Stocks opened lower this morning amid ongoing political drama in Washington. The election’s over and Democrats have their man – Joe Biden – set to take to the Oval Office.
But, apparently, that isn’t enough. Democrats now want President Trump impeached for inciting a riot at the Capitol Building. Ironically, many of the same lawmakers pointing the finger at Trump once publicly called for civil disobedience.
House Speaker Nancy Pelosi, who’s spearheading the impeachment proceedings, said earlier in the year that she “[didn’t] know why there aren’t uprisings all over the country” when the BLM protests, which lead to riots that caused billions of dollars in damage and several deaths, first began.
Rep. Maxine Waters, another Democrat in favor of impeaching Trump, told protestors to harass members of Trump’s cabinet any time they were seen in public.
Trump’s great sin was tweeting “be there, will be wild!” in an attempt to organize a protest against the election results.
Pot, meet kettle.
At this point, though, it doesn’t matter what the President or any other politician did. America’s bitterly tribal political system has no room for critical thinking when it comes to punishing the opposition. Rhode Island Democrat and article of impeachment co-author Rep. David Cicilline told the Washington Post that Congress “[has] the votes.”
“There’s no doubt about that,” Cicilline added.
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Ahead of the impeachment proceedings, Pelosi is expected to ask the House to vote on a resolution that would call on Vice President Mike Pence to remove Trump via the 25th Amendment.
And while that all seems like a bit of a formality, seeing as he won’t be president much longer, it could represent another hidden danger. If Trump’s impeached, he won’t be allowed to run again in 2024. His secret service detail – something ex-Presidents get for life – will be removed.
That’ll be a tough pill for Trump supporters to swallow, given that numerous Hollywood celebrities have said in the past that they wanted to kill him. Madonna remarked that she “thought an awful lot about blowing up the White House.” Johnny Depp asked a crowd “when was the last time an actor assassinated a president?”
CNBC commentators have provided similarly violent soundbites as well over the years. “Where is John Wilkes Boothe when you need him?” asked one. “They’re still going to have to go out and put a bullet in Donald Trump,” said another.
Words weren’t enough for some, though. Comedian and actress Kathy Griffin held up a bloody, decapitated model of Trump’s head as an artistic statement in 2017. Rapper Calvin Cordozar Broadus Jr., A.KA. “Snoop Dogg,” shot a Trump lookalike in one of his music videos.
Does it surprise you that his supporters are worried about Trump’s safety after he leaves the White House?
A series of right-wing protests could easily follow a Trump impeachment, escalating the war between conservatives and liberals to an even more venomous place.
The market won’t like it. Increased political instability represents uncertainty, and with so much already up in the air – interest rates, Covid-19, an economic recovery – stocks could crumple.
The number of market pressures has only gone up over time, and to many strategists, that’s reason to be very cautious in 2021.
“I think the probability of a smooth year for markets is rescinding,” wrote Jim Reid, chief credit strategist at Deutsche Bank.
“The biggest risks that I outlined in my 2021 outlook have probably intensified in the first week of the year. They were there being a yield shock/taper tantrum at some point and there being a tech bubble that bursts.”
Reid continued, adding:
“It would be difficult to go too much higher without serious talk of tapering and the more immediate pricing in of the first hike of the cycle.”
Treasury yields could spike like they did in 2013, back when the Fed said it would taper bond purchases. If the Fed indicates that it’s reducing liquidity again, the bond market should react in a similar manner.
Aggressive fiscal policy, which the Biden administration seems likely to use, could quickly raise rates as well. Bulls don’t take kindly to that kind of bond behavior.
“These are not normal markets!” Reid warned.
“Ride the liquidity for now but these do not feel like the ingredients for a low [volume] market year.”
In other words, Reid expects heightened volatility. He’ll probably be proven right, too. Bitcoin’s rapid 22% plunge over the last day and a half could be the first asset of many to see a sudden drop.
The next one to fall is anyone’s guess. But equities, in general, seem ripe for an epic short-term plunge.
Especially sky-high tech stocks, which absolutely zoomed through most of 2020.