Form-Based Codes 101 examines case studies of form-based codes in downtown contexts.
Stamped from the Beginning: @DrIbram on the History of Racist Ideas in U.S.
Faecal bacteria in ice in Costa, Starbucks and Caffe Nero
How the #UK election could re-shape #Brexit...
GS turned bullish WTI #OOTT
Poll: Just 17 percent support Senate GOP ObamaCare repeal bill
Five tips to remember for #MachineLearning #fintech @Enterprisei #AI
Admittedly, thats a very low bar.
Looking for a real soul connection? You can never ask enough questions @Ecochickie
Scientists brace for climate-fund cutoff From @ivansemeniuk
Incompetent Teachers Face Demotion, Dismissal: #Uganda
Hanging out at Hellfest
Suppliers Take Nakumatt to Court Over Debt: #EastAfrica
Govt Eyeing Cluster Centers to Fast Track Industrialization: #Ethiopia
#NotInMyName – Indians protest vigilante attacks on Muslims
Why have we had to rely on hackers to stop catastrophic ransomware again? asks @jm_stout
Will CNN learn from its mistakes? Prepare to be disappointed
#Venezuela’s supreme court attacked with grenades from police helicopter
Finance squeeze hits Afghan mine clearers
Florida wildfire cuts interstate highway
Evicted Tenant Leaves Boxes of Tarantulas Behind
Rate-cutting race among BRICS outliers rits Russia versus Brazil
Spicer will headline a GOP fundraiser in Rhode Island
.@USATODAY gets woke, discovers capitalism.
BOFI Federal Savings: Disclosing Little, And Saying Less $
Ex-police chiefs charged over UKs 1989 Hillsborough stadium disaster that killed 96:
This is how blockchains could revolutionize international aid:
Opposition Manifesto Promises Higher Wages for Kenyans #Kenya
The New York subways success is causing it to fail
Paddington Bear creator Michael Bond dies at 91 From @GlobeBooks
Minister Samuel Moncada We will capture him and bring him to justice.
Is social mobility beyond the government’s control?
May signals UK public-sector pay may rise ahead of key vote via @TimRoss_1
If Americas 55 million Latinos were a country, it would be the worlds 7th-largest economy:
SIGN UP to receive a free daily digest of best in energy news + my research notes by emailing john.kemp@tr.com
Why the conservative gainsaying of Medicaid’s effectiveness is so infuriating.
German audience laughs and cheers after Trump Cabinet members speech cut off
Japans JXTG settles Q2 #HSFO price 6.2% lower from Q1 on weaker #oil price. Full story
Minister Samuel Moncada We will capture him and bring him to justice.
Fresh cyberattack likely ‘more sophisticated’ than WannaCry: Europol
Stamped from the Beginning: Ibram X. Kendi on the History of Racist Ideas in U.S.
Meat processor cuts deal with ABC in pink slime defamation case
A Look at Uncertainty in the UK, Post-Election | Daniel Lacalle
@mises
The WOKEST take on Goldilocks youll see today
Democrats have hired Raffi Krikorian, a former Uber exec, as their chief technology officer
Grenades dropped from helicopter on Venezuela’s Supreme Court building
Learners Allegedly Strip Searched for Cheat Notes - Opposition Party: #SouthAfrica
Trump’s lawyers will postpone filing a complaint against Comey with DOJ, source says
CFTC Chief Asks Congress for More Money to Oversee Blockchain
Pakistan issues landmark transgender passport; fight for rights goes on
NSA spying scandal committee presents controversial final report
Obama received much higher ratings at the end of his presidency than Trump gets today
Por vezes ainda me surpreende que estejamos só agora a resolver enormidades deste calibre (do @JNegocios de hoje)
Yemen: Worlds worst cholera outbreak mapped
When trying to survive while homeless is made illegal
The Mathematics of Machine Learning #machinelearning #mathematics
What is lost when teachers cant afford to live near students? asks Andrew Simmons
CNN launching new brand featuring Chris Cillizza
US Recreation Index for June: 78.2, previous: 77.3 (change: 1.1%) #WPI
Beijing is weakening Hong Kongs rule of law. How far will it go? #HKSAR20
Verizon jumps on the AI-security bandwagon @BankingTechno
How mirror trades moved billions out of Russia
Trump calls Washington Post fake news over report about fake Time magazine covers:
