Moneywise – Ep 01 (Asset Classes)
Trump & Impeachment
One of the biggest hot-button topics going on right now, is naturally President Trump and impeachment. Will he, or will he not get impeached?
TL;DR
An impeachment process is not so straightforward. There are several rounds of voting that start in the House of Representatives, before moving on to the Senate. Even if a President is impeached, historically, no impeachment has led to a conviction. In the case of President Trump, he is highly likely going to be impeached, but a conviction is highly unlikely given the Republicans control the Senate and the case against him is very weak.
What Is Impeachment?
To answer that, let’s first get a quick look at what it means to be “impeached”. For impeachment to take place, proceedings start in the House of Representatives with a simple vote. If the vote passes, then the process moves to the Senate where a trial is conducted. Once the trial is complete, the Senate will be required to vote on whether to convict or not. If the Senate does not reach a 2/3 majority to convict, Trump remains in office, even though he was impeached.
That last step is particularly important. Many people think that getting the President impeached instantly guarantees a one-way ticket out of the White House. That is simply not true. A President can be impeached, and then remain in office after because the vote to convict did not reach 2/3 majority. It is worth noting that no U.S. President in history has been convicted after impeachment, with all the previous instances of impeachment failing to reach a majority vote for conviction.
According to the constitution, impeachment is only done on the grounds of “treason, bribery, or other high crimes or misdemeanours”. Also note that it is a political process and not akin to criminal proceedings in court.
What Is President Trump Accused Of?
In short, Trump has been accused of using his position to dangle “carrots” to President Volodymyr Zelensky of Ukraine in order to start a smear campaign on Joe Biden, former Vice-President and a 2020 Democratic Presidential candidate. Trump had purportedly tried to pressure him into digging up information about former Vice-President Joe Biden and his son, Hunter Biden, who had worked for a Ukrainian company back when Joe Biden was Vice-President. Trump is accused of withholding some $400m in military aid to Ukraine even after Congress had allocated it, and offering to have a White House meeting with President Volodymyr Zelensky, which would have been a huge boon for Ukraine. All of these instances then, amounting to an abuse of presidential power.
Evidence of these allegations apparently obtained from a few sources, such as an anonymous intelligence official who submitted a transcript of a phone call between Trump and President Volodymyr Zelensky. During the phone call, it appeared that Trump was pressuring President Zelensky to launch his own investigation into Joe and Hunter Biden and to make that investigation as public as possible. This phone call also came on the back of Trump just having blocked US Military aid from being released to Ukraine, and a senior official testified that release of this aid was firmly conditional on Ukraine investigation Biden and making it public.
Naturally, Trump has defended himself and those defences do in fact hold water. President Volodymyr Zelensky himself stated that he felt no pressure and that the US military aid was eventually released to the Ukrainians, who themselves said they were not aware the aid was held back.
Another Case of Trump Bashing?
It is no secret that the mainstream media and the Democrats dislike Trump. The media and the Democrats have never had anything pleasant to say about President Trump, and anything everything he does is only bad, never good in any way. Even before these formal impeachment charges were brought against Trump in the articles of impeachment, it was clear that the Democrats were just itching to find anything they could get their hands on to impeach Trump, and they finally settled on those charges I mentioned earlier. To be clear, it does appear that the Democrats are ploughing through this whole impeachment process without being absolutely clear what is and isn’t allowed in terms of due process. For example, what exactly is Trump being charged with according to the constitution’s definition? Treason? Bribery? Abuse of power? How do all of Trump’s actions really stack up and is there a strong case? A number of legal experts do not think so, and I agree with them. The case against Trump, though on the surface sounds good, is actually rather flimsy. How it pans out remains to be seen, but it does look like Trump will be impeached, but conviction is another matter altogether.
Trump vs 2020 Presidential Candidates
Markets are bracing themselves for another election year in 2020. And with that comes uncertainty. However, one can form a good idea of what to expect based on each candidates ideas and policies when it comes to business. For example, Elizabeth Warren’s huge wealth tax isn’t seen as something hugely popular and she appears anti-business. Bernie Sanders is clearly pro-people and not pro-business, and Joe Biden is seen as being moderately business-friendly.
In fact, given how markets have performed with Trump in power, markets are looking to extend that run, and investors are hoping Trump gets re-elected so that this Bull Run can continue. Anyone person other than Trump in the White House and markets might not do so well.
There is also that little matter of North Korea. Whether or not you like Trump, he is the first sitting US President to have stepped foot into North Korea. And he brought the leader of North Korea to the table with 2 summits. Kim Jong Un also appears far more receptive to signing a deal with Trump. Other candidates, however, all appear very likely have to a more hostile attitude towards Kim.
My prediction is that Trump will be impeached but not convicted. It is clear the Democrats are rushing through passage of the impeachment process just for the sake of impeaching him because he’s Trump. However, I do not believe the case against him is a strong one. In fact, I feel the opposite; the case is rather flimsy and weak. So Trump is very likely going to get impeached, but not convicted. Add to that, the Senate is controlled by the Republicans, so the 2/3 majority needed for conviction looks even less likely.
To conclude, I feel that barring any unforeseen circumstances, Trump is in pole position to get re-elected. This is based on news from friends, old classmates, and contacts on the ground in the U.S. itself. They feel the pulse on the ground and it has never been stronger or happier. Jobs reports are coming in hugely positive, interest rates have been cut this year, and the markets are reaching new all-time highs. The sentiment is that Trump is a breath of fresh air with his antics, and despite what the “totally neutral” mainstream media says about him, things on the ground are better than ever. A shift back to an establishment candidate from the Democrats is being seen as more of what the American people got from 2008 to 2016, and the sentiment is: what good is that?