'The markets are not thinking about it yet' — BlackRock boss Larry Fink reportedly expects political turmoil in 2020

• BlackRock CEO Larry Fink is reportedly worried about political instability in 2020, and doesn’t view investors as awake to the risks.
• Political scientist Ian Bremmer told Fink his theory: If Democrats try and fail to convict Trump, the party that loses next year’s election is likely to question its legitimacy, and Congress could grind to a halt.
• Bremmer said that Fink replied, “I absolutely agree with those concerns. The markets are not thinking about it yet.”
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BlackRock CEO Larry Fink is reportedly worried about political instability in 2020, and doesn’t view investors as awake to the risks.

Ian Bremmer – a political scientist and the president of the Eurasia Group, a political-risk consultancy – said the boss of the asset-management titan shared his fears of a constitutional crisis next year.

“I was with Larry Fink – client, friend – a couple of weeks ago, who is asking me what worried me the most,” Bremmer said at First Republic Bank’s investor day this month.

Bremmer told Fink his theory: If Democrats try and fail to convict Trump, the party that loses next year’s election is likely to question its legitimacy, and Congress could grind to a halt. “He said, ‘I absolutely agree with those concerns. The markets are not thinking about it yet.'”

Bremmer laid out his thought process at the investor day.

The “overwhelmingly likely outcome” of the current impeachment inquiry is that Trump is impeached in the House but not convicted in the Senate, he said. Armed with that result, Trump runs for reelection and “feels empowered to continue to abuse power in ways that he had involving Ukraine and Biden and all the rest,” Bremmer continued.

“It’s worse than non-impeachment or not holding impeachment hearings because it means that there are many people that will feel that the 2020 elections are themselves not legitimate,” Bremmer said.

Bremmer predicted people will file lawsuits if they suspect the election is vulnerable to foreign interference and Trump thinks he can recruit outside help without legal repercussions. There could also be calls to boycott the election, and Sen. Bernie Sanders and his supporters could amplify them if he doesn’t secure the Democratic nomination, Bremmer said.

“There is a reasonable likelihood in 2020 that you’ll have a short period of time where a constitutional crisis occurs,” Bremmer said. “Not martial law, not troops in the streets, but a feeling that the election itself is not legitimate and, therefore, the outcome should not be recognised as such by whoever lost.”

He explained that if Trump loses, he’s likely to dismiss the result as rigged, and if his Democratic opponent loses, they might blame foreign intervention. Either way, political turmoil could be the outcome.

“For a few months, you can imagine Congress refusing to play ball on things like getting stuff funded, working on a day-to-day basis,” Bremmer said.

“A general congressional strike in this environment, with the global economy deteriorating, is a significant risk in 2020 in a way that US domestic risk in 22 years, since I started Eurasia Group, has never been significant.”