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Tuesday, January 31, 2017

US Constitutional Crisis Inevitable

Less than 1 month in office, President Trump has managed to get himself in a fine mess!. It started when he signed an executive order to ban the entry into the US of nationals from 7 predominantly Muslim countries as well as the resettlement of Syrian refugees in the US. These twin bans - travel ban and immigration ban - were successfully challenged in US courts.

The crisis has now morphed into what could potentially be a constitutional crisis due to the sacking of the Acting Attorney General Sally Yates by President Trump for her refusal to challenge the court rulings to suspend the executive order.

A few pundits have expressed opinions that a Trump Presidency could end in a constitutional crisis and his impeachment right after his surprise election in November. One of the most recent articles on this topic was penned by Robert Kuttner of the American Prospect, entitled "The Inevitability of Impeachment" (here). Trump has many problems which are partly due to his psychological conditions as well as what he perceives to be his role in the Government. Michael Lewis said it best when he shared his fear of what the leader of a group of angry people could do (that's Trump) when he achieved power (here).

With the travel & immigration bans spinning out of control, Republicans in the Congress are becoming very uneasy with Trump's erratic behavior and Democrats are becoming more vocal. As calls for his impeachment gain momentum, the fear of a constitutional crisis could quickly spill over to the US stock market. As we all know, the market abhors uncertainties. We have only to look back to the Watergate crisis and Nixon impeachment to see how the stock market reacted to uncertainties in Washington then (here). Thus, we should be very careful over the next few weeks.

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