Euro v. pound: which one will come out on top?
A sign to go slow on raising the minimum wage to $15 an hour, says @Noahpinion
These charts show U.S. threat from foreign steel is overblown via @daniel_flatley
Global #Stocks Fall on Jitters over #CentralBanks Policy
Paddington Bear creator Michael Bond dies aged 91
Kenyan author ditches Swedish book fair over far-right newspaper
Clarity Or Confusion $
10 facts about smartphones as the iPhone turns 10
Magufuli Bids Farewell to Presidents Delivery Bureau Workers: #Tanzania
How a computer virus spread from Ukraine to disrupt world business: #ReutersCyber #CyberRisk
Mouse droppings, beetle bits found in German bakeries
CNN reporter fires back: Sean Hannity needs a hug
Ashton Kutcher: Were getting close to the point where acting can be automated
‘Evil’ Brussels vs. ‘good’ Prague: Czech MEPs want to change EU’s image
#German legislators approve disbursement of loan installment to #Greece
#Iran Annual #Inflation at 11.8%
Carney makes his Mark. Sterling rises vs dollar for 6th day in a row, its best run since March last year.
The changing face of jihadism in Switzerland
How Vienna solved homelessness (via @crosscut) #500khomeless
Will grad students lose the right to unionize under Trump? asks @AlanaSemuels
Russia doubles down on criticism of US for alleging Syria is planning a new chemical attack
Global borrowing hits record as big central banks prepare to tighten credit via @Reuters
@sigrunda
Trump is waging a new kind of Cold War — and millions of jobs are on the front line
Philippines: Market Growth continues to grow but at a reduced rate in June. #SMI
Opinion: Will Albania descend into chaos as Macedonia did? by @dimitarbechev:
Meal-kit maker Blue Apron slashes its valuation expectations by a third. More here:
The New Statesman Leader: Labour and the Brexit debacle
France to legislate on assisted reproduction
Chinese reporters say blocked from #SichuanLandslide coverage
Scarborough: State Department is rotting under Tillerson
BlackRocks Rosenberg doubts market misjudged Draghi via @markets
Our must-read @CapX email now comes with a Stat of the Day. Like this bad boy
11 of the best new low-budget projects in the US:
Trump lawyer routed millions of dollars to his family through nonprofits: report
Five Primary Beneficiaries Of Rising U.S. Oil Exports
Lacy Hunt: The Fed Has Undermined The Economy’s Ability To Grow $
4/6: Municipal #default volume driven by local governments and #utilities #muniland
President Jacob Zuma Congratulates BET Award Winner Yvonne Chaka Chaka: #SouthAfrica
Graphic - Trump, Draghi, Fed doubts: is the US dollar rally done? via @Reuters
JUST IN: Trump accepts Macrons invitation to visit France next month
Women fire fighters during a training exercise at the Pearl Harbor Naval Shipyard, during World War II, circa 1941.
The Supreme Court just made it harder to survive death row
Is Korroding trying to steal Carnage’s wedding ring?!
Narrower U.S. trade gap may boost growth pace in second quarter
See the latest addition to Chinas rapidly expanding navy:
Groom A Successor, Minister Tells Mugabe #Zimbabwe
Yes, Bitcoin is a bubble and it’s about to burst by @jessefelder
German judge Kabisch removed from Auschwitz trial for bias
Iron ore jumps back above $60
Winning: New poll shows only 12% of Americans support the Senate version of #TrumpCare.
Notes abt commodities $JJG $DBA $DBC $GSG u know...
2 Out of 6 Aspirants Qualify to Run For Rwandas Presidency #Rwanda
Rand Paul: These weak-kneed Republicans need to get over themselves
Latest API Report Causes Drop in Prices
The living wage debate cant ignore healthcare
Google should try a little harder for online shoppers
Plans to address fund manager failings unveiled by City watchdog
Cathcart signs new deal with Watford to stay until 2021
Were in! Nearly 200 U.S. mayors have already joined the 2017 #MayorsChallenge. Will you?
Energy deals drive Canadian MA to the strongest start in a decade
Reporter who went off on White House during press briefing: It was a long time coming
Idaho restaurant owner apologizes for tasteless ‘blackface’ ad campaign
