All-Out Political War and Markets

It ain't nothing but a heart breaker
Friend only to the undertaker
It's an enemy to all mankind
The point of war blows my mind
--Edwin Starr

Fleck avoids politics in his daily commentary except when he sees politics as influencing market movements. Recently on Ask Fleck, a well-regarded contributor affectionately known as 'Mr Skin' shared his assessment of the Washington turmoil and its potential effect on markets. In response to several reader comments about the the post, Fleck posted his own missive yesterday.

I want to reproduce it in its entirety because Fleck captures what he terms the 'all-out' political war and its prospective impact on markets well, I think.

"Several people commented on [Mr Skin's] views on the Trump witch hunt (most favorable, but some not). However, I'm only posting this one so that I can clarify what I think the big point is that Mr Skin was making, that being the all-out warfare now underway.

"First, Trump has flaws, plenty of them. That isn't new news. What is new is the near hysteria from the MSM (and many politicians) about virtually anything he does (e.g., many Democrats and Republicans said Comey should go, due to what he did during the election campaign, and now most of those same people are defending him because Trump canned him, in their mind, for the wrong reason). But, the fact is, it almost doesn't matter WHAT he does. This group of people is against it, period.

"Second, Trump is a thin-skinned egomaniac and that will continue to cause problems. BUT, even given his flaws, he should at least get a fair shake on news items. Yet he does NOT (which of course gets him even madder). People who hate him feel like he couldn't possibly have beaten Hillary without somehow 'cheating' (i.e., the Russians stole the election) and they are mad as hell and want revenge, when in fact he beat the Republicans, Hillary, and the MSM because the so-called silent majority was fed up with how the country has been run.

"Now, WHY this matters is because the market ran up to the moon on hopes he would accomplish things that he could never have achieved even if he were a saint (which he ain't), but the absolute hatred on the part of the Democrats, MSM, some Republicans and the GOVERNMENT BUREAUCRACY means that he will be lucky to get any meaningful legislation passed for quite some time, if ever. At some point, the market will have to adjust to reality (and it will tank) and then maybe some people will see that the economy sucks. Of course, Trump will lose it even more when he gets blamed for all of that, too.

"So, this bit of politics looks like it will matter to markets, potentially in a big way, which is why I am addressing it. This could become a very big deal, as an all-out war among these various groups, which is what is taking place, is not only NOT bullish, it is very bearish, period."