The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

Not Surprising ?

08/23/2018

The President said the stock market would crash if he was impeached.

The stock market hates surprises.  If he was suddenly impeached, the stock market would drop suddenly and scarily, maybe even crash.  But, it is inconceivable the Democrats take the House, form committees and take votes in the dark without anybody knowing.  His impeachment will not surprise anyone.

I expect the market to drift down slightly until the impeachment vote in the House but then begin to rally as investors realize it will be virtually impossible for the Senate to convict him.  This is similar to the market’s behavior during the Clinton impeachment.

It will be more diffficult to predict the market’s behavior if the President suddenly resigned, being replaced by the Vice President — what do you think?

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