Firing Comey and Trump Agenda

May 10th, 2017 11:08 am | by John Jansen |

This is an interesting collage of analyst opinions on the firing of FBI Director Comey and the impact that action will have on the Trump legislative agenda.

I think the Watergate comparisons are hyperventilating hyperbole. Watergate had been a dominating  from March of 1973 and the so called Saturday Night Massacre was in October. There was a Select Committee chaired by Senator Sam Ervin which produced the John Dean ” cancer on Presidency” narrative and there was Alexander Butterfield and his bomb shell disclosure of Nixon’s taping system. There was significant evidence that Tricky Dick was a crook.

In my opinion we have nothing remotely analogous to that body of evidence this time.

 

Here is the Bloomberg article:

Comey’s Firing May Suck Oxygen From Trump’s Agenda: Street Wrap
2017-05-10 13:46:39.346 GMT

By Felice Maranz and Brian Chappatta
(Bloomberg) — Donald Trump’s abrupt firing of FBI Director
James Comey is raising questions about whether the president’s
pro-growth, tax-cutting agenda will stall as the focus shifts to
why Comey was dismissed amid probes into possible Russian ties
to Trump’s campaign.
* Stocks were little changed in early trading, with the S&P 500
down less than 0.1 percent at 9:45 a.m. in New York

COMPASS POINT (Isaac Boltansky, in email to Bloomberg)
* Comey’s firing is unlikely to sink Trump’s agenda, but surely
slows it, as dismissal now becomes the focus on Capitol Hill
* Congressional Republicans still want tax reform, and they’ll
work toward that goal — but decision distracts from legislating
and further muddies the agenda; Republicans “have to be
befuddled” that White House refocused attention on this issue
right after they’d finally secured “some modicum of momentum” in
wake of AHCA passing
* In note to clients, Compass Point writes timing is
“inconceivably curious,” political ripples will further
complicate Trump’s Congressional agenda

COWEN (Chris Krueger)
* “EVERYTHING just got more challenging on Capitol Hill”;
situation is “almost unimaginably fluid,” with more questions
than answers
* Sees Comey dismissal as likely to consume most of the oxygen
in Washington for foreseeable future, with any momentum from
House health care passage having gone up in smoke
* Sees “bigly problem” for White House and all Republicans; hard
to see any political and policy upside; watching key House and
Senate Republicans on appointment of special prosecutor or
bipartisan committee to investigate; sees Oct. 1 as likely hard
catalyst, with Democrats possibly demanding special prosecutor
or triggering govt shutdown

HEIGHT SECURITIES (Peter Cohn)
* Comey’s firing will likely end up being “a political story for
the ages and cocktail party outrage fodder,” but Trump will
probably stay in the Oval Office, legislative agenda will be
unaffected
* Notes Sen. Lindsey Graham, usually a thorn in Trump’s side,
was quick to praise the president (good sign for avoiding party
revolt); sees “little more than crocodile tears” for Comey on
both sides of the aisle, while Trump probably moved too quickly
to let issue impact 2018 midterms or his own reelection
prospects in 2020
* House is unlikely to initiate impeachment; notes effort to
craft ACA repeal/replace that can get 50 Senate votes plus
Pence’s continues, as does work on FY2018 budget resolution, tax
reform

FTN (Jim Vogel)
* Sacking FBI Director Comey took the U.S. by surprise; optics
might be worse for overseas investors, with buying in UST
immediately after London open to erase Tuesday’s sell-off
* Equity futures aren’t “shaken or stirred” by the news,
however, leaving large domestic accounts to sort through the
fallout; both stocks and credit spreads are susceptible to
profit-taking
* Based on available information, firing Comey shouldn’t have
long-run implications for bond prices, as key economic questions
revolve around who puts their stamp on legislation – White
House, moderate Congressional Republicans, or Freedom Caucus
members; those dynamics were in place before FBI changes

BMO (Ian Lyngen, in phone interview)
* “It’s unclear whether this matters more than the last several
iterations of the Trump dysfunction, but it’s clear that this
adds another level of complexity beyond simply the Washington
gridlock”
* “I know the market is nervous about it, but I haven’t heard
anyone say that this is a material change in the way people are
thinking about the administration”
* “For the Fed, I don’t think this would take out a June hike,
unless there’s something really dramatic or unseen”
* In earlier note, BMO said the Treasury market benefited from
the political uncertainty triggered by Comey’s abrupt firing;
BMO cognizant that technical indicators are simply a reflection
of the risk-off move inspired by dismissal, but argues selloff
had extended to extremes that left it susceptible to headline-
driven reversal

RHINO TRADING PARTNERS (Michael Block)
* Puzzled by timing, though thinks will end up “going away”
* Sees Comey’s ouster as yet another distraction from progress
on public policy that could support economic growth
* “Every moment of every day that we have to hear about Trump
hiring lawyers to attack anyone who questions him on Russia,
Democrats screaming that this is a constitutional crisis, and
GOP flaks saying, ‘What about Hillary’s emails?’ is yet another
roadblock to getting tax reform and stimulus done”

TD SECURITIES (Gennadiy Goldberg, in email to Bloomberg)
* “We’ll have to see more of the fallout from the Comey firing
to gauge whether the broader legislative timeline has been
affected”
* Also worth keeping in mind about half of the FOMC hasn’t
penciled in any substantial fiscal stimulus into projections, so
tax reform and infrastructure spending are not necessarily
prerequisites for Fed to hike rates another 2 times this year

Related earlier stories:
* Equity Group’s Sam Zell on Bloomberg TV asks, ‘What Took Trump
So Long’ to Fire Comey? See video
** “Mr. Comey voluntarily or otherwise got himself involved in a
whole bunch of stuff. So he was a wounded animal to begin with
so the only question I’d ask is what took Trump so long?”
* Markets Should Forget Comey and Focus on Fundamentals: Macro
Man
* Comey Ouster Threatens to Backfire on Troubled Trump White
House
* Is This Trump’s Saturday Night Massacre? Don’t Count On It.
This president isn’t Nixon and Washington isn’t lined up against
him: Politico

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