Likely Events

Listing possible events is one thing; determining realistic probabilities another. Of the list yesterday, I think two are likely (greater than 50/50): Trump will serve out his four-year term and a recession will occur by 2020. Here's my reasoning.

It is unlikely Trump will be impeached. The House has to be convinced that a crime has been committed. Of course, partisan politics plays a big part. It seems unlikely House Republicans have an interest in impeachment proceedings and a really big event would have to occur to change that. If Democrats take over the House in 2018, perhaps. Certainly a greater effort would be made to come up with proof. Conviction in the Senate is even harder (and has never happened).

A recession is likely. There has never been a decade since 1790 without a least one downturn (recession or depression). The economy has been rising since 2009, asset prices (especially stocks and real estate) are high by historic standards, leverage is high, and the Federal Reserve has shown no interest in putting on the brakes [note: by 2018 Fed is increasing short-term rates]. It takes some trigger event to set it off and and political volatility suggest any number of scenarios. Banking and any number of businesses like to tread in the danger zone, plus factors that set up the last couple of recessions are still around (complex derivatives, structured finance, special purpose vehicles, high executive compensation), plus the general euphoria expected before a crash. [Note: tariffs and the threat of a trade war are more recent concerns.]