customer revenues. Broadcom, a leading semiconductor and infrastructure technology player, has agreed to offer up to $42 billion in financing to support Anthropic’s computing needs, which shows how the perimeters of supplier, financier, and commercial partner are starting to blur, giving rise to concerns about the circular nature of the ecosystem.

Data centres reinforce the point. KKR, drawing on McKinsey analysis, points to almost $7 trillion of cumulative global data-centre infrastructure capital expenditure by 2030. Power, land, cooling, grid connections and network capacity are increasingly becoming serious constraints, with the economic effects already becoming visible, as AI-related investment contributed roughly one percentage point to US real GDP growth in 2025.

Alison Porter at Janus Henderson distinguishes between a technology theme, which creates opportunities within an industry, and a technology wave, which requires investment across multiple layers of the economy. AI increasingly looks like the latter, because its development is dependent on an expanding stack of models and software, semiconductors, computing power, storage, networks, data centres, electricity, and connectivity. As a result, investing in one area often increases demand and creates limits in others.

What we continue to call a technological revolution is therefore becoming an infrastructure revolution too.

The New Commanding Heights

There is an interesting historical parallel.

As Arnold Kling and Nick Schulz recount in their 2011 essay, Lenin used the expression “commanding heights” in 1922 to describe the critical sectors upon which the wider Soviet economy depended (principally electricity generation, heavy manufacturing, mining and transportation). Setting Lenin’s politics aside, the underlying observation remains interesting in that some infrastructures matter disproportionately because so much other economic activity depends on them.

Historically, major technological revolutions have been accompanied by the development of new infrastructures upon which subsequent economic activity depends. Railways, electrification, telecommunications and the internet all involved massive capital outlays for new infrastructure. Each of them went through phases of speculation and overinvestment, yet in each case infrastructure was also created which enabled economic activity far beyond what the original investors could have imagined.

Perhaps, then, we should ask what the new commanding heights of the global economy of the twenty-first century are?

Any plausible answer will include compute, artificial intelligence, proprietary data, digital networks and, increasingly, space-based infrastructure. As Lenin would surely appreciate, these are not simply fast-growing industries. They are becoming infrastructures upon which other industries, and increasingly nation-states themselves, depend. Once infrastructure creates dependency, the ability to control critical nodes within interconnected systems can become an important source of strategic power.

However, before considering the implications of that dependency, there is a much more immediate question for capital markets: how will all of this actually be financed?

Capital Markets Are Evolving

The sheer scale of the investment required means this transformation is unlikely to be financed through venture capital and public equity alone. Increasingly, we are seeing the financing requirement extending into debt markets.

Citing Morgan Stanley estimates, the Bank of England has most recently calculated that debt issuance linked to AI had reached $450 billion by early September 2026, which, according to Reuters, is roughly twice the amount seen in 2025. However, debt requires a different discipline. Whereas equity investors can tolerate considerable uncertainty in pursuit of extraordinary growth, credit investors look for predictable cash flows, tangible assets, strong counterparties and contractual protection. Recent developments at SpaceX illustrate the tension. Despite its IPO and subsequent $25 billion bond issuance in June, the company is reportedly seeking a further $40 billion in debt financing to purchase Nvidia chips. The announcement prompted a sharp rise in the cost of insuring its debt against default, with five-year credit default swap spreads increasing from around 110 basis points in June to 194 basis points in October.

The challenge, therefore, is determining how to finance the enormous capital requirements of AI, which parts of the ecosystem can support infrastructure-style financing, which remain exposed to technology-sector risks, and where those risks ultimately reside.

For example, data centres are now driving a lot of real estate fund-raising and can support long-duration financing where cash flows are backed by contracts with investment-grade technology companies. However, as AI-related borrowing grows, credit investors are becoming more selective, favouring companies that have tangible infrastructure and more predictable revenues. According to the Financial Times, this process is already in train, as bonds of several major US and data centre ventures have fallen significantly below their issuance price, as concerns around construction delays, financing costs and the risks associated with increasingly complex commercial arrangements begin to bite. The market evolution is already extending beyond conventional financing. The Chicago Mercantile Exchange is planning to introduce standardised futures based on GPU rental prices, which would enable users and providers of computing capacity to hedge their exposure to future price fluctuations in a way similar to how commodity derivatives allow producers and consumers to manage their risk concerning the prices of energy or raw materials.

