The Great Unbundling
One of the most interesting trends today is the great unbundling of business and politics.
On the same day that the President of the United States became an unindicted criminal co-conspirator, the S&P reached its all-time high.
In the past year-plus, the United States government — driven by the executive authority — has made sharp changes on a staggering number of global issues: Iranian nuclear deal, TTP, NAFTA, trade wars, the Paris Accord, and many others.
Historically, these types of significant policy changes, in addition to a barely functional political system, would have created considerable uncertainty. This uncertainty, in turn, would have slowed down trade, investment, and economic activity.
In other words, politics would have directly and negatively impacted the economy. An entire industry — “geopolitical risk” — exists to help businesses navigate this tension.
Today, the opposite is true.
Despite unprecedented political chaos, America’s economy is humming:
- Unemployment is below 4%
- Job growth is at an all-time high
- Apple reached a trillion dollar market cap
- Economic growth topped 4%
No one knows if this economic trend will hold. If the United States attacks Iran, or doubles down on its trade war with China, or engages in a nuclear stand-off with North Korea, the markets may respond swiftly and severely.
Or they may continue to hum.
Either way, people’s wallets and reputations will either be up or down.
