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Trump: Stock market crash if impeached, market response last 2 sagas



trump stock market traderDrew Angerer/Getty Images

  • President Donald Trump was directly implicated in
    federal crimes this week. 
  • Analysts see a heightened chance of
  • Past impeachment proceedings suggest the market may be
    able to weather the storm.

After President Donald Trump was
directly implicated in federal crimes
this week, some are
considering what an impeachment might look like — even the Oval
Office holder himself.

“If I ever got impeached, I think the market would crash,”

he said on Fox News
. “I think everybody would be very poor.
Because without this thinking, you would see, you would see
numbers that you wouldn’t believe in reverse.”

History suggests maybe not. JP Morgan strategist John Normand
sees much of the market activity during impeachment proceedings
against former President Richard Nixon and former President Bill
Clinton as “tough to disentangle” from other events of the times.

(No US president has actually been removed from office through
such a process. Nixon resigned before the House took an
impeachment vote. The Senate, which requires a two-thirds
majority, ultimately acquitted Clinton of all charges.)

Six months before Nixon resigned (Aug. 8,

“These were extraordinary times, however, with or without
domestic politics,” Normand noted.

It was the start of 1970’s energy crisis, which partly pushed the
economy into years of stagflation and a sell-off in equities and
bonds. The Bretton
Woods era
of fixed exchange rates was also coming to an end.
Nixon suspended gold convertibility and devalued the

Screen Shot 2018 08 23 at 10.59.23 AM

JP Morgan

Two months before Clinton was acquitted by the Senate
(Feb. 13, 1999): 

Screen Shot 2018 08 23 at 10.58.25 AM

JP Morgan

Normand called the Clinton impeachment proceedings “almost a
non-event.” He noted equity and credit markets had already been
hit by the
Asian financial crisis
, the Russian
and the
collapse of Long-Term Capital Management
. And the
interest-rate outlook firmed as the economy rebounded from an
emerging market drag.

“And somewhat similar to today, the secular boom in dot-com
stocks, which in turn drove the cross-border capital flows
supporting the dollar in the late 1990s, was not White
House-dependent,” he said.

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