All of this shows us that the finance industry is learning how to finance intelligence as infrastructure, as computing power itself is evolving from a technology input into an investable, financeable and increasingly tradeable economic resource.

Power

The story is beginning to move beyond capital markets. As economies become ever more dependent on the technology and infrastructure being financed, questions of capital become questions of power.

In States and Markets, the political economist Susan Strange identified knowledge as one of the four structures of power in the global political economy^[3]. Arguably, that insight has never been more relevant. The digital economy is changing the way we create and use knowledge and, at the same time, the systems that help generate, process, and share that knowledge are becoming more important than ever. It is therefore unsurprising that governments are becoming increasingly focused on the geopolitical implications.

Farrell and Newman’s concept of ‘weaponised interdependence’ offers a complementary perspective. They demonstrate how asymmetric networks can create powerful advantages for actors controlling essential nodes or chokepoints, particularly where they can restrict access or make the creation of alternatives difficult to establish. As AI, computing and digital infrastructure become progressively interconnected, similar dependencies may create new opportunities for the exercise of strategic power. The importance of these networks therefore lies as much in the dependencies they create as in the physical assets from which they are constructed.

Recent events in Ukraine illustrate how infrastructure dependencies can become sources of strategic leverage. Restrictions on SpaceX’s Starshield satellite communications service disrupted Ukrainian military operations, with Reuters alleging that the decision originated in the White House. Similar vulnerabilities exist in undersea cables, which carry more than 99% of international data traffic. Their concentration along critical routes exposes global communications and financial markets to disruption, while raising important questions about who controls these increasingly strategic networks. The physical vulnerability of this infrastructure is increasingly apparent, with recent NBC News analysis identifying at least 27 attacks affecting data centres across conflicts worldwide.

“Whosoever commands the Sea commands the Trade,” Sir Walter Raleigh is reputed to have said. Britain subsequently built a large part of its global power on that very principle, since the advantages gained from controlling the infrastructure used for commerce were much greater than the value of the ships themselves^[4]. The strategic domains have expanded since then, first to air power and then to space.

Space has long played a strategic role, dating back to the German V-2 rocket launched in 1942, and the 1957 Soviet launch of Sputnik-1, the world’s first artificial satellite. During the Cold War, reconnaissance satellites lowered the chances of nuclear surprise and misunderstanding and the 1991 Gulf War showed that space-based technology could play a key role in military operations. Today, however, falling costs and technological advances are broadening access dramatically, with private companies accounting for the majority of missions and more than 20 nations operating space programmes.

NATO now formally recognises space alongside land, sea, air and cyberspace as an operational domain, reflecting the extent to which modern economies and military capabilities depend upon the infrastructure located there. However, the significance of space increasingly derives from the communications, navigation, data and intelligence infrastructure that rockets and satellites enable.

Space has consequently been described as the “ultimate high ground”^[5]. Its strategic significance increasingly lies in the infrastructure embedded within it. For those of us who have spent our careers around exchanges and market infrastructure, this is particularly interesting. We are accustomed to thinking about infrastructure as the systems through which markets operate. Increasingly, the same logic can be applied to this emerging technological infrastructure, where control over critical capabilities can shape the technical standards and commercial ‘rules of the game’ under which everyone else participates. As states themselves become increasingly dependent on privately controlled infrastructure, the boundary between commercial influence and political authority may become harder to define. This is structural power, in precisely the sense that Susan Strange described.

Conclusion

The companies being financed today are constructing parts of the infrastructure through which the future global economy will operate. The challenge for capital markets is to understand how the risks and returns of this emerging infrastructure are distributed across the companies that develop, finance and depend upon it.

As this infrastructure becomes increasingly important to economic competitiveness and national power, questions of financing, ownership and control will intersect with questions of national strategy and security. Of particular importance will be who can control access to critical capabilities, determine the terms of their use and make switching to alternatives difficult.

