Unintended Consequences from an Unstable President
Author: Greg Valliere
January 8, 2020
“ALL IS WELL,” Donald Trump proclaimed last night, and the apparent lack of casualties offered hope that this crisis can be defused. But all is not well. Unintended consequences abound in this uneasy city:
Trump’s impulsiveness and lack of any clear strategy has shaken his allies and many Republicans on Capitol Hill.
This crisis highlights Trump’s very thin and inexperienced inner circle; he’s on his fourth national security director.
Is Trump an isolationist or an interventionist? He has flipped with dizzying speed, reacting to Fox TV criticism.
A consequence of this crisis will be the eventual ouster of the U.S. from Iraq.
Into the vacuum — Russia, and of course the government in Iran, which was teetering just a month ago.
An unintended consequence of last night’s minor damage: the focus will shift to cyberwarfare.
Isolated: Virtually all U.S. allies are opposed to the Soleimani killing; even Israel is maintaining a low profile.
Saudi Arabia doesn’t want to get involved; its isolation and weakness has been exposed again.
Trump has resurrected the antiwar movement in the U.S., led by the suddenly resurgent Bernie Sanders.
Still another huge spike in defense spending is coming; the overall deficit is headed sharply higher.
Can’t overlook a major positive: the U.S. is energy self-sufficient — an exporter unlike, notably, China.
THE MARKET IMPACT: The financial markets march to a different beat. The markets are about earnings, interest rates, the economy. The markets can live through this, assuming the hostilities wind down soon.
BUT EVEN IF THIS WINDS DOWN, many of the unintended consequences we listed above will prevail, and they’re mostly negative — especially on Capitol Hill, where an increasingly large percentage of Republicans say in private that Trump is more than just ignorant on policy; he’s increasingly unstable.
THAT MAY BE THE MOST DISTURBING unintended consequence of all — Trump’s temperament is a growing concern. Don’t believe us? Ask Jim Mattis, Rex Tillerson, H.R. McMaster, Reince Priebus, Gary Cohn — and, of course, John Bolton.
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.