It still seems unlikely that Donald Trump will be impeached, but talk of it is suddenly in the air in a way it wasn’t a week ago.
Equity markets are weaker on the possibility, the gold price is rising, and where just a week ago this column talked of the becalmed nature of the VIX index of volatility, this week it jumped by more than 50%.
In one sense, not much.
Donald Trump is still being Donald Trump – if you’re a Democrat he’s blundering around, if you’re a Trump-supporting Republican he’s shooting from the hip.
Either way he was elected partly on the basis of his inexperience of Washington politics and if that inexperience occasionally comes back to bite him and the US political establishment, it can hardly be called out as a surprise.
Similarly if Trump’s his press secretary argues with the world’s media about whether he was hiding “in” bushes or “among” them or his wider communications team directly contradicts what the he says in regard to staffing issues, it can all be largely be put down to inexperience.
It may be arguable whether you want inexperienced people in the most powerful office in the most powerful country in the world. But it’s not illegal.
It is, however, illegal to interfere with the due process of the law, and that is an accusation Trump has now been tarred with, following revelations he tried to get the FBI boss he’s now fired to stop investigating a senior Trump official, he’s also now fired.
To interfere with an FBI investigation is, technically, is an impeachable offence, and US media have made much play of Republican comments that, if the accusations were proved true, impeachment would indeed be called for.
Late night talk show hosts meanwhile, have been enjoying denials on Twitter from representatives of President Nixon’s Presidential Library that the two Presidents are in any way comparable. On the Late Show, Stephen Colbert conceded the difference: “Nixon at least attempted a cover-up,” he said.
He then offered a slightly different perspective on Trump’s recent sharing in the Oval office of classified information with senior Russian diplomats: “The good news: Trump is finally telling the truth; the bad news: it’s only to high-ranking Russian officials.”
All is not lost for Trump, though.
The Russians may have meddled in online opinion-making during the US Presidential election, but direct collusion with the Trump camp will be harder to prove.
He’s shaken off sexual, political and financial scandal before. Espionage and obstruction of justice may become just two more varieties to add to the list.
But even so, it still matters for markets.
Equity indexes around the world, from the UK to India to the US itself have been riding high since Trump’s election. Yet the troubles with the FBI, the speculation about impeachment, and the general impression of a President distracted by the pressures of the job, are creating a changed context.
Daily commentary from spread-betting companies gives a clear indication of this as they reach out to customers who will place bets on the consequences.
“Calls for President Trump to be impeached are growing louder and that has created a long overdue sense of fear in markets,” said Jasper Lawler of London Capital Group.
“Trump troubles traumatise traders,” wrote Chris Beauchamp of IG. “Fresh bad news for the White House emerges daily now, and it may finally be having something of an impact on Wall Street.”
David Madden at CMC Markets added his fuel to the fire: “The row between Mr Trump and the FBI is still on traders’ minds and while this is hanging over the market I can’t see sentiment changing anytime soon,” he wrote.
Of course, it’s not the credibility of the office of US President that’s really worrying the markets. Rather, it’s the likely distraction that all these threats to Trump’s ability to hold office will create.
The markets soared on Trump’s promises of a major stimulus package. Already, that looks like it will be a hard sell to Congress.
But if the President is unable to focus because the FBI, the Special Prosecutor, the media and even some in his own party are on his tail, then it looks dead in the water.
And if that’s the case, some of the major assumptions underlying the latest rallies might have to be revisited in a major way. Already, the dollar has weakened, the pound has gone through US$1.30 for the first time since September and gold has risen by US$30. It may yet go higher.