In this context, the distinction between commercial and national strategic infrastructure may become increasingly difficult to delineate. The coming wave of technology listings therefore matters for reasons that extend far beyond IPO league tables or the profits made by their early investors.

The views expressed in this article are my own and do not necessarily reflect those of any organisation with which I am employed or affiliated.

^[1] Clarke, A.C. (1973) Profiles of the Future: An Inquiry into the Limits of the Possible. Revised edition. London: Pan Books.

^[2] Perez, C. (2002) Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages. Cheltenham: Edward Elgar Publishing.

^[3] Strange, S. (1988) States and Markets. London: Pinter Publishers.

^[4] Killingray, D. (2004) ‘Introduction: Imperial Seas: Cultural Exchange and Commerce in the British Empire, 1780–1900’, in D. Killingray, M. Lincoln, and N. Rigby (eds.) Maritime Empires: British Imperial Maritime Trade in the Nineteenth Century. Boydell & Brewer, pp. 1–12.

^[5] Christopher Coker, Future War (Cambridge, UK: Polity Press, 2015), 65.

Hello,

In this edition of Week Signals:

• IN REVIEW. Political upheaval; from process to protest; scenarios for public disorder.

• UP AHEAD. Reckonings for Washington and Wellington; summits for empires past; questions for Iran and Ukraine.

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The Week in Review: The pursuit of unhappiness

The week began with shock elections in Brazil and Serbia. It ended with questions about whether a similar shock will be in store for the United States.

For political news junkies, it may feel like Christmas has come early, with not just these big upsets, but a tied election in Israel, the stirrings of a renewed opposition movement in Venezuela, and, of course, the ongoing uncertainty in oil markets and the Middle East. For the rest of us, however, it’s like Halloween has come early. The question then for today, its official date, is how much scarier it’s going to get.

We’ll be unpacking all that in our monthly webinar for paid subscribers next week, rescheduled by a few days to allow us to digest the implications of the midterms. In the meantime, beyond the previews on how we see things unfolding in the Week Ahead section below, there’s probably not much more to say that hasn’t already been covered voluminously elsewhere.

Yet what may be more useful than prematurely predicting the midterms’ strategic lessons is some reflection on how businesses should think about a combustible political environment more broadly, regardless of the results. And while this isn’t a prediction of political violence in the US, it’s a reflection of how politics is happening beyond the ballot box and the parliamentary chamber.

Few know this better than our analyst Oscar Martin, who, based in Paris, has been seeing it daily on his walks to work. With more big protests expected today, events in France show how, like water finding its level, views will be expressed through arson and looting if there’s no better channel.

France’s Emmanuel Macron is the type of leader any geopolitical analyst likes. He’s intelligent, educated, technocratic, serious, and diligent. His ideas and policies are grounded in evidence and fact.

But this all makes him a terrible politician. People are often irrational and emotional, and the job of a political leader is to channel that irrationality and emotion, not ignore or belittle it. And while, at the opposite end of the spectrum, it shouldn’t be the job of a leader to exacerbate these traits – the habit of populists from Mussolini to Trump – if there’s no safety valve for their expression, the gasket will blow.

That’s of course a gross simplification. There are many other non-leadership reasons why France is so convulsive. Including, even more simply, that it’s France. But lest you think that the world’s problems could be solved by removing the demagogues from the scene, keep reading below.

Oscar begins:

As someone who’s been living in Paris for the last two years, I’ve seen my fair share of protests. However, the recent protests, which began with teachers, students and parents at a school in Créteil who blockaded their school due to declining standards in education, have by far and away been the most intense yet.

The largest day of protest on October 17 drew 550,000 according to the government, while organisers put the figure at 800,000. This marked an escalation from high school students to a nationwide demonstration. The protests have been largely peaceful, but have also seen riots, looting and violence between protesters and police.

The police response has arguably been one of the driving factors behind the escalation of protest activity across France. Reports of injured teenagers have brought parents and other adults into a movement initially organised around education. Earlier in the movement, a 15-year-old in Lens lost a hand to a police grenade and another minor was blinded in one eye, reportedly by a rubber bullet. Personally, I’ve been lucky not to have been tear-gassed just walking around central Paris, whereas friends of mine have had their eyes hurt while simply waiting in line at a ramen shop.

