Felonious Friday – Mr. Trump Goes Back to New York

What an exciting day!  

On top of all the economic data coming in we have Donald Trump going out – in cuffs!  It’s very telling when you tell the average person that Donald Trump is being indicted and they say “for what?” – it’s a long list of possibilities but this one is about paying a porn star to keep silent about his affair with her and THEN covering it up.  

The timeline, according to Shel-Bot, was:

• • ⊗In 2006, Trump allegedly had a sexual encounter with Stormy Daniels, an adult film star, at a celebrity golf tournament in Nevada¹. Trump was married to Melania at the time and their son had recently been born¹.
  • In October 2016, shortly before the presidential election, Trump’s former lawyer Michael Cohen arranged a $130,000 payment to Daniels in exchange for her signing a nondisclosure agreement to prevent her from discussing the alleged affair²¹.
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  • In January 2018, The Wall Street Journal reported the existence of the payment and the nondisclosure agreement³. Trump denied having an affair with Daniels but changed his story regarding the payment as events unfolded³.
• • In February 2018, Cohen said he paid Daniels using his own money and was not directed by Trump’s company or campaign to make the payment. He said Trump never reimbursed him for the payment². Cohen would later contradict both statements under oath, stating Trump did in fact direct him to make the payment and reimbursed him².
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  • In April 2018, Trump, when asked by reporters if he knew about the payment to Daniels, responded, “No.” Asked why Cohen made the payment, Trump said, “You’ll have to ask Michael Cohen.”²
  • In May 2018, in an ethics disclosure, Trump acknowledged reimbursing Cohen for the $130,000 paid for Daniels².
  • In August 2018, Cohen pleaded guilty to criminal charges in Manhattan federal court, including campaign finance violations over the hush money payments. He testified that Trump directed him to make the payments “for the principal purpose of influencing the election.”² In their indictment of Cohen, prosecutors said a candidate for federal office referred to as “Individual-1” arranged the payments. Trump was not charged with a crime².
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  • In March 2023, Manhattan prosecutors investigating Trump’s alleged role in the hush money payment scheme invited him to testify in the probe, a step that commonly comes before an indictment in New York³. Trump’s attorney said he had no plans to participate in the probe and denounced it as a witch hunt³.
  • In March 2023, a New York grand jury indicted Trump on allegations linked to a business records investigation related to the hush money payment made to Daniels³. The indictment remains under seal and will be announced in the coming days³.

The events that are considered a crime and why:

• • The $130,000 payment to Daniels: This could be considered an illegal campaign contribution because it exceeded the legal limit of $2,700 and was not reported to the Federal Election Commission. It could also be considered an attempt to influence the outcome of the election by concealing potentially damaging information from voters².
  • The reimbursement of Cohen by Trump: This could be considered an illegal campaign expenditure because it was not reported to the Federal Election Commission and was made for the purpose of influencing the election. It could also be considered a cover-up of the original payment and an admission of guilt by Trump².
  • The falsification of business records by Trump: This could be considered a felony charge because it involved making false entries in the books and records of his company to conceal the reimbursement of Cohen and disguise it as a legal expense. It could also be considered fraud and tax evasion by Trump⁴.

Other pending investigations most likely to lead to additional criminal charges are:

• • In Atlanta, Georgia, Trump is under investigation by the Fulton County District Attorney’s Office for his attempts to overturn the state’s election results. He is accused of soliciting election fraud, making false statements, conspiracy, racketeering and violating his oath of office¹.
  • In Washington, D.C., Trump is under investigation by the U.S. Department of Justice for his role in inciting the violent insurrection at the U.S. Capitol on January 6, 2021. He is accused of obstructing an official proceeding, seditious conspiracy, aiding and abetting and other federal crimes¹.
  • In New York City, Trump is under investigation by the New York Attorney General’s Office for his business practices and financial dealings. He is accused of fraud, tax evasion, money laundering and other civil and criminal violations².

8:30 Update:  PCE came in LOWER than expected at 0.3% vs 0.6% last month and Core Prices are 0.3% as well, down from 0.5% so everything is “fixed“, I guess.  If you say “I haven’t seen prices coming down”, well that’s not the thing – they are still up 0.3% from the prior month but the pace is slowing so we’re keeping the 6.4% from last year and adding 0.9% so far in Jan and Feb.

Perhaps that’s why Personal Spending is only up 0.2% and that is down from 2% in Jan – a MASSIVE drop and, since Consumer Spending is 60% of the Economy – you would think that would spook the market but it will fixate on lower inflation and we should stay high into the end of the month.  

Personal Income was up 0.3%, down from 0.6% last month and that is great news for our Corporate Masters – as was the $2Tn banking bailout this month – so there are plenty of reasons for the market to be happy as Q1 draws to a close.  We’ll see how Consumer Sentiment looks at 10 am. 

Have a great weekend, 

• • Phil