New Post: #Crude Oil Sinks 20%: Why Oversupply Isnt the Half of It #EconMatters
Democrats had good turnout in the special election Georgia. But that wasnt enough.
Many units of measurements are named after scientists. Here are their stories:
Can Melbourne lower its temperature by 4 degrees?
#DonaldTrump to visit #Paris for #BastilleDay at Macron’s invitation
U.K. cabinet cracks are appearing as Theresa May seeks to negotiate a Brexit deal
This is what it sounds like when doves screech via @robbrand @markets
Trump is to stocks as pensions are to bonds
Kushner is adding a seasoned scandal lawyer to his team
The beauty products Meghan Markle is rumoured to love
Djokovic bumped up to two in Wimbledon seedings
Commentary: The biggest victims of the Senate healthcare bill (and other Trump plans)
Germany Durable Goods Price Index for June: 115.6, previous: 115.6 (change: 0%) #WPI
Montreals reputation as affordable housing haven strained by rising prices in some areas
We’re Working More—and Sleeping Less by @andrewvandam
Google wont take the Brussels onslaught lying down via @gadfly
Stocks have become so expensive that central bankers are weighing in again
The Bank of England hawks are not for turning via @BW
Take a peek inside Ben Westerman from HM Capital Managements portfolio #ETFs
#AAPL Daily Please RT + Register for next weeks Free Webinar: …
A failed $6 billion deal shows how index funds can ruin your takeover
University of Cape Town Denies Evictions for Non-Payment of Fees: #SouthAfrica
NAFTA: Price inflation eases in June but remains firm. #SMI
Latest API report causes drop in oil prices
Morocco Offers Lessons for Regional Integration: #Africa
Six-month-old baby was found dead in mothers arms following #GrenfellTower fire
Nuclear waste-carrying ship sets sail for first time on German river
Model Miranda Kerr turns over $8 million worth of jewelry to the Justice Department
Hamburg discharges Berlin police after drunken party
FBI Interviews Employees of Russia-Linked Cyber Security Firm Kasperky Lab via @SteveKopack
Pound jumps as Carneys hawkish tone sends gilts tumbling via @johnainger
Interesting, Breitbart has nothing about the EU-Google decision on its front page. Drudge does.
.@NATOmission_ru: NATO troops are now in places of Eastern Europe where they never have been and never should be
U.S. DISTILLATE STOCKS fell -0.2 million bbl to 152 million bbl in week to Jun 23
New museum opens for finance fans
Rockwave | Athens | June 30 - July 2
A perfect day on Oahus north shore #hawaii #travel
Kazantzakis in England | Iraklio | July 12-16
A new tool from @MIT_Picower and @Stanford researchers offers snapshots of neuron activity.
The first evidence that painful memories can be safely erased.
Parthenon Film Festival | Halkidiki | July 14-16
Petra Diamonds shares tumble as setbacks test debt covenants
BP pushes Artificial Intelligence Beyond Limits
Evicted Student Doctor Takes University to Court: #Zimbabwe
Cabin Crew to Lay Corruption Charges Against SAA Execs, Board: #SouthAfrica
CNN war with Trump gets personal:
Hamas creates no-go security zone on border with Egypt
UAE unaffected by new wave of global cyberattacks - TRA
Mexican singer Lila Downs rejects Trump’s anti-Cuba policies
Britains big new warship runs Windows XP
#BREAKING: Trump accepts Macrons invitation to visit France
Conservatives’ excuses for kicking millions off of health care don’t make any sense.
Last nights moon with earthshine near bright star Regulus via Eliot Herman in Tucson
A tale of two networks: How Fox News and CNN handled recent retractions
In Western European countries, confidence in the U.S. president has declined sharply.
ECB worried by US plan for looser bank rules
US EAST COAST GASOLINE STOCKS rose +0.6 million bbl to 68 million bbl in week to Jun 23
U.S. EAST COAST GASOLINE STOCKS continue to tighten versus 2016 and 10-yr average as regional glut slowly clears
Enjoy Arbys.
Florida wildfire cuts interstate highway
Cobie Smulders meets Friends from College
Magic Spot: Camp Cecil on Mexicos Isla Santo Espiritu
Le discours du gouvernement sur les migrants inquiète les ONG via @EurActiv_FR
