Reliably Democratic Illinois is no one’s idea of ​​a swing state.

But three heated House primaries next week in the Land of Lincoln illustrate the broader vulnerabilities of both major political parties contesting the general election: age, extremism and immigration. In today’s newsletter, I’m going to tell you about some fascinating primaries that will shed light on some broader trends in American politics.

Let’s start with Illinois’ 12th Congressional District, in the southern part of the state. Mike Bost, a Republican and Marine Corps veteran, was first elected to the House of Representatives in 2014. The Democrats tried him as “Slump Mike,” He highlighted his outbursts in the state legislature, warning: “He would make Washington worse.”

Well, those were simpler times. Ten years later, Bost is what passes for an establishment Republican. He chairs the House Committee on Veterans’ Affairs and sits on the agriculture and transportation committees, from which he can direct money and projects to the largely rural district that spans the bottom third of the state.

His main opponent, Darren Bailey, is proving that in the era of Donald J. Trump, there may be no limits to the rightward trajectory of the Republican Party. Bailey, you may recall, was the fiery, pro-Trump Republican whom Illinois Democratic Governor JB Pritzker spent big money to run for governor in the 2022 Republican primary, thinking he would easily could be defeated – which he was. Pritzker won by almost 13 percentage points.

Bailey calls Bost “Amnesty Mike,” an insufficient apostle of Trump’s “America First” agenda. But Bost has Trump’s support. And to make matters even more interesting, Bailey is endorsed by Matt Gaetz, a high-profile Trump ally and rabble-rouser, who heated run-ins with Bost. It’s all enough to make heads turn.

Don’t say ‘age’

Democrats have their own problems that are captured in races in their stronghold of Greater Chicago. Let’s start with age: Danny Davis has represented a part of Chicagoland that stretches from Lake Michigan to the western suburbs for nearly 28 years, and at age 82, he’s determined to stay in Washington.

Chicago Treasurer Melissa Conyears-Ervin and a youthful community organizer, Kina Collins, are eager to send him to a well-deserved retirement on Tuesday.

But for the Democratic establishment, “age” is a word not spoken out loud, not with President Biden in the White House. Davis is a year older than the president, and the Democratic elite, including Pritzker, have once again rallied around him. The governor cited Davis’ “steadfast commitment to serving the people of Illinois with integrity, compassion and dedication.”

In an interview with The Chicago Tribune, even Conyears-Ervin took pains not to question Davis’ age. “It’s the energy, it’s the vision, it’s the relevance,” she said.

Immigration division

Just down the road, in Illinois’ Fourth Congressional District, two Mexican-American Democrats, Rep. Jesús “Chuy” García and Chicago Alderman Raymond Lopez, face off in a primary centered on immigration and the influx of migrants – many of them ride buses. or flown to Chicago by Republican governors.

No issue has dominated Chicago politics over the past year more than the influx of migrants who have overwhelmed shelters in Chicago and its suburbs.

Lopez has pushed for the revocation of Chicago’s sanctuary city status and much tighter border security, positions that would once have been unthinkable in his progressive city. García, who sticks to the more traditional Democratic position, wants more work permits for migrants, the decriminalization of undocumented immigrants and a path to citizenship for those brought to the country as children.

The divisions within the Mexican American community mirror the divisions among Hispanic voters nationally, a divide that Republicans hope to exploit, as my colleagues Jennifer Medina and Ruth Igielnik reported yesterday.

Ultimately, the power of those in power and the money ensure that Bost, Davis and García will all survive, even if there are no guarantees. And whoever wins, it will almost certainly not change control of the House of Representatives, because they represent districts far beyond the reach of the opposition party.

But similar issues driving their primary battles will play out in swinghouse districts and swing states across the country. Republicans from Trump on down will put immigration, border security and their idea that Biden is simply too old for another term at the forefront. Meanwhile, Democrats will portray the Republican Party as too extreme and authoritarian to take control of government.

In that sense, the Illinois primaries are a test run. Check out the results on Tuesday.

The candidate who almost emptied her bank account

Today’s political antennae have become extremely sensitive to oddities in House campaigns, especially résumés that don’t add up and campaign finance revelations that fall outside the norm. So eyebrows were raised early this year when a political unknown, Krystle Kaul, took the fundraising lead in the wide-open Democratic primary to succeed Rep. Jennifer Wexton in the suburbs and outskirts of Washington, DC.