Despite the coverage of seemingly massive disruptions, the French have an attitude towards these events that contrasts with much of the rest of the world, particularly in English-speaking countries. The attitude is one of vast engagement with politics and protest, but also a calmness in the chaos that surrounds it. I’ve seen riot police charge at protesters with batons, with groups of locals calmly drinking wine at a café on the sidelines. In France, there is a distinct attitude that has acclimated to forms of protest, but also to political violence.

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Hello from Sydney,

We would like to invite you to our November private roundtable discussions taking place this coming Thursday 5 and Friday 6 November.

We are holding the discussions later in the week than usual to allow for an interpretation of the results of the US midterms as well as…

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Hello,

Here are the five things you need to know today:

• UNITED STATES. GDP comes in hot but may soon go off.

• VENEZUELA. A Trump-backed election is as fishy as it sounds.

• IRAN. Markets start to price in near-term escalation.

• FRANCE. The ECB’s president quits to speak her mind.

• INDIA. The cockroaches move back onto the streets.

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UNITED STATES. Artificial ingredients

GDP comes in hot but may soon go off.

Third-quarter GDP rose 3.4% annualised, with strong AI-related investment offsetting higher oil prices and low consumer confidence. Weekly jobless claims came in at a 57-year low. Nasdaq futures, however, tanked on tech earnings upsets.

INTELLIGENCE. Artificial Intelligence (or Super Intelligence to Donald Trump) has rescued the US from recession, but may also send it there, if stock prices are an omen. Vast spending on data centres is yet to turn a profit. Alphabet’s negative cashflow saw its shares fall 12.6%, wiping out $500 billion in value (the GDP of Denmark). Amazon and Intel fell 7% and 23% in aftermarket trading. Federal debt, meanwhile, has hit 100% of GDP, the highest level since WWII.

FOR BUSINESS. While GDP is a lagging indicator, the Nasdaq is down 5.13% since its all-time high on 6 October. This isn’t great for Anthropic’s November IPO, but spare a thought for China’s tech sector. The ChiNext index is down 38% from its all-time high on 13 May, with unprofitability and circular financing also causing investor concern. At least its leading labs, Moonshot and Z.AI, can now claim to have bested Anthropic’s Fable 5 in key performance benchmarks.

VENEZUELA. Democracy in the Americas

A Trump-backed election is as fishy as it sounds.

Opposition leader Maria Corina Machado said Washington had proposed Caracas hold elections in 2027 but did not mention Trump's suggestion of making Venezuela the 51st state. President Delcy Rodriguez flagged state asset sales.

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Hello,

Here are the five things you need to know today:

• IRAN. Vance looks to steer the war from its drivers.

• UNITED STATES. Trump sows doubt in a scorched-earth campaign.

• CANADA. EUROPE. Carney’s plans rub against familiar terrain.

• BRITAIN. Healey and Burnham postpone the fiscal reckoning.

• SPAIN. A deadly train crash derails Sanchez’s campaign.

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IRAN. JD take the wheel

Vance looks to steer the war from its drivers.

Donald Trump said JD Vance was simply offering “help with medical supplies” after the Wall Street Journal said the vice president wrote to Iran’s security council. Reports circulated that the US and Israel would attack Iran on 4 November.

INTELLIGENCE. In the fog of competing narratives, it’s hard to discern the purpose, let alone the likely effects, of Vance’s letter. But Trump’s deputy has subtly been at odds with the rest of the administration on the war and, amid expressing similar differences on Israel, he may be trying to shape outcomes while his boss is distracted with the midterms and Benjamin Netanyahu is distracted with post-election coalition talks. That’s, at least, the region’s hope.

FOR BUSINESS. Different parts of Iran’s government are likewise communicating different messages, but that appears to be an intentional good-cop-bad-IRGC routine. Third-party mediators are pushing separate accounts too. Turkey’s Tayyip Erdogan spoke to Trump Wednesday to outline negotiating efforts by the Mecca Defence Alliance, following its visit to Tehran. Qatar put forward its own proposal Sunday, albeit which Iran immediately put doubt on.

UNITED STATES. Bombshell Alaska

Trump sows doubt in a scorched-earth campaign.