Cash-rich Sweden squirrels away ahead of demographic time bomb
The moment @joshuawongcf was forced into a police van #HKSAR20
#Venezuela: Helicopter Strafes Court in while #NicolasMaduro Speaks in ‘Terrorist Attack’
Colombias Marxist guerrilla group the FARC, officially disarm, ending 52 years of fighting.
Prince William and David Cameron implicated in Fifa #WorldCup corruption scandal
France says Trump accepts invitation to attend July 14 Paris celebrations via @Reuters
Madrid metro drivers call strike during WorldPride
Paul Singer Says Joke Is On Developed World Economies Who Steal Growth From the Future $
ICYMI: North Koreas chemical weapon deterrent #sarin #VX
More Than 250 US Mayors Commit To 100% Renewable Energy Amidst Adoption Of New…
NSA spying scandal committee presents controversial final report
GOP senator says Trump doesnt understand basic elements of healthcare bill: report
Newest burger at Sonic blends beef w/ mushrooms so you eat less meat | @FastCompany #climate
Euro Hits High Against The US Dollar, UK Pound And 10 Year Sov Yield Rise as BofE and ECB…
congratulations to the person who found the most threatening way to phrase this appeal
The Supreme Court just made being on death row even worse
Research Affiliates On Equity Returns By Political Party – An International Look $
Minister acted unlawfully in not stopping Lough Neagh sand dredging says court of appeal
Let science be a springboard for politics. Do you agree?
Haley and Mattis credit White House statement with stopping Syria chemical attack
Approach All Claims Of Market-Beating Formula With Extreme Skepticism
Paddington Bear creator Michael Bond dies aged 91
GTM Predicts 27% Drop In Solar Prices By 2022
EURUSD is up even though the ECB is pumping speculators breaks. Cable is up because of Carney. Real winner: $EURGBP
Warren Buffett: GOP healthcare bill should be called Relief for the Rich Act
Italy threatens EU with closure of ports to rescue boats
U.K. Cabinets Mixed Message on Brexit Bridging Deal @simonjkennedy @tomkeene @guyjohnsontv
COSAFA Cup - Sable Antelopes, Taifa Stars in Goalless Draw: #Angola #Tanzania
FREE: Markets want #US #shale producers to slow down - for the sake of prices #OOTT
#IPCapitalPartners 1Q17 – Pricing Power
:LOL - Dual mandate. Theres only one mandate.
David v Goliath battle between one woman and a corporate giant. Coming soon. Watch this space!
U.S. GASOLINE STOCKS fell -0.9 million bbl to 241 million bbl in the week to Jun 23
Even the Magic 8-ball prefers Gmail.
Pound climbs towards $1.30 as BoE gov Mark Carney hints at interest-rate hike
I was told there would be no Peterson Institute today.
Namibia Ruling Party Politician Hikopua in Car Crash: #Namibia
Dont Regulate Drones Like Theyre Missiles | @mchorowitz @BulletinAtomic
This AI can predict how rich your neighborhood is from space
Wave Power Could Contribute 10% Of Global Electricity Demand By 2050
Malawi to Impose Curfew On Night Buses, Trucks - Report: #Malawi
Carney says #BOE may need to remove stimulus as slack erodes via @UKeconews
Police Arrest Student Leaders After Fees Demonstration: #Zimbabwe
Six charged over #Hillsborough stadium disaster
China frees activists arrested after investigating labor conditions at Ivanka shoe factory
Dont Abandon Patriotism, Kaunda Reminds Africa: #Africa
Equities Turn So Hot Even Central Bankers Are Taking Notice via @SofiaHC1 @markets
The Feds Bullard crashes the panel!
#Gold edges higher as dollar faces further weakness @MarketWatch
Blockchain Startup ChromaWay to Launch Hybrid Database Product
Is it really possible to make an ethical smartphone?
In 2012, the global satellite industry generated 189.5 billion dollars.
India Petrol Price Index for June: 100.6, previous: 103.4 (change: -2.8%) #WPI
Protest against nationwide mob lynchings at Delhi’s Jantar Mantar, as part of #NotInMyName campaign
Gasoline demand
U.S. REFINERY THROUGHPUT fell -262,000 b/d to 16.9 million b/d in the week to Jun 23
Entitlement reform is finally here—and its ugly
The ocean is a powerful, but fragile force. Now its changing in unpredictable ways
Fecal bacteria found in Costa, Starbucks and Caffe Nero