The race for the Democratic seat has 13 candidates, including former Virginia House Speaker Eileen Filler-Corn, a state senator, Jennifer Boysko, and an Army veteran turned Virginia delegate, Dan Helmer. In early January, after 2023 fundraising deadlines passed, Helmer thought he had won last year’s prize when he announced he had raised more than $600,000.

Two days later, Kaul, a defense and communications contractor who ran as a “national security Democrat,” defeated him with $604,000, of which $447,800 came from her own pocket in the form of a loan to her campaign. Her personal financial disclosures showed she earned about $302,000 last year — well-off but not rich by political standards. Her total net worth is somewhere between $490,000 and $1 million, according to her financial disclosure, which lays out a range of values ​​for a candidate’s assets.

Kaul speaks proudly of her Indian heritage, especially the Hindu Kashmiri side of her family, and she has received financial support from South Asians, a key voting bloc in Virginia’s 10th District. But she is not the only Indian American in the race. Suhas Subramanyam, a senator with much more political prominence, is also in the Democratic pack. But his fundraising totals — $271,902 at the end of 2023 — lagged far behind Kaul’s.

In an interview, Kaul responded to questions about her fundraising numbers but acknowledged the unusual size of her loan to her campaign. It is, she said, a big gamble.

“To be clear, I’m not a millionaire, so to put that money in, yes, you’re right, it’s a big amount of money. It is most of what I have,” she said, saying it all came from her own bank account. (A loan from an unnamed donor would violate campaign finance law.) “But that’s because I believe strongly in wanting to create a safer America.”

It’s not a household name yet, but anyone who follows the stock market knows at least something about Nvidia.

The company is the wonder of the year, a stock by which all others are measured. Nvidia designs the chips that make artificial intelligence work, and with AI being hailed as the most important technological development since the internet, Nvidia’s shares have soared since last year.

I’m not qualified to judge how important – or how dangerous – AI will ever become, but I am paying close attention to the stock market, which values ​​Nvidia at more than $2.2 trillion, making it the third-largest publicly traded company in the world world is. world behind Microsoft and Apple.

The enthusiasm for AI is boosting the stock prices not only of Nvidia, but also of many other tech companies believed to be aware of the technology’s potential, including Microsoft, Meta and Alphabet, as well as other chipmakers such as AMD, Taiwan Semiconductor and Intel .

But the blistering pace of Nvidia’s profits — up about 290 percent over the past twelve months — has me and many Wall Street analysts wondering how sustainable this run is. The answer has implications for the entire market.

There are many ways to investigate this, including traditional stock analysis, which takes into account revenue, earnings, cash flow, business growth and momentum. I took an unusual approach: I asked several AI chatbots about Nvidia’s prospects as a stock. Specifically, I asked how large Nvidia’s market value would be in ten years if the company’s stock price maintained its current pace.

What they told me boiled down to this: the sharp rise in Nvidia stock cannot continue for long. And with much of the stock market embroiled in the same feverish AI-driven stock frenzy, the message is broadly true. If the market doesn’t slow down soon, it could inflate itself into a bubble – and eventually all bubbles will burst.

On a personal level, I love new technology, but I try not to get too excited about it until I’m sure it works safely and reliably. As far as I know, AI produces spectacular visuals and is fun to play with, but it is neither reliable nor safe (yet).

(The New York Times sued OpenAI and Microsoft in December for copyright infringement of news content related to AI systems.)

What’s in a billiard?

To their credit, all three AI chatbots I asked – Microsoft Copilotpowered by OpenAI’s Chat GPT-4; Google Gemini; And Claude 3 from Anthropic – were hesitant to answer my questions directly.

All said they could not reliably assess stock valuations or predict with the slightest accuracy how a stock or the overall market would perform in the future. I wish stock analysts said that too.

Just because Nvidia’s stock price is growing rapidly now doesn’t mean it will continue to grow rapidly, especially over periods as long as ten years, they all warned me.

But I still forced them to do some basic calculations, which I supported with 20th century technology: a spreadsheet and a calculator.

The chatbots didn’t arrive at the same numbers every time and never agreed on the details. That’s another sign, in my humble opinion, that they’re not ready for prime time. I wouldn’t use them for math homework.

