The ‘real’ story on Trump Jr.’s Russian meeting?
No legal review
The political novice Trump Jr. could not resist being involved in something that could assist his father’s Presidential bid. That was without considering subtle aspects that might have helped him avoid the appearance of willingness to collude with the Russians. The first tripwire he should have noticed was the email from Rob Goldstone stating so explicitly the contact was part of “…Russia and its government’s support for Mr (sic) Trump…”
That this did not trigger a pre-response review by the Trump campaign’s lawyers is astounding! Yet it appears Donald Jr. never put it in front of them. They surely would have known what he (as a novice) might not have realized: accepting assistance from a foreign power (especially an adversary) to influence a U.S. election is both unseemly and illegal.
Fifth wheel psychology
Yet beyond that, there is a key question he should have asked himself: “If these folks indeed have “…some official documents and information that would incriminate Hillary [Clinton] and her dealings with Russia and would be very useful to your father…”, what the heck do they need me for?” They could have easily released it at any time, and it would have still ostensibly been a major negative for the Clinton campaign.
It appears the Trump the Younger was so keen to be involved in something he could take credit for that he didn’t bother to think through the real dynamics (and legal implications) of the offer. This kid is no Michael Corleone… more so like Fredo.
Kremlin ‘Business as Usual’
Yet for any sophisticated observers, this is a standard FSB (Federal Counterintelligence Service of Russia as successor to the KGB) operations tactic. It is the ‘dangle’ of some key information that is used to measure the interest of some individual or entity on the opposing side. While the ultimate object of these exercises is to find some individual who can provide useful information or become an undisclosed agent (or unwitting stooge), sometimes the initial response of the target is enough to provide an advantage to Russia.
That seems to be the case here. Regardless of the Russians providing no information on Hillary Clinton, the emails between London-based publicist Goldstone and Trump Jr. demonstrate a willingness to ‘collude’ with foreign agents on things that could affect the U.S. election. Even if no laws were broken based on no action actually being taken, this reinforces all of the claims of the Democrats and the mainstream press that the Trump campaign was willing to cooperate with foreign agents to influence the U.S. election.
Back to the chessboard?
And while the partisan Left politicians and media slug it out with the Trump organization and tacitly supportive Republicans once again, who is the real winner? Russia, along with other less-than-democratic states. They have succeeded once again (much as with the Democratic National Committee and Hillary Clinton emails leaked during the election campaign) to weaken confidence that American (and later some European) election processes are the fair and free exercises that Western leaders rightfully extol.
Look for more of the same unless and until U.S. politicians and their supporters drop their short-sighted acrimony and get back to the chess board.
As long as the Americans are running around in their short-sighted partisan attacks on, or defense of, the President and his team there will not likely be any progress on the somewhat enlightened Trump reform and stimulus agenda.
The attendant lack of further reform-related or outright fiscal stimulus for the economy has been well absorbed by the U.S. equities… for now. They are happy to have a more dovish Fed back again on weaker data in the wake of Fed Chair Yellen’s admission that inflation is weaker than expected at her Congressional testimony last week.
However, it is necessary to put the ‘macro’ assessment of U.S. equities in perspective based on pre- and post-election trading. Just to be clear, we do not expect the sort of global economic weakness seen during the 2007-2008 Crisis. Japan and continental Europe (especially Germany) are finally quite strong once again, with China improving as well.
As such, any skepticism toward the U.S. equities should be constrained to reflect the ‘over valuation’ right now if the Trump reform and stimulus agenda are not faring well into this fall. Based on the front month S&P 500 future weekly continuation chart, barring any catastrophic fundamental-economic impact, there should be quite a bit of support back into all of the 2015-2016 congestion in the 2,200-2,100 range prior to the post-U.S. election extended rally. Of note, a classic full trend correction points to a target of roughly 2,200-2,100 satisfying a 10%-15% correction from the current 2,465 area trading high.
While corrections often either undershoot or overextend beyond that classic 10%-15%, it is interesting that the 2,200-2,100 range is the price congestion reflecting the strength of the U.S. equities prior to any more extensive growth expectations after Trump’s election. As such, it would be reasonable to expect that area might be retested if the Trump agenda overvaluation were eliminated on any failure of tax reform and stimulus into this fall.
Thanks for your interest.
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