Gregor Samsa
Beware Shorting Impeachments
1 month ago




We’ve analyzed the behavior of the S&P500 during the Watergate impeachment hearings and the Clinton impeachment.  If you’re shorting risk markets solely based on speculation that President Trump may be impeached, maybe you should think again.

Let’s first look at the Clinton impeachment S&P500.   The market never seemed to take the Clinton impeachment seriously and was never a threat to the stock market.

Then we’ll analyze the more complicated Watergate scandal, which many consider the main culprit of the 1973/74 bear market, a 50 percent decline in S&P500 from January 11, 1973 to October 3, 1974.

Clinton Impeachment
The rumors of the Clinton-Lewinsky affair broke January 19, 1998, on the Drudge Report, which was a market holiday.  Recall U.S. stocks were in a rip-roaring bull market and massive bubble that saw the Dow rise 253 percent during the Clinton administration, second only to Calvin Coolidge’s roaring twenties bull market (see here for Presidential Stock Returns).   The NASDAQ, home of the infamous dot.coms,  rose a multiple of the Dow.

The table below shows the timeline of various key events and the S&P500 returns.

Clinton Table_Impeachment

Even after the news broke and the “blood was in the water” — recall the media frenzy,  probably crazier than now because it involved sex — U.S. stocks continued to march higher.   The S&P500 rose another 21.27 percent until its peak pre-Russia default high of 1,186.75 on October 17th.

Summer of 1998 – Russian Debt Default
Ironically,  Russia announced its debt default the same day President Clinton testified to the grand jury he had an “inappropriate relationship” with Ms. Lewinsky.   The global markets fell apart and what was a garden variety correction in the S&P500 sharply accelerated.

The Brazian stock market fell 16 percent on September 10th.   The Fed was forced to cut interest rates several times in just 7 weeks.  Systemic risk was rising rapidly as  Long-Term Capital Management (LTCM) ultimately failed and was bailed out by a consortium of financial institutions in late September.

The total decline in S&P500 during this period was 19.34 percent finally bottoming on August 31, many months before the global economic crisis ended.

Was the financial crisis of 1998 the result of the fear of Clinton being impeached?  Hardly, or should we be blunter – NFW!

Remember, the U.S. had the “Committee to Save the World.”

Comittee to Save the World_Impeachment

The 1998 financial crisis was mainly the result of Russia’s debt default and the subsequent huge global margin call.   Hedge funds were big in Russian debt that had defaulted forcing them to sell many of their assets, say, even their Safeway bonds.   As credit spreads significantly widened in almost every credit instrument,  the extremely levered LTCM with all its Nobel laureates tanked.

Even if you believe the march toward impeachment was a contributing factor in the ’98 financial crisis,  it wasn’t,  or it needed a sufficient condition,  and was not even a necessary condition,  in our opinion.    We will admit there is a possibility the Clinton administration was distracted by the scandal and may not have allowed or wanted Russia to default.

We lost a lot of money betting Russia was “too nuclear to fail.”   Even though we were in the euro bonds they ultimately kept paying.   If only we held on!

Later, we will make the argument that Watergate may have been the necessary condition of the 1973/74 bear market,  but the OPEC embargo was the sufficient condition.