But in this case, the details didn’t really matter. Ultimately, and with considerable prodding, they all came to the same basic conclusion: the simple laws of compound arithmetic tell us that if the company’s stock price continues to rise at its current rate, Nvidia will end up with a market cap in the trillions of dollars. dollars.

Quadrillions are an order of magnitude that I’m not comfortable with, so I resorted to a dictionary: One trillion dollars that is 1 with 15 zeros after it, or a thousand trillion dollars in American parlance. (In British English, a quadrillion is even bigger: 1 with 24 zeros. I’m using the American definition.)

How big is that? The global economy – the combined size of all annual gross domestic products of every country in the world – reached $100.88 trillion in 2022, according to the World Bank. So if Nvidia continued to grow at its current annual rate, the output of the entire known economic universe would shrink within a decade.

Claude 3, the Anthropic AI chatbot, calculated that Nvidia, at its current growth rate, would become a $2.76962 trillion company within ten years, then warned me: “This is an extremely large number that actually seems unlikely, because Nvidia is many times larger than the entire global economy.”

In plain English, Nvidia’s astonishing growth over the past year is far too high to continue for long. I would be wary of buying shares of Nvidia, or any other stock, in the belief that its momentum is perpetual. What goes up can come down, and somewhere down the road it certainly will.

This warning reinforces what traditional valuation measures show. Nvidia’s stock price, and the prices of many stocks, are high. They can be justified by assuming that their sales and revenues will grow at a breakneck pace. But if stock prices rise faster than profits, the market will eventually crash.

Do you remember Apple?

Nvidia is an impressive company. The company’s products are well-reputed, in high demand, and generating huge, fast-growing profits.

February’s latest earnings report, which unleashed enormous optimism in the stock market, contained eye-popping numbers. And in a call with Wall Street analysts, Nvidia CEO Jensen Huang gave Wall Street something exciting to think about. The company’s technology lays the foundation for a new industrial revolution, he said.

“We are now at the dawn of a new industry in which AI-specific data centers process massive raw data and refine it into digital intelligence,” he said. “Like AC power generation factories of the last industrial revolution, Nvidia AI supercomputers are essentially AI generation factories of this industrial revolution.”

The sky is the limit for the coming years, he suggested.

But Nvidia will inevitably grow more slowly. It is absurd to think that it can become bigger than anything else in the universe.

But it can still grow quickly. Some companies have previously succeeded in sustaining rapid long-term growth.

At various stages since its founding in 1976, Apple has baffled skeptics, who regularly said the company had become too big to continue growing rapidly. For example, in 2012, Apple’s market capitalization was $500 billion and its stock price had risen 68 percent in just eight months.

At the time, The New York Times quoted an analyst who used a spreadsheet, not a chatbot, to assess Apple’s prospects. The analyst concluded that if the company grew at just 20 percent per year over the next decade — much slower than its 2012 growth rate — Apple would be worth an impossible number by 2022: more than $3 trillion. That number doesn’t look strange now.

Apple’s market cap hasn’t quite reached it yet, but it’s close, at about $2.7 trillion. Its old rival, Microsoft, which was much smaller than Apple in 2012, now has a market capitalization of more than $3 trillion. These two giants have risen and fallen many times and show every prospect of being able to do so again.

I don’t know if Nvidia belongs in that lofty category, but it’s clear that while Nvidia won’t be bigger than the entire universe, it could be significantly more valuable in the next ten to twenty years. But maybe not.

It might look more like Cisco Systems, the most valuable company on the stock market in March 2000. That was the height of a new technology boom: the dot-com bubble. Cisco is still a solid company. The products form the backbone of the internet. But its market cap in 2000 was $567 billion. Now it is about $200 billion.

It will be fascinating to see how Nvidia’s fate unfolds. But because I can’t predict how the company, or any company, will fare in the long run, I don’t buy individual stocks – not Nvidia, Apple, Microsoft, Cisco or whatever.

Instead, I settle for broad, low-cost index funds that track the entire market. They are a passive and less risky bet on the future that does not require stock selection.

If Nvidia grows rapidly in the coming years, I won’t miss this entirely, as the stock market will likely grow as well. If Nvidia fails, other stocks will likely lose out at some point. At least that’s what happened over the past hundred years. The AI ​​boom is a thrill ride. If things start to slow down, those who hedged their bets will be glad they did.