Trump accused the Democrats of perjury after the New York Times said the party had planned to split the vote for Alaska’s junior senator. Trump suggested Minnesota Governor Tim Walz deserved the electric chair for stealing money.

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Hello,

Here are the five things you need to know today:

• ISRAEL. Netanyahu loses his majority, but not his power.

• SAUDI ARABIA. YEMEN. Another oil hub attack sends prices soaring.

• UKRAINE. RUSSIA. Putin suddenly has a choice of interlocutors.

• EL SALVADOR. HAITI. The coolest dictator steps into the hottest kitchen.

• THE AMERICAS. Florida becomes the latest refuge of the scoundrel.

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ISRAEL. Devil-may-caretaker

Netanyahu loses his majority, but not his power.

Benjamin Netanyahu said “this is only the beginning” as the Likud party led a close election in early counting, despite his coalition’s loss of its majority. Israel and the US would launch strikes after the midterms, the Wall Street Journal said.

INTELLIGENCE. A potentially long period of coalition negotiations begins, and Netanyahu can potentially use military force, allowable under caretaker provisions, to complicate discussions and bring wavering opposition members to his side. He’ll also use the spectre of a bigger bloc of Arab and left-wing parties to convince those opponents they’re better off with him than against. Either way, there seems little chance of a shift in Israel’s strategic and foreign policy.

FOR BUSINESS. Netanyahu has wrangled all sorts of alliances in his 19 years in power, and he doesn’t need the far-right bloc he assembled in 2022 to be belligerent on Iran or Palestine. And even if the presumed opposition leader, Gadi Eisenkot, takes charge, hardliners in the Knesset, as well as his stated beliefs, augur for a similarly hawkish stance. And while a 77.7% turnout and a swing toward the pro-Palestinian Joint List are notable, they’re not enough.

SAUDI ARABIA. YEMEN. Chokepoint chicken

Another oil hub attack sends prices soaring.

Yemen’s Houthis claimed to have hit Saudi Arabia’s Ras Tanura oil hub Tuesday and to have repelled an advance near the Bab-el-Mandeb strait. Brent hit $116 as Iran said it would begin targeting tankers that had not paid its Hormuz tolls.

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Hello,

Here are the five things you need to know today:

• IRAN. The Sunni powers make another push for a deal.

• EGYPT. TURKEY. Another layer is added to a messy contest.

• ISRAEL. Washington looks to save Netanyahu, even if he loses.

• UNITED STATES. Trump searches for fraudulent excuses.

• CANADA. Carney could be another midterms winner.

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IRAN. Peace upon a time

The Sunni powers make another push for a deal.

Pakistani, Saudi, and Turkish officials met Iran's president Monday before he left for Moscow. Donald Trump said "we didn't start the war with Iran. Iran started the war with us." US strategic petroleum reserves fell to 282.6 million barrels.

INTELLIGENCE. Trump continues to claim he “holds the cards”, but his recent success in getting oil out seems to have peaked, with the Houthis claiming to have hit Saudi Arabia’s East-West pipeline, and with more damage reported to tankers in Hormuz. After shunning recent advances made on the US’s behalf, Iran is now talking to the members of the Mecca Defence Alliance directly. Discussions reportedly included a $1 billion offer for a truce with the Houthis.

FOR BUSINESS. It’s unlikely the Houthis will stop fighting for the cost of a Patriot missile battery, but Brent crude has dipped below $115 on anticipation of a deal between Riyadh and Tehran, even if Washington isn’t involved. Further progress could be made on the sidelines of Vladimir Putin’s gas exporters summit today, which Qatar’s emir will also attend. Yet unless Trump gets a win, he may see no choice but to strike, bringing regional efforts back to square one.

EGYPT. TURKEY. My frenemy's frenemy is my frenemy

Another layer is added to a messy contest.

Egypt’s parliament approved a military deployment to Saudi Arabia as Kenyan media reported that 1,000 Egyptian personnel would be sent to Somalia under a bilateral agreement, rather than the African Union’s existing support mission.

