After news broke of this weekend’s email controversy regarding FBI director James Comey’s letter to Congress suggesting that Hillary Clinton emails might be involved again in an ongoing investigation — this time over former-Representative Anthony Weiner’s alleged texting of underage girls — the market dipped almost a full percentage point.
Wall Street’s Fear Index also jumped to a one-month high. Whoops.
The market volatility was the result of fear that Donald Trump stood a slightly better chance of being elected president following the increased apprehension over Clinton’s legal problems revolving around her use of a private email server rather than a governmentally protected server during her tenure as Secretary of State.
Imagine what the market would do if Donald Trump actually gets elected.
The market, above all, values stability, and Donald Trump is unambiguously the more volatile candidate. There is nothing stable about Donald Trump when considering his plans to deport up to 11 million undocumented immigrants, rip up every international agreement America has ever signed, and sue anyone who criticizes him. If Donald Trump makes good on any of these promises, the ensuing national instability would likely result in serious economic damage to people’s desire to invest and people’s faith in the market’s growth. There certainly would be little reason for any foreign countries to invest in America, as one of Trump’s campaign hallmarks is the idea that America should start ripping off other countries.
Like the Brexit vote in Britain, no one knows what exactly the consequences will be if Trump is elected, but, like the Brexit aftermath, the aftermath of a Trump election will likely be economic self-destruction. Following the Brexit vote $2 trillion were lost, and the British pound hit a 31-year low. Yikes.
If you haven’t made up your mind yet about Election 2016, one reason to not vote for Trump is just to avoid the potential economic recession his election will likely provoke.
Picture courtesy of Marc Nozell.