Interesting, tho sensible, perspective.
Following the 2016 election, three professional basketball teams began publicly boycotting Trump, with the Milwaukee Bucks, Memphis Grizzlies, and Dallas Mavericks ceasing to use Trump hotels in New York City and Chicago. The Bucks is owned by billionaire investor and liberal donor Marc Lasry. Lasry is a personal friend of Bill Clinton, and heavily backed Hillary’s 2016 campaign.
Interestingly enough, Lasry is making headlines now for warning that the single biggest risk to the stock market is Democrats taking over Congress, and for praising the Trump economy.
“If Congress shifts, you’ll have more investigations. You’ll have more issues. And from a business standpoint, I think people will then step back,” the hedge fund manager told CNBC. “Congress today, they seem to be supporting pretty much anything President Trump does,” Lasry said. You could argue it back and forth — but for business, it’s good.” Lasry also argued that Trump’s trade actions against China and Europe will be short-lived.
The markets hate uncertainty more than anything else, and the faux investigations that Democrats are relentlessly pursuing certainly contribute to that. The witch hunt would only go on steroids with a Democrat-controlled Congress. Another possibility would be Democrats calling for impeachment, which Democrats would find any absurd excuse to promote. That too would cause turmoil for the markets, as was evidenced by past impeachment scandals. During the Watergate Scandal, after Archibald Cox and Attorney General Elliot Richardson resigned, the S&P 500 fell 14% from October 1st through November.
In the case of Bill Clinton’s impeachment proceedings, the S&P 500 tanked nearly 20% following the release of the Starr report.**
And to give a more relevant example, the Dow Jones Index dropped 370 points back in May 2017 when the media wrongly reported that Trump personally requested that former FBI director James Comey end the investigation into Michael Flynn’s non-existent Russian ties. Clearly, that was because it was the kind of move that could result in impeachment (but it didn’t actually happen).
Lasry said as an American he likes to see the economy do well, but as an investor, he’d “like a little more chaos.” A CNBC host interjected and cited Brazil as a country that has the “chaos” Lasry desires, and Lasry agreed (indicating he wasn’t specifically speaking about U.S. markets). Lasry’s firm Avenue Capital specializes in distressed assets (hence why chaos is on his mind) and manages nearly $10 billion in investor dollars.
Lasry’s comments come as an obvious surprise, given his past donations to Democrats. In 2015 Forbes Magazine put Lasry on their list of the most influential political donors, citing his role as “megadonor” for President Obama and President Clinton (and later Hillary). Lasry also employed Chelsea Clinton from 2006-2009.
While it’s doubtful that Lasry’s ideological leanings have changed, it’s a good sign when even a billionaire Democrat donor can’t deny the strength of the Trump economy. It’s because of that strength it’s doubtful Democrats will be able to retake Congress in the first place. Lasry is so partisan, that he would rather see the American economy in turmoil if it means a Democrat victory in November. Hopefully, the American people won’t let that happen.