INTELLIGENCE. Egypt, which isn’t a member of the Mecca alliance, appears to be

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Hello,

Here are the five things you need to know today:

• MIDDLE EAST. The region faces a week of deadly choices.

• BRAZIL. Lula wins the ultimate comeback a second time.

• VENEZUELA. Machado comes back to seize the moment.

• SERBIA. A shock win for young protesters will shake Europe.

• UKRAINE. RUSSIA. Kyiv gets a reprieve as Trump bows to the hawks.

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MIDDLE EAST. If not now, when?

The region faces a week of deadly choices.

Donald Trump told reporters Sunday "there will not be a strike today" on Iran, after earlier saying "it may be tomorrow". Benjamin Netanyahu denied the IDF had refused an order to attack over the weekend due to the timing of Israel's election.

INTELLIGENCE. The region has been convulsed by speculation of an imminent strike, punctuated by reports of explosions over Saudi pipelines and Iranian missile launchers. An AI image from Netanyahu, showing Tel Aviv under nuclear attack, hasn’t helped. For now, the risk of an Israeli strike ahead of its elections seems to be diminishing. Yet Trump continues to urge Israelis to vote for his ally, and it’s not impossible he could order an October surprise himself.

FOR BUSINESS. Netanyahu undoubtedly wants to hit Iran while he can, whether to forestall a vote he risks losing, or because he truly thinks Iran is once again close to a nuclear breakout (as has been claimed before). The calculus is less clear for Trump, who may also have an interest in democratic disruption, but has shown less stomach for a fight. Brent’s fall today suggests the market agrees, but his UN ambassador has mused the war could last another year.

BRAZIL. Blame it on Bolsonarismo

Lula wins the ultimate comeback a second time.

Lula da Silva won a fourth term in a 51.8% second round result. Flavio Bolsonaro demanded the result be annulled, saying the courts had “stolen” the election by extending voting by 90 minutes in places where public transport wasn’t available.

INTELLIGENCE. Bolsonaro’s sour grapes appear dangerously familiar. Lula’s third

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Hello,

In this edition of Week Signals:

• IN REVIEW. Butterfly effects and chaos theory; Black Swans vs the Mule; and getting to Tuesday.

• UP AHEAD. Elections in Brazil, Serbia, and Israel; China's Fifth Plenum; and US interest rates.

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The Week in Review: Stormy weather

The week began with waivers on Russia, riots in France, and escalation in the Middle East. It looks like it’ll end the same way.

On the surface, as busy as it was, it seemed less a week of pivots than of trends. Things were noisy but continued in an already-established direction: waning US support for Ukraine, waning public support for European centrists, and waning patience for the unhappy status quo in the Gulf and the Red Sea.

Yet a series of pivots do approach, most notably in several key elections, including Brazil and Israel this coming week, and the US midterms the one after. And while the outcome for the US election, at least, is getting clearer - a victory for the Democrats in both the House and the Senate – how Donald Trump reacts to this, or moves to confound it, is still unknown.

At a rally in Florida overnight, the riddle deepened with Trump suggesting the US “may do another little Epic Fury” just as his Middle East envoy, Tom Barrack, told a podcast there could be a strike “this weekend”. Benjamin Netanyahu has certainly been upping the ante. Declaring the West Bank “closed” yesterday, and vowing to “destroy” Hebron after two soldiers were killed, fears of a pre-election escalation may indeed play out over the next 48 hours.

In 1972, meteorologist Edward Lorenz famously asked: “Does the flap of a butterfly’s wings in Brazil set off a tornado in Texas?” The idea caught on, spawning the phrase “butterfly effect“. And certainly, from a geopolitical perspective, the theory holds, as we’ve written before. While it’s hard to trace a major calamity to a single cause or flap of the wings – even oft-cited cases like Sarajevo’s “shot heard around the world” in 1914 were a little more complicated – there’s an endless library of examples of where seemingly unforecastable mistakes, upsets, Black Swans, and random occurrences have led to big political change. We even have another expression, quite apt for times like this: the October Surprise.

But what if the causal event is neither small nor unforecastable? If a butterfly can cause a tornado, what whirlwind might be reaped from a tactical nuclear attack on Pickaxe Mountain or the full-scale occupation of Palestine, both of which now seem (just) within the realms of possibility? We’ve also written before about low-probability, high-impact events. Yet when they’re anticipated, whether via the pricing mechanism of markets or the preparations encouraged by political declarations, does the impact diminish?

