President Donald Trump has been trumpeting the roaring stock market over the last weeks as evidence of the effectiveness of his policies -- in spite of the fact that he has yet to implement any economic legislation or pass any laws through Congress.
According to Vanity Fair's William D. Cohan, the stock market is in fact a bubble that's overdue for a significant "correction" -- an event that could sour the Republican Party on Trump even before Special Counsel Robert Mueller's investigation brings any charges or indictments.
Cohan wrote that the Dow Jones Industrial Average "is up around 20 percent since Election Day. With few other accomplishments to boast about, Trump is more than happy to take credit for the market’s rise."
However, the market is in fact actually moving slightly slower than it was this time last year and even so, it's under economic laws and conditions put in place by the Obama administration.
Wall Street, however, rendered giddy by Trump's promises of tax cuts, deregulation, repatriation of corporate profits, has decided, Cohan said, to ignore "the fact that Trump cannot get anything done, despite the Republican Party’s control of both chambers of Congress."
Furthermore, a reality check is coming as Republicans on Capitol Hill figure out that Trump's threats are mostly bluster and realize they can defy him with impunity.
Given that backdrop, "Trump is going to have a very hard time enacting any of his economic promises into laws that he can sign," Cohan wrote. "And when the market figures that out -- which shouldn’t be too long from now -- we are in for a huge correction, just in time for autumn, when for whatever reason, the market likes to get skittish."
That time frame could well coincide with indictments from one or more grand juries of Trump aides and campaign workers, adding more instability and volatility to the mix, two things that Wall Street is notoriously averse to.
Cohan said, "And it will mean that Trump, who fancies himself as a masterful businessman, will have to explain the stock market’s slide in peripatetic 140-character bursts just as the rest of his political world closes in on him. Even Trump, given all his bluster about marketing and optics, should be smart enough to know that the stock market has only one direction to go now that it’s cracked 22,000 -- and that’s down."