Impeachment Fever in Washington; Warren Fever in Iowa
Author: Greg Valliere
September 23, 2019
INFLECTION POINT: A rebellion by Democrats against Nancy Pelosi is increasingly likely, as the House of Representatives lurches toward impeachment. The catalyst is President Trump’s phone call with Ukranian President Volodymyr Zelensky, which has outraged all Democrats — and, notably, some Republicans as well.
IS TRUMP INVINCIBLE? He surely thinks he has two coats of armour: first, the apparent inability to indict a sitting president; and second, enough GOP support in the Senate avoid conviction. So, incredibly, within days of Robert Mueller’s limp testimony, Trump felt emboldened to badger Zelensky. The key issue: did Trump threaten to withhold military aid unless Ukraine investigated Joe Biden?
TRUMP SAID THIS WEEKEND that he would consider releasing the tape of his conversation with the Ukrainian leader, but we’re skeptical, to put it mildly, that he will. Trump is a master at dragging these proceedings out, stonewalling, while he and his surrogates blast away at a “witch hunt.”
PELOSI HAS TO DO SOMETHING: She hinted at an escalation this weekend, and sources report that Democrats may pursue a 100-year-old law called an “inherent contempt authority” that allows Congress to jail or fine people who ignore subpoenas (which countless White House officials have done in recent months).
SO HERE WE GO AGAIN, with the prospect of more leaks and more speculation about impeachment. There’s only one potential game changer in this upcoming narrative: could Republicans in Congress finally say “enough is enough?” Mitt Romney and a handful of others did this weekend, but are there 67 votes in the Senate to convict in a trial? Nope, which is why Pelosi prefers to defeat Trump at the ballot box instead of giving him an excuse to claim that he’s being hounded by pro-impeachment leftists.
COULD ALL OF THIS AFFECT THE MARKETS? Unlikely — after all, Mueller never did. What could affect the markets, however, is what we have warned about for months: the growing possibility that Elizabeth Warren may be the Democrats’ nominee. (Randy Forsyth, writing this weekend in Barrons, described the potential negatives for investors if Warren wins the nomination.)
ALMOST ON CUE, JOE BIDEN has lost his lead in Iowa. This weekend’s CNN-Des Moines Register poll showed Warren with 22%, Biden 20% and Bernie Sanders slipping badly to 11%. Not only does Biden have to worry about Warren, there’s been some signs of life from Pete Buttigieg and Amy Klobochar, who are elbowing him in the center lane.
BIDEN AND UKRAINE — HOW DOES IT PLAY OUT? We talked this weekend with a strategist who nicely synthesized the two narratives for Biden. First, he could benefit from a wave of sympathy (among Democrats), and an angry Biden response might allay concerns about his energy. Or second, he’s now bogged down in an endless — and confusing — war of words with Trump and Rudy Guiliani, which might convince some voters that Biden is simply too controversial to elect.
THE ULTIMATE IRONY: Trump is going after the wrong opponent. His scorched earth assault on Biden comes as the former vice president is slipping into second place in the fight to win the nomination. Warren is the candidate Trump needs to worry about; simply calling her “Pocahontas” will not be sufficient to stop her momentum.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
©2021 AGF Management Limited. All rights reserved.