BERLIN – Russia’s large-scale invasion of Ukraine two years ago was a huge shock to Europeans. Accustomed to the thirty years of post-Cold War peace, they had imagined that European security would be built alongside a more democratic Russia, not reconstructed against a revisionist imperial war machine.

There was no greater shock than in Finland, with its long border and historic tensions with Russia, and in Sweden, which had dismantled 90 percent of its army and 70 percent of its air force and navy in the years following the collapse of the Soviet Union . .

Following Russian President Vladimir V. Putin’s decision to attempt to destroy a sovereign neighbor, both Finland and Sweden quickly decided to apply to join the NATO alliance, the only clear guarantee of collective defense against a new aggressive and reckless Russia.

With Finland After I became a member last year, and the Hungarian parliament that finally approved the Swedish application on Monday, Mr Putin now faces an expanded and motivated NATO, a country that no longer dreams of permanent peace.

While NATO countries look with some trepidation at the possibility that the unpredictable Donald J. Trump, not a fan of the alliance, will become US president again, European members are taking measures to ensure their own defense anyway.

Critics say their actions are too slow and too small, but NATO is spending more money on defense, making more tanks, artillery shells, drones and fighter jets, putting more troops on Russia’s borders and approving more serious military plans for any possible war – while there billions of dollars are being funneled into Ukraine’s efforts to weaken Russia’s ambitions.

The reason is pure deterrence. Some member states are already suggesting that if Mr Putin succeeds in Ukraine, he will test NATO’s collective will over the next three to five years.

If Mr. Trump is elected and casts serious doubt on the United States’ commitment to defending NATO allies, “it could tip the balance for Putin to test NATO’s resolve,” Robert says Dalsjo, study director at the Swedish Defense Research Agency.

Even now, Mr. Dalsjo said, Mr. Trump or not, Europe must prepare for at least a generation of increased European containment and deterrence from a Russia that is becoming militarized, and where Mr. Putin clearly has “significant public support for his aggressive revanchism. ”

But with Hungary finally voting in favor of Sweden’s accession to NATO, the pieces are finally falling into place for a sharply strengthened NATO deterrent in the Baltic and North Seas, with greater protection for the frontline states of Finland, Norway and the Baltic states, which border Russia.

Once Hungary submits a letter confirming parliamentary approval to the US State Department, Sweden will become NATO’s 32nd member and all Baltic Sea countries, except Russia, will be part of the alliance.

“Sweden provides predictability and removes any uncertainty about how we would act in a crisis or war,” Mr Dalsjo said. Given Sweden’s geographic location, including Gotland, the island that helps control access to the Baltic Sea, membership “will make defense and deterrence much easier to achieve,” he said.

It was Russia’s massive invasion of Ukraine two years ago that prompted Finland to decide to join NATO, and Helsinki attracted a more reluctant Sweden to also apply to join.

Finland, with its long border with Russia, saw the most immediate danger; the Swedes did so too, but were also convinced, especially on the political left, by a sense of moral outrage that Russia, a permanent member of the UN Security Council, would try to destroy a peaceful, sovereign neighbor.

“Overall the feeling is that we will be safer,” said Anna Wieslander, a Swede who is director of northern Europe for the Atlantic Council.

History also mattered, Mr. Dalsjo said. “If Finland were to join, we had to – we could not be one more time a wall between Finland and its helpers in the West,” as neutral Sweden had been during Finland’s brave but losing “Winter War” against the Soviet Union in 1939, when Finland had to cede about 11 percent of its territory to Moscow.

Now that Sweden and Finland are together in NATO, it will be much easier to bottle up Russia’s surface fleet in the Baltic and keep an eye on the Far North. Russia still has two-thirds of its nuclear weapons there for the second strike, on the Kola Peninsula.

So the new members will help improve monitoring of a crucial part of the Russian military, said Niklas Granholm, deputy director of studies at the Defense Research Agency.

The Russian fleet in Kaliningrad, on the Baltic Sea between Poland and Lithuania, is just 200 miles away, as are the nuclear-capable Iskander missiles. NATO planners have long worried about how to support the Baltic countries if Russia seizes the 65-kilometer “Suwalki Gap” between Kaliningrad and Belarus, but Sweden’s position on either side of both the North as the Baltic Sea would make it much easier to send NATO reinforcements.