Lorenz’s 1972 speech was not just about the weather but about the broader concept of chaos theory. Like weather, but perhaps even more so considering the inherent agency of human beings, geopolitics is a chaotic, non-linear system. And as much as betting markets, AI, superforecasters, pollsters and geopolitical Substacks might try to break it down into probabilistic chunks, it’s usually a mug’s game trying to predict it (hence why we prefer scenario analysis instead).

Thus, even if an “October surprise” may not be such a surprise, there are still all sorts of chaotic and unforeseen consequences that may arise from it. And even if the first-order effects can be anticipated and managed (Brent’s recent rise to ~$117 at the time of writing suggests this is the case), the second, third and nth order effects can be harder to quantify, and can be ultimately more consequential.

Renewable fuel mandates, backed by Barack Obama in the 2008 election, led to higher conversion of corn to ethanol in the US. A global food price spike in 2010, in part helped along by such mandates, led to the self-immolation of a young fruit seller, Mohamed Bouazizi, in a central Tunisian town later that year.

This, in turn, would be seen as the proximate cause of the 2011 Arab Spring. And that, in turn, would be seen as the proximate cause of the 2015 European border crisis, which was the proximate cause of Brexit and perhaps Trump 1.0, which was the proximate cause of where we are today.

Now, while that may seem like turtles all the way down, good luck in forecasting it. In my conversation with Damien Bruckard earlier this month, we discussed how history is a mix of structural forces and singular individuals. And while you can model the former, like in Asimov’s Foundation, you can’t predict the Mule (or Bouazizi, or Trump). And even in the short term – say the next two days – you can’t really predict what a Trump (or a Netanyahu) might do. As Damien has said elsewhere, most of science is a big data problem, but political science, and geopolitics, is a small data problem, or specifically, the data of what’s inside the brains of a few key people, Trump, Vladimir Putin, Xi Jinping and so forth. And while hedge funds may now have a feed to Trump’s Truth Social, I doubt the hive mind of the Kremlin or the Zhongnanhai will ever be available for download via an API.

Still, in the business of geopolitical risk analysis, you’re not paying us to say something vague. You want the week ahead (and we’ve got a good one, further below the paywall). So, what are we likely to see before Tuesday?

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Hello,

Here are the five things you need to know today:

• ISRAEL. IRAN. Netanyahu comes to the last pre-election window.

• LIBYA. EGYPT. A maritime border crosses lines further south.

• TUNISIA. The home of the Arab Spring heats up again.

• VENEZUELA. The post-Maduro scaffolding begins to fall.

• UNITED STATES. The election goes from creepy to sinister.

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ISRAEL. IRAN. Cometh the hour

Netanyahu comes to the last pre-election window.

Brent hit $114 as Saudi Aramco evacuated headquarters staff and Russia repatriated workers from the Bushehr nuclear plant. Donald Trump accused Iran of “faking” attacks to boost oil prices. Benjamin Netanyahu vowed to “topple” Tehran.

INTELLIGENCE. The New York Times says plans are afoot for a US-Israel strike after the midterms. But Netanyahu is neck-and-neck with Gadi Eisenkot in the final days before Israel’s election on Tuesday, and for him, at least, the only opportunity to strike Iran may be this weekend. It’s unclear what this would achieve, and the IDF has told local media there’s no operational requirement, but the same would be true after 3 November, and without the political impetus.

FOR BUSINESS. Strategically, there are more reasons not to escalate, but politically, for both Trump and Netanyahu, there may be little to lose from another roll of the dice. Beyond any bump in the polls, let alone a drop in oil as Iran and the Houthis ratchet their own threats, there’d be a distraction from fresh claims of Jared Kushner hiding $1 billion in UAE funds at Israel’s central bank, or the overriding sense that nothing good has come from eight months of war.

LIBYA. EGYPT. Sea change

A maritime border crosses lines further south.

