Showing posts with label Mike Pompeo. Show all posts
Showing posts with label Mike Pompeo. Show all posts

Wednesday, January 29, 2020

One Down, One Up, and Now Comes the Fed

After two days of turmoil, the roller-coaster ride that has been this week's stock market is about to take another twist, or turn, or bump, or dive, or rise...

Nobody knows where it's going with the Federal Reserve's FOMC set to announce its first policy directive of the new year at 2:00 pm ET on Wednesday.

Monday's coronavirus-inspired deflation was followed by a miraculous revival on Tuesday, as if somebody had found a sudden cure for the deadly outbreak that has spread across China and been exported - at last count - to at least 15 other countries, including the United State, Canada, France, Germany, Thailand, Vietnam, Malaysia, Cambodia, Japan and many others. Being mostly unchecked and having an incubation period of up to 14 days, it's probable that the virus will circle the globe within the next month.

The Dow lost some 450 points on Monday and regained less than half of that on Tuesday. With the virus still highly infectious and the death toll rising to 132, the Fed standing pat on interest rates would seem to be about as consequential as a water hose in a rainstorm.

Beyond the spread of the coronavirus, the other big story in play this week is the impeachment trial of president Trump, being played out in the US Senate. Both sides have presented their cases, though the Republican's defense took less than half the time as that of the Democrats and was more focused on law and reason than the House managers' mangled miasma of mistaken misappropriations.

Where the Democrats sought to emotionalize the proceedings, the president's legal team toned it down, making the case, alternatively, that the articles of impeachment were vague and thus void, or that no crime had been committed, emphasized by professor Alan Dershowitz's impassioned, eloquent, well-researched argument on Monday night that the founders intended impeachment to be narrowly focused, rather than nebulous and amorphous as are the Democrat charges of Abuse of Power and Obstruction of Congress, neither of which are criminal.

Despite the apparent readiness of the Republican side, the media spin spent the week twirling around speculation over a piece of manuscript leaked from former advisor John Bolton's upcoming book, spuriously-timed to intercede in the Senate proceedings. Bolton's claim that he had a personal conversation with Mr. Trump, in which the president explicitly tied the delay of aid to Ukraine with the need for that country to dig into the affairs of Joe Biden and his son, Hunter, concerning their dealings with the corrupt natural gas company Burisma, was all-too-conveniently timed to overshadow the defense team's presentation of facts and legalities.

Thus, instead of examining the case for or against the president based on the best arguments from both sides, the media has attempted to shift the attention of the American public from real arguments to a false paradigm over calling additional witnesses, none of whom would be likely to move the needle in either direction very mch at all.

Senate majority leader, Mitch McConnell, who said once that he may not have the votes to stop additional witnesses and evidence, has also said that the votes are there to defeat any such motion on Friday, when the issue will come to a vote of some kind, after two days of questions from senators to either side - or both - on Wednesday and Thursday.

If he Democrats succeed in their desire for additional testimony, it would likely extend the trial for weeks if not months, given that some witnesses, including the testimony of Secretary of State Mike Pompeo and Chief of Staff Mick Mulvaney, would likely be subject to executive privilege, a matter that would end up in the hands of the Supreme Court. Arguments for and against the invocation of privilege would likely take weeks to draw up and more weeks to argue before the court could issue a ruling. It's a real can of worms that the Democrats threaten to open.

Cooler heads may prevail in the Senate. Having heard enough to make a reasoned decision, there may come a vote on Friday - if the vote for additional witnesses fails - up or down on the president's guilt or innocence, which would end the trial and allow Senators Klobuchar, Sanders, and Elizabeth Warren enough headway to get back to campaigning in Iowa, where the first primary caucus is set to wrap up on Monday, February 3.

While the Senate plays paddy-cake with the future of the nation and its precedents, the coronavirus will no doubt spread fear, death and potentially-huge economic ramifications around the world. Whatever happens in the Fed decision or the impeachment matter is likely to take a back seat to the carnage a virulent, unchecked, highly-contagious virus can unleash.

At the Close, Tuesday, January 28, 2020:
Dow Jones Industrial Average: 28,722.85, +187.05 (+0.66%)
NASDAQ: 9,269.68, +130.37 (+1.43%)
S&P 500: 3,276.24, +32.61 (+1.01%)
NYSE: 13,877.61, +108.00 (+0.78%)