Policy, Politics, Potential - There's Much More to This Week Than Meets the Eye - Top 3 Takeaways – August 31st, 2026
Takeaway #1: Policy & Mentality
On the surface, this is likely one of those weeks where you start out thinking about a couple of different things. Today it's probably along the lines of how the heck is it already the end of August? And right next to that line of thinking about how time only ever seems to move faster. Btw, this phenomenon - the feeling that time goes faster over time, is something that's been consistently studied at every age between 16-80. Effectively, during early development the way we, our brains, tend to interpret life though the limited life experience we've had, makes those years feel longer than after we've begun to process the bigger picture. The addition of life milestones and landmarks with time only adds to this dynamic because when you're young – what happened a year ago is a long time in the duration of time you've been on the planet while that only dilutes with time to where eventually our brains might associate what happened a decade ago the way our brains once interpreted what happened a year ago. The scientific community refers to this effect as Ratio Theory. But anyway, enough about that...although seriously - how is it the end of August already? But the next thought that probably comes to mind for most is what you might have planned (or not planned) for Labor Day weekend. That's the way our minds tend to work – what's the next thing that we either can look forward to or need to do that's not part of the ordinary. This dynamic will play into my second takeaway today but first let me dive into why this week is potentially more significant from a policy perspective than any other week since the third week in the Iran war – when I indicated that week would be the defining week for President Trump's credibility in being able to deliver on his guidance that the entire conflict would wrap up in six weeks. That week back in March didn't go the way Trump indicated it would and rather than a six-week war here we are without resolution six months later. Independent of trade objectives and big picture Greenland related things, there are currently three foreign policy objectives President Trump wants resolution on ASAP that would serve the country well and his party politically. 1) Iran, and specifically the Strait of Hormuz 2) Cuba, and specifically the end of the legacy Castro regime 3) Long-term lower priced energy and stability. While the third is significantly connected to the first, it's not entirely reliant on it and that takes us to the reason this week in particular is so important for President Trump and his policy generally.
Takeaway #2: Politics
As part of the Midterm Election Update I've updated every several weeks throughout the course of this year's election season, I've shared a few factoids that have proven to be historically significant. First, the party opposite of the president's party has won 93% of midterm election cycles historically...since the advent of the polling age in the 1930's, whatever party has had a generic ballot lead on Election Day has fared best overall nationally in that midterm cycle – without fail...and the other comes down to timing. While the party favored on the generic ballot has proven to be 100% accurate historically, there's another timeline attached to it. Whatever party that's been favored on the generic ballot entering September has held that advantage through Election Day. You'll often hear political analysts say that it's after Labor Day that most voters really begin to pay attention to candidates, politics and form their opinion about how they intend to vote. In my view that's a bit of an oversimplification these days... because in the age of 24/7 news and information everywhere all of the time it's likely most voters have opinions on the candidates involved in high profile races before the final two months of the election season. Nevertheless – back to where I started with human psychology...just as most people enter this week thinking about what lies ahead Labor Day Weekend, what comes next after Labor Day Weekend, is often the first thoughts and planning for the holidays to come. And it's around those thoughts that if potentially persuadable voters (and there are fewer of them than ever before too) are unhappy with the direction of things they form their opinion on how they intend to vote generally. That's what makes this week in particular so important in terms of policy and timing if you're President Trump and more broadly the Republican Party. President Trump's approval rating remains meaningfully underwater and the Democrat's RCP advantage on the generic ballot, at over 6-points, is sitting just below wave election territory. The bottom line is that if Republicans in competitive races are to have a fighting chance, this week is go-time geopolitically for Team Trump...so about that...
Takeaway #3: Potential
At this point I think many of us are inclined to believe that Charlie Brown is going to be able to kick that football before Iran truly becomes a reliable partner in a negotiated end to the current conflict that results in a reopened Strait of Hormuz...however there has been movement and there are reasons for tempered optimism heading into the week. President Trump's announcement of a historic oil deal with Venezuela Friday night isn't the type of thing to bring significantly more oil into the market immediately, however it's a huge development in the big picture. The United States secured a 25-year deal with majority control of the world's largest proven oil reserves – effectively doubling U.S. reserve capacity. Private investment, led by Chevron, will overhaul 17-Vennezualian oil fields that will increase daily oil capacity by 1.5 million barrels. For perspective, prior to the Iran war – Iran's daily average oil exports were 1.68 million barrels. Basically, what's been announced here fully replaces Iran's supply in the global energy markets, and of course massive bonus, it'll all be coming to the U.S. This is a massive macro catalyst for lower oil prices and stability. As I've said right along when talking about Iran...if it weren't for the price of oil and thus gas prices being elevated, the average American wouldn't care about what is or isn't happening over there in the day-to-day. Lower long-term supply risk helps to derisk longer-term oil futures. The next news over the weekend was that whatever Iran and Oman negotiated together as part of a permanent Strait of Hormuz operating plan had been finalized and word by Saturday from the Iranian foreign minister was that Iran was ready to negotiate with the U.S. again stating: Despite the existing political atmosphere and pressures, the path of dialogue and engagement based on mutual respect is still being pursued, putting diplomacy back on track isn't impossible. Iranian officials suggested revisiting the MOU over the weekend. And while Iran can't be trusted with anything generally...there is this. Word that the financial crisis has become so bad in Iran that they're not able to plant crops and manage their agricultural industry. As I've noted, you can be a 12th Imaming Islamic Terrorist, as the Iranian mullahs and Supreme Leader happening to be...however you still need money to do terroristic things. Add food to that list of essentials too...and if Iran is reaching motivation not just for money but also for food...that could hold the potential to move the needle sooner than later. President Trump is motivated...and they are too. And above and beyond the October surprise Trump would like to deliver this year is an end to the conflict and the successful end of the Castro regime in Cuba. Just as Venezuela was a massive success to start the year, Cuba would be the massive success to end the year/election cycle of what became a geopolitical mess with Iran. Who knows what exactly happens from here...however history says this week will be defining politically...one way or another.