Hey there, hope you had a great week. We’re 11 days away from a midterm election in which voters are concerned about artificial intelligence data centers in their back yard, and affordability issues felt nationwide.

The high cost of housing, cars, healthcare and just about everything else has consumer sentiment near an all-time low. We’ll get into it below, but first let’s look at an unexpected way AI is shaping the midterms: Candidates are trying to teach bots who they are. — Tony Wagner, newsletter editor

In a world where artificial intelligence is moving deeper into public spaces of democracy, campaigns are learning that they also have to think about what voters' chatbots are saying.

Jordan Haines, chief technology officer at Run for Something , a liberal-leaning organization that encourages people to try their hand at seeking office, said candidates have the power to shape what the AI chatbots say about them.

“I’d say an immense amount of control, more control than they realize,” Haines said.

He leads a team that built a system called CampSight that helps candidates track what the large language model chatbots are saying about them. In some cases, the answer is very little.

“When voters were asking, ‘What is this race? What does this position do?’ often the LLMs were just not sure and saying it wasn’t a real office,” Haines said.

For instance, Haines worked with a candidate in the Denver area who ran this year for what ballots labeled the Regional Transit District Board of Directors. The CampSight system found that when people inquired, the chatbots seemed baffled. Among solutions: the Colorado candidate clued in the AI by posting his profile on the respected election information website Ballotpedia.

“He went so far as to get Ballotpedia profiles for himself and his opponents, just so that Ballotpedia would list his race,” Haines said.

In other words, the candidate went to his opponents in the race and said, in effect: We all have to put some stuff on Ballotpedia, otherwise the AI chatbot doesn’t know it’s a race.

The housing industry got a whole heap of bad news this week.

Housing starts, which are a measure of new construction, plunged in September and were down 7.4% year-on-year. Meanwhile, pending home sales dropped to their lowest level since 2001.

Higher mortgage interest rates are to blame for the cratering numbers. The average rate for a 30-year fixed-rate loan is just shy of 7.5%. But that happens to be lower than the average mortgage rate since 1971, which is about 7.67%.

Yet those rates, high by today's standards, didn't lead to a housing affordability crisis like today's. What gives?

In the early ‘90s, Craig Richardson bought his first home for $68,000. “Yeah, my first mortgage rate was 7%,” he said.

Growing up, his parents paid 15%. So his rate felt low. Richardson, who’s an economist at Winston-Salem State University, said if you’re only 30? “You've lived an entire adult life with low interest rates of 2% to 3%.”

That describes Realtor.com economist Hannah Jones. "I am one of the millennials who's like, ‘OK, well, my starter home is going to have to be my forever home.’”

And it’s not just because interest rates are higher. “Home prices have grown much, much faster than incomes,” Jones said.

Here’s the thing about cars: “Most vehicles will depreciate as soon as you drive them off the lot,” said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions.

If you take out a loan to get that new Chevy Silverado or Subaru Forester, you will likely owe more than the car is worth for a while. If you then go trade it in for a new car in just a few years, you could have negative equity, which rolls into your next auto loan.

“It's just a snowball effect that keeps this debt rolling from generation to generation of vehicle,” Fiorani said.

The fact that about a third of trade-ins have negative equity is not new. That share dropped for a few years, but it was at a similar level pre-pandemic.

What’s different is the amount of auto debt underwater buyers are taking on. They’re borrowing 44% more than they were in 2019, said Jessica Caldwell, head of insights at Edmunds. That’s because they’re carrying more negative equity and interest rates, and car prices are higher.

“That all combined makes a pretty unfavorable monthly payment for these folks with negative equity,” she said.

This is the lead-off track from “Mirror Mix,” the second compilation album from e.l.f. Cosmetics.

The beauty brand isn’t the only company putting out music right now. Wendy's recently dropped “Songs to Listen to in a Wendy's Parking Lot,” and Blue Bottle Coffee released a contemporary jazz record on vinyl.

Why? It’s a way for companies to reach audiences where they are, on streaming apps, and position their brand as part of a lifestyle. Coca-Cola and Cash App have stood up record labels in the past, Trapital CEO Dan Runcie told us, and a decade ago Hamburger Helper released a whole parody rap album about its convenience foods. 

Does original music actually sell more lip gloss and Frostys? It’s hard to prove causality, Runcie said.

“I think the ROI is still TBD on a lot of these projects,” he said.