by Greg Valliere, AGF Management Ltd.
Insights and Market Perspectives
Author: Greg Valliere
October 22, 2019
WE TALKED YESTERDAY with two partisans — one a liberal Democrat, the other a pro-Trump conservative — and came away with the following conclusion: there simply aren’t enough votes to convict Trump in the Senate, but the president’s increasingly erratic behavior makes him vulnerable in the general election, which is the Democrats’ ultimate goal.
BOTH OF OUR FRIENDS AGREED ON THREE POINTS:
First, the standard for impeachment and conviction — “high crimes and misdemeanors” — is a very high bar to clear, and at present there are no more than four or five Republicans in the Senate who might defect and vote to convict; at least 20 defectors will be required to oust Trump.
Second, Republicans in Congress are sick of defending Trump, which has made him furious; Mitt Romney is Trump’s poster boy for disloyalty, but there are other Republicans who were outraged when Trump abandoned the Kurds and proposed hosting the G-7 summit in his hotel.
Third, Trump fatigue is growing — not among Trump’s base but among moderate suburbanites, where the election will be won. This key demographic doesn’t want a lengthy impeachment process (and it’s now looking longer than expected, lasting well past Christmas).
SO WHICH SCENARIO WILL DOMINATE: An electorate that grows weary of the trial and the inevitable paralysis on issues like the budget? Or a mountain of evidence that may not convict Trump but will make him damaged goods in the election? The great unknown: are there more disclosures to come? White House insiders fear John Bolton’s book will be devastating.
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THE CANADIAN ELECTION: Headlines in the U.S. this morning highlighted Justin Trudeau’s “victory,” but it was noting to write home about. His Liberal Party actually lost the popular vote by about 2%, winning just 33% of the total vote. Trudeau lost about 20 seats in Parliament, where his Liberal Party will have about 156 seats to 122 for the Conservatives; 170 are needed for a majority.
SO TRUDEAU WILL BE ON A SHORT LEASH, dependent on bargaining with the New Democrats, the Greens and the resurgent Bloc Quebecois. The election was particularly disappointing in Alberta, where the slumping energy industry needs more oil and gas pipelines. But with Trudeau dependent on the left to get much done, it’s difficult to see anything good coming for Canadian energy producers.
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CORRECTION: We wrote yesterday that several second tier Democrats may have to drop out soon because they’re polling around 3% or lower. We included Kamala Harris in that category, but in the Real Clear Politics national average she’s at 5.6%. In Iowa, where Pete Buttigieg suddenly is surging, Harris is at 3.3%.
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