On the Cohen Plea Deal

US stocks made all-time highs, as we had expected, and then the Manafort verdict and the Cohen plea hit the tape. Cohen for the first time connects Trump with a crime. That will be portrayed by his detractors as a proven fact, but it's just an allegation by way of Cohen's testimony, which Trump can discredit. At first blush we don't think this will have a lot of impact on the public. It's no surprise that Trump is a philanderer. It's easy to sympathize with his having to pay blackmail -- which is not the same thing as trying to "influence the election." Trump is accused of the same crime as Clinton in his impeachment: lying about sex, a peripheral matter stumbled upon by a special counsel who couldn't come up with anything substantive. We don't know what else Cohen might say, but if he had a lot to offer, he would have immunity by now. The proximate risk for markets is what Trump might do to control the news cycle, although it may also represent a window of opportunity for China to resolve the present trade dispute on more favorable terms.