Trump and the Stock Market: Connect the Dots

Since the start of the year the Chinese stock market has fallen out of bed and that has led to a worldwide fall in stock prices. According to the commentariat the reason for China collapse has to do with a growth slowdown in China, a devaluation of the Yuan and a relaxation of the restrictions on stock sales by large shareholders.

However something more fundamental maybe at work. Perhaps the Chinese market is now pricing in a Trump victory and with that the potential to wreak havoc with the global trading system. Should that happen the biggest loser would be China, but that would blow-back to the entire global economy. Not a pretty picture. Moreover with Hillary Clinton now opposed to the TPP the outlook for trade expansion is far from favorable.

Too many people I know joke about Trump, but the fact remains has consistently led the GOP field and he has to be viewed as having at least a 50/50 shot of getting the nomination. We may not pay attention, but the rest of the world certainly is.

Giving Opportunism a Bad Name: Hillary and TPP

Hillary Clinton came out against the Trans Pacific Partnership (TPP)  trade agreement today. After publicly supporting it over 30 times as President Obama's secretary of state, she has succumbed to the hot breath of protectionism now emanating from the left wing of the Democratic Party and it new exemplar, Bernie Sanders. Simply put, she is giving opportunism a bad name.

Now with much of the Republican Party under the spell of the protectionist Donald Trump, the chances of Congress approving the TPP next year are slim and none. The situation is further complicated by John Bohner's departure from the House leaving the Republican rookies in charge. It was a tough sell to give Obama "fast-track" authority earlier this year; it will be a far tougher sell next year.

Meantime in a world that is growing more chaotic by the day, this is not good news for the United States and it is certainly not good news for the global stock markets.