Greece and Egypt were in talks to extend their exclusive economic zones to Cyprus, Athens said, after Libya’s House of Representatives ratified an expansive boundary agreement with Turkey, agreed to by the government in Tripoli in 2019.

INTELLIGENCE. Libya’s Tobruk-based parliament, affiliated with warlord Khalifa

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Hello,

Here are the five things you need to know today:

• UKRAINE. RUSSIA. A resumption of trilateral talks is just the start.

• FRANCE. Macron holds a mirror to those apportioning blame.

• IRAN. The sound of rattling may not be what it seems.

• UNITED NATIONS. A potential superpower proxy enters the race.

• CYBERSECURITY. Fears over AI hacking mask bigger vulnerabilities.

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UKRAINE. RUSSIA. Not the end of the road

A resumption of trilateral talks is just the start.

Vladimir Putin agreed to hold three-way talks with Ukraine after meeting US envoy Steve Witkoff. Witkoff praised Putin as a “humanitarian” after the release of an American citizen. Marco Rubio said Ukraine “wouldn’t exist” without the US.

INTELLIGENCE. Kyiv is under pressure to concede to Putin’s demands, as Washington looks to a potential Yalta-style summit with Moscow and Beijing, and Brussels looks to salvage what geopolitical heft it can retain in a spheres-of-influence world. This, ironically, may give Volodymyr Zelensky leverage of his own, particularly as US politicians cry foul over what appears to be another pre-midterms act of desperation by Donald Trump as yet more missiles hit Kyiv.

FOR BUSINESS. Ukraine isn’t winning the war, but by denying Russia victory (at least without US assistance) it can seek better terms. It’s unclear whether these will include NATO guarantees (for whatever they’re still worth under Trump) but that may be a quid pro quo if Russia gets the rest of Donetsk. In the meantime, the US will likely continue to throttle intelligence. And while Europe still claims solidarity, Poland and Slovakia are showing signs of wavering.

FRANCE. Je suis avec stupide

Macron holds a mirror to those apportioning blame.

Emmanuel Macron said foreign criticism of recent riots was “stupid” as Trump warned Midwesterners the same could happen to them and Russia urged France to “close your borders”. Italy sent 500 troops to Milan to control its own riots.

INTELLIGENCE. Paris isn’t the only place on fire, with protests from Lisbon to Tirana.

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Hello,

Here are the five things you need to know today:

• IRAN. Trump fails to secure peace, but he can still screw markets.

• YEMEN. SAUDI ARABIA. Britain joins the defence of the realm.

• UKRAINE. RUSSIA. Brussels looks to trump Washington’s deal.

• INDONESIA. As the president strangles the economy, voters revolt.

• UNITED STATES. Republicans decide to campaign on fraud.

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IRAN. Coming up short

Trump fails to secure peace, but he can still screw markets.

Brent crashed 5% after regional media reported a “breakthrough” as Pakistani and Qatari delegations arrived in Tehran. Brent bounced back after senior officials refused to meet Pakistan's Asim Munir and the Qataris left after 30 minutes.

INTELLIGENCE. More delegations are allegedly on their way, but after declarations on Truth Social and “leaks” via Axios lost their potency, the use of third-country mediators may now also be failing as a tool of the TACO Tuesday trade. Nonetheless, with large short positions placed minutes before the headlines, someone at least made money. Iran says its stance on Hormuz remains the same. Reuters said officials had no interest in giving Trump a reprieve.

FOR BUSINESS. Donald Trump may never stop crying deal but the returns (assuming they’re intended) will continue to diminish. Escalation remains the likelier path. Keeping oil prices high are ongoing signs of military planning. The USS Theodore Roosevelt is heading to the region with another Marine expeditionary unit as more tankers in Hormuz have allegedly been struck. Trump says he’s “winning” and “can leave right now”, but his actions suggest otherwise.

YEMEN. SAUDI ARABIA. Mecca for importers

Britain joins the defence of the realm.

Britain said the Royal Air Force would help protect Saudi Arabia from Houthi attacks as Ankara moved to ratify its Mecca defence pact with Riyadh and Islamabad. Iran said it had not had a Saudi or Houthi response on its offer to mediate.

INTELLIGENCE. The UK joins France and regional powers in protecting Saudi cities

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