Impeachment and Acquittal
By the time President Clinton was impeached in the House of Representatives on December 19th, the S&P500 was up 23 percent since the Lewinsky rumors first surfaced.  The Senate acquitted President Clinton on February 12, 1999, and with S&P500 up 26 percent since the start of the scandal, “the long national nightmare” of the bankrupt impeachment short sellers was over.

The S&P500 continued higher for another year, finally bursting on March 24, 2000, up 56 percent from the day of discovery of the Clinton-Lewinsky affair.

Clinton Chart_Impeachment

What we did learn in 1998 was that stock market bubbles don’t pop easily.   That is until they do.

Watergate Scandal
The analysis of Watergate on the stock market is a little more difficult to unpack as it involved the conflation of three major “rock your world” events:

1) A nasty bear market that took the S&P500 down almost  50 percent from January 1973 to October 1974;

2) A potential constitutional crisis (never the case during the Clinton impeachment) as it was uncertain if the White House would turn over “the tapes“.  President Nixon fired the Special Prosecutor who was charged to oversee the federal criminal investigation into the Watergate;

3) And we think,  most important, was the first OPEC oil embargo that shook the global economy on October 16, 1973

Watergate Table_Impeachment

The break-in of the Democratic National Committee headquarters in the Watergate apartment complex took place in the summer of 1972.  It took several months before it hit the front pages as national news and a Presidential scandal.   Bob Woodward and Carl Bernstein were urban reporters rendered to the back pages of the Washington Post when they were assigned to the Watergate story.

The S&P500 was in rally mode going into the 1972 landslide reelection of Richard Nixon. The index peaked on January 11, 1973, at 120.24 and would not regain that level until more than 7 years later.    From the day of the Watergate break-in until the January peak, the S&P500 rose 11.22 percent.

Liddy and McCord Convictions
On January 30, 1973, two members of President Nixon’s re-election committee were convicted for the Watergate break-in.

“…two former officials of President Nixon’s re-election committee, G. Gordon Liddy and James W. McCord, Jr. were convicted yesterday of conspiracy, burglary and bugging the Democratic Party’s Watergate headquarters.”
Washington Post, January 31, 1973

Game on,  Watergate.

Short-term Bottom
The S&P500 continued to decline through the summer until making a short-term low on  August 22nd at 100.53,  down 16 percent from the January high.   It then rallied 11 percent for two months peaking on October 26th.

At this point, the S&P500 was only down 7.4 percent even after the John Dean testimony to Congress and the Saturday Night Massacre and the OPEC oil embargo, of which both occurred just a week before.    Similarly ironic,  the OPEC oil embargo and the Saturday Night Massacre occurred in the same week as did the Clinton confession to the grand jury and Russian debt default happened on the same day.

Watergate Chart_Impeachment

.

The double shock of OPEC, raising the price of oil by 70 percent with further cuts in production to follow,  coupled with the Saturday Night Massacre, raising the specter of a constitutional crisis in the U.S.,  sent the global economy and markets into a tailspin.

As the chart illustrates, these two events marked the end of the short-term rally.  The S&P500 proceeded to fall another 43.5 percent through the resignation of President Nixon on August 8, 1974,  until it bottomed on October 3, 1974.

From its January 1973 high until the resignation of President Nixon in August 1974, the S&P500 fell 32 percent.

OPEC or Watergate?
So we ask you, folks, what was the main cause of the 1973/74 bear market and 50 percent decline of S&P500?  Watergate or OPEC?

Structural Economic Damage of OPEC
Nobody knows for certain,   but we maintain speculate that if the global economy has not suffered the structural damage from the OPEC shock,  the Watergate scandal would have been just noise and the S&P500 would’ve probably not even entered a bear market and suffered only a normal correction.   That is unless Nixon sent tanks out onto Pennsylvania Avenue.

Though the S&P500 bottomed less than two months after President Nixon resigned,  it didn’t regain its January 1973 high until July 17, 1980.   The stagnation of the 1970’s brought on by the structural damage to and the massive realignment of the global economy of the OPEC shocks took its toll on the financial markets.