Russia will still keep its land-based missiles, of course, but its nuclear-armed submarines may find it more difficult to maneuver into the open sea without detection.

Sweden, with its own advanced high-tech defense industry, makes its own excellent fighter planes, naval corvettes and submarines, designed to operate in the difficult environment of the Baltic Sea. The country has already started developing and building a new class of modern submarines and larger corvettes for coastal and air defense.

With NATO membership it will now be easier to coordinate with Finland and Denmark, which also have important islands in the Baltic Sea, and with Norway.

After the collapse of the Soviet Union, Stockholm decided that war was a thing of the past. It removed almost all its troops from Gotland and reduced the national army by about 90 percent and the navy and air force by about 70 percent.

The armed forces are slowly being restored and spending on the military, which was almost 3 percent of gross domestic product during the Cold War but had fallen to about 1 percent, will reach 2 percent this year, the current NATO standard. “These investments will take time, and we must act faster,” Mr Granholm said.

Sweden could also join NATO’s multinational reinforced forward brigade in Latvia, which aims to deploy allied forces in all alliance countries bordering Russia.

Sweden’s main tasks, Ms. Wieslander said, will be to help monitor the Baltic Sea and the airspace above Kaliningrad; ensuring the security of Gothenburg, which is crucial for supplies and reinforcements; and to serve as a staging area for U.S. and NATO forces, with agreements for pre-positioning equipment, ammunition, supplies and field hospitals.

For both Finland and Sweden, membership marks the end of a long 30-year process of what Mr Dalsjo called ‘our long farewell to neutrality’. First came the collapse of the Soviet Union and the decision to join the European Union, which meant abandoning neutrality for what both countries called “military non-alignment.”

Sweden, which received silent defense guarantees from the United States, gradually became more explicitly Atlanticist and increasingly integrated with NATO, he said. “And now we are taking the final step.”

Sweden will have to adapt its strategic culture to working within an alliance, Ms. Wieslander said. “It will make a big difference for us, and allies will expect Sweden to show some leadership.”

Like Finland, Sweden will need to integrate its armed forces into NATO and develop new collective defense capabilities rather than focusing solely on homeland defense.

“It’s a steep learning curve,” Mr. Granholm said. “We do not yet have a complete picture of NATO’s regional plans,” but we will now do so as a full member. “Then we have to sink our teeth into what NATO wants us to do, and what we want to do. After all, we do this to protect ourselves.”

When the Standard, an off-campus student housing complex, opened in the fall in Bloomington, Indiana, and welcomed its first class of residents, there was a distinctly resort atmosphere. In addition to the requisite pool and fitness centers, it also attracted students with two pickleball courts, a dog park and an exercise sports simulator. The complex even used an app to match roommates.

The arms race for facilities in student housing is nothing new, but what is striking about the Standard is its size: 1,000 beds, about twice the size of a typical student house. In fact, the Standard could house 3 percent of Indiana University's more than 34,000 students.

Off-campus student housing complexes across the country are growing larger, some housing more than 1,500 students, and they're being built on prime lots as close to campus as possible, as developers try to better manage their bottom lines.

“Larger projects allow us to have more amenities because we can spread the cost over a larger number of beds,” said J. Wesley Rogers, CEO of Landmark Properties, the developer of standard complexes in 23 states, including Indiana.

But developers face challenges, including higher land costs near campus and the possibility of declining college enrollment.

The move toward larger complexes comes as the industry sheds its image as a niche business run by local landlords and instead attracts more institutional and global investors, said Dave Borsos, vice president of capital markets for National Multifamily. Washington Housing Council. The two largest international investors in the market now are the Abu Dhabi Investment Authority and Global Student Accommodation, a property management company in London.

Bigger investors bring more scrutiny. “The industry is demanding a different level of expectations in terms of efficiency and management,” Mr Borsos said.

One strategy is to fit more students into less space. Some units at the Standard have five bedrooms, a trend Mr Borsos has seen become more popular as developers try to build in more beds.

Despite the tighter rooms, more beds mean lower rent for each roommate. And larger developments also provide more luxurious perks, such as yoga studios, climbing walls and fire pits.

