Displaying items by tag: Trump

(Washington)

It would be an understatement to say that a lot is riding on the midterms. Control of Congress is at stake, and within it, the whole policy agenda of the country. The stakes are even higher because of how politically divided the country is. Many think the Democrats will take the house but lose the Senate, resulting in a split Congress. This puts many investors at ease because it could block some of the right’s more extreme impulses (such as those against free trade). However, there is reason to worry that Republicans might fare far worse. That reason is that Donald Trump is the most unpopular president ever in such a buoyant economy. According to one polling expert, “There’s a huge disconnect … The economy doesn’t seem to be dominating in a way that it often does in elections”.

FINSUM: Our worry for the Republicans is that Trump is making the midterms more about himself than the party, and given the high degree of disapproval, that approach could really end up costing Republicans in the midterms. Consider an all-blue Congress come November a considerable tail risk.

(New York)

Ever since the now infamous “op-ed” about Trump’s inner circle appeared in the New York Times earlier this week, there has been increasing discussion of the 25th amendment, so we thought it would be good to give a quick primer on it. Basically what the amendment allows for is a president’s cabinet to remove them from office if they are deemed “unable to discharge the powers and duties” of the office. The vice president and a majority of the cabinet need to agree in order to remove the president. But if the president protests, it takes a 2/3 majority in Congress to remove the head of state. It has never been used to remove a president and was only ratified in 1963.

FINSUM: Given the likelihood that Trump would protest any move, a 2/3 majority in Congress seems like a massive obstacle for anyone trying to remove the president.

(New York)

Bloomberg has reported that prosecutors from the Southern District of New York have effectively declared war on the president. In the last week it became clear that Michael Cohen had accepted a guilty plea and given testimony incriminating Trump and that prosecutors had offered immunity to Trump’s CFO Weisselberg. In the words on Bloomberg, “Once the Southern District gets its jaws onto a string of crimes, it doesn’t let go”. Weisselberg will likely be required to give information on all criminal activity he knows about, which could pose problems for Trump both personally and in terms of the presidency.

FINSUM: It seems like there is a veritable army of prosecutors and investigators going after Trump right now. It may all not amount to much, but we would expect more turbulence and fireworks.

(New York)

Even if you aren’t thinking about it yet, the president is. In an interview yesterday, President Trump said that the stock market would crash if he were impeached. No one can be sure, but history suggests it would have little impact on the market. In the two previous cases in recent memory—Nixon and Clinton—the market behaved differently, falling sharply in the 12 months prior to Nixon’s impeachment, and rising before Clinton’s. JP Morgan’s best guess is that an impeachment wouldn’t be enough to derail the markets and economy itself.

FINSUM: Another interesting argument is that Trump wouldn’t ever be impeached until the market headed south, as that has happened in both of the previous instances (there was a brief but steep correction before Clinton’s impeachment). Nonetheless, we really don’t think Trump will be impeached.

(Washington)

Yesterday was a rough one for the President. Michael Cohen’s guilty plea, and testimony that he was order to pay two women by Trump using campaign finances caused yet another firestorm for the White House. Trump responded strongly, admitting that he knew of the payments, but denying that they came out of campaign finances, saying he paid for them personally. Lawyers say it will be hard to use Cohen’s testimony to bring charges against Trump. However, Cohen’s lawyer says that his client can also testify that Trump was aware of Russian efforts to interfere with the election before such information was ever reported publicly.

FINSUM: We do not think the campaign finance situation will imperil Trump, but that last statement about Russia is a real x factor which could cause serious trouble.