Yom Kippur War
An argument can be made that Watergate distracted and weakened the Nixon administration, which emboldened the Arab nations that attacked Israel during the Yom Kippur War in early October 1973.    The Nixon Administration responded with Operation Nickel Grass, a strategic airlift to deliver weapons and supplies to Israel.

This was after the Soviet Union began sending arms to Syria and Egypt.  The Arab nations of OPEC, in retaliation to Operation Nickel Grass, raised the posted price of oil on October 16.  The actions of the Soviets and OPEC may have been the result that they and the world perceived the U.S. weak due to a domestic political scandal.   Pure supposition on our part.

So, Watergate, a necessary condition to the 1973/74 bear market?   Maybe.

What About Trumpgate?
So far no smoking gun,  no facts, no John Dean testimony, no tapes.

But more complicated.  Underlying allegations much more serious than covering up a third rate political burglary and lying about,  you know.   Also, a much wider net that could include improper business transactions that took place prior to taking office.

Lots of incompetence from the administration, speculation, rumors, coincidences, and what appears to be circumstantial evidence of a coverup, and the punditry desperately trying to connect the dots.   Feeding frenzy time.

Oh yes, and the appointment of Special Counsel, Rober Mueller,  to “oversee the previously-confirmed FBI investigation of Russian government efforts to influence the 2016 presidential election and related matters.”

Though this illustrates how serious the matter is, and becoming, it should be seen as a positive by both those who suspect President Trump is guilty of something as it takes the specter of a constitutional crisis off the table;  and for those who believe the President has done nothing wrong,  the appointment of the Special Counsel should vindicate him.   All other things being equal,  the Mueller appointment should be a positive for the markets.

Unless President Trump fires the Special Counsel.

Conclusion
As illustrated in our analysis,  not a great idea to short stocks based solely on an impeachment trade.   In fact,  we tend to agree with what Professor Jeremy Siegal of the Wharton School said yesterday on CNBC,

“If Donald Trump resigned tomorrow I think the Dow would go up 1,000 points,”  Jeremy Siegel, May 17, 2017

The corollary is that the Republican pro-economic growth agenda is then accelerated as the political distraction, incompetence and protectionist bias of the administration are removed.  And that the policies are passed before the 2018 election, which the Republicans are becoming increasingly vulnerable to losing both houses of Congress.

The downside scenario is that the investigation lingers, the bad news keeps dripping out, nothing gets done,  the Democrats take the House in 2018 and introduce impeachment hearings.   That may be the most likely scenario and stocks won’t like it, especially given their high valuations.

Our sense,  the Republicans may believe this scenario and double up their efforts to unify and get something done quickly — that is going to the “two-minute offense” — as the clock runs out.   Stock positive.

One Big Caveat
Noted in our analysis are the two big “coincidences” of bad things concurrently occurring at tipping points during the two impeachment proceedings.   The Russian default on the same day President Clinton confessed to the grand jury and the Yom Kippur War/OPEC oil embargo during the same week of Watergate’s Saturday Night Massacre.   Coincidences?

Bad things happen in the world when the U.S. administration is distracted and looks weakened by political scandal.  And there is a legion of bad things out there just waiting to happen, which are stock negative.

And then there is “wag the dog“.

The 6 Sigma Event:  President Pelosi in 2019
Finally,   you know we like think outside the box here at Global Macro Monitor and live in the fat tails.

Contemplate this 6 sigma scenario:

Bad news for Trump continues to leak out and staffers and acquaintances are indicted all though 2017 and 2018.   The Democrats take the House and Senate in a landslide in November 2018.

Impeachment charges are brought both against President Trump and Vice President Pence, say, as a co-conspirator on obstruction of justice charges in the firing of James Comey.

It’s 2019 and the Dems control the House and the Senate with comfortable majorities.

The House impeaches the President and Vice President.   The Senate convicts both.

Who is next in line to assume the Presidency?   The Speaker of the House,  Nancy Pelosi?

The probability?  Six sigma or about 2 * 10^-9 or two in a billion.  Most likely,  even lower. 

Hey,  but good stuff for a political thriller or fodder for House of Cards,  no?