Landmark's largest student housing development is the Standard in Seattle, which opened on September 22 next to the University of Washington. It features two high-rise towers and a mid-rise building, which together will house 1,545 students. The university, which has more than 34,000 students, does not require freshmen to live on campus, as many universities do, making the pool of available residents larger than elsewhere.

The shift to “bigger is better” has accelerated, Mr. Borsos said. Even a few years ago, he would hardly have imagined a complex with 1,500 beds. For a while in the early 2000s, developers gambled that students would trade a longer commute for better amenities and more spacious accommodations. Clusters of students lived in parts of cities that were not always part of the university community and used shuttle buses to commute to campus.

But now developers can fetch higher rents with properties closer to campus, providing a greater return on their initial investment, which can be high. The cost per bed in a residential complex one-half mile or less from campus is $131,244, which is about 77 percent more than student housing farther than two miles from campus.

The higher returns have attracted other developers, who are rushing to campuses with massive developments. Cranes are part of the skyline around the University of Texas at Austin, and construction is underway along the edge of Purdue University in West Lafayette, Indiana.

Core Spaces, which builds off-campus student housing, is embracing bigger and closer. Dan Goldberg, the president of Core Spaces, said there had been “a proliferation of purpose-built housing further and further away from campus,” but that the trend had peaked. The company has since transitioned. “We normally build high-rise buildings of fifteen to twenty floors as close to the campus as possible,” he says.

But securing land near campus is often expensive and subject to local zoning regulations. Projects can take years to get off the ground. Despite the challenges, Mr. Goldberg believes “closer to campus” will outlast other trends.

“We saw competitors building bizarre facilities” such as arcades and movie theaters, he said. “What we have discovered over the past five years, what students want, is more well-being, more fitness, more study space and good WiFi.”

But the most desirable amenity is proximity. “Students want to be able to roll out of bed and go to class,” he said.

Core Spaces has developed campus-edge housing in dozens of cities across the United States. For example, the company's Hub on Campus brand extends from the University of California to the University of Florida. The largest, with more than 1,500 beds, is near the Virginia Tech campus in Blacksburg, Virginia.

The developer hub in Champaign, Illinois, opened in 2021 a block away from the University of Illinois Urbana-Champaign and catered to students by offering a rooftop sundeck and pool, a barbecue area and a fitness center with a sauna. Upgrades include smart TVs, memory foam mattresses and sound systems.

The company has additional major developments in the pipeline, including several with more than 2,000 beds in Knoxville, Tennessee; Raleigh, NC; and Berkeley, California. The largest project will be adjacent to Clemson University in Clemson, SC, with more than 2,300 beds. And Mr. Goldberg said he would not rule out the development of even larger complexes.

“We do not put a limit on the size of buildings,” he said, adding that developments are carefully vetted because they depend on market demand.

Still, the move toward larger developments may have its limits, says Jaclyn G. Fitts, executive vice president and co-leader of the national student housing team at CBRE, a real estate services firm.

To fill larger facilities, developers face a daunting “capture rate,” or the percentage their developments appear to fill of the number of students available for off-campus housing, she said. Traditionally, developers aim for a capture rate of 2 to 3 percent, which is high enough to make a profit but low enough to limit exposure if the economy sours and demand declines.

Ms. Fitts sees the sweet spot for off-campus development settling in the 400 to 600 bed range as these are more realistic to fill. “You need to know that there is a demand to fill your homes,” she said. “The economy has to work.”

But Landmark's Mr. Rogers said a 6 to 7 percent capture rate made economic sense “depending on market dynamics.”

The urge to go big could come back to haunt developers, says Anne P. Villamil, an economics professor at the University of Iowa. They may be counting on an endless supply of students, but Ms. Villamil pointed to studies showing that demographic shifts would result in a substantial decline in student enrollment starting in 2025, a trend some call the “enrollment cliff.”

She predicts that fewer students will mean “survival of the fittest” among the apartment complexes that could sit vacant if they can't compete.

“We have been in such a period of uncertainty with all the shocks that have hit the economy, but this is another shock that is clearly coming,” Ms. Villamil said.

However, Mr Borsos said he had seen the same studies and predicted a more modest decline. “Larger public universities will continue to receive far more applications than they can process,” he said.

Will the complex with 2,500 beds become commonplace? “If a developer has access to land at a university and thinks there is enough capacity to fill something bigger, they can,” he said.