As with all political issues involving legal technicalities, the reality of the situation is a lot more complicated than what the fervent followers of either side of the political spectrum might like.

But, given that it might have some impact on the markets, it behooves us traders to try to untangle this knot a bit.

So let’s see what could happen as opposed to what should happen.

An Important Point of Order

Over the coming weeks, we’ll hear a lot about the trial in the Senate, and the potential for conviction.

That might put a lot of people in the mind of typical criminal trials where if found guilty, the defendant goes to jail.

However, in an impeachment trial, the question being discussed is whether the (former) President is to be removed from office. Then there is a second part where the Senate debates whether he should be barred from serving in a public office again.

Neither one of those situations lead to jail.

Jurists generally agree that the President can’t be sued for civil liability while in office. However, he is not immune from criminal liability.

That said, that disappears the minute Trump is out of office. So impeaching him has no effect on whether or not he could be charged with crimes as a citizen.

It is fundamentally a political action. Criminal proceedings are left up to the courts

Impeachment is not a crime

Generally, the consensus is that a civil official is impeached, and then stands trial in front of the judiciary for whatever crime they are accused of.

This is the situation of the prime case being used as a precedent to impeach Trump after he left office: William Belknap.

Belknap was impeached on corruption charges. And, after trial in the Senate, he was indicted by a grand jury. It was not up to the Senate to send him to jail.

It’s also important to differentiate between civil and criminal liabilities.

Generally, civil suits lead to fines and monetary restitution. Criminal cases lead to jail.

Most of Trump’s legal troubles involve primarily civil suits, such as accusations of sexual assault.

What is a crime, and could lead to imprisonment, is the charge of incitement to riot. But, lawyers are divided along political lines as to whether that would actually hold up in court.

Note: in court. Not in the Senate.

So, in theory, it is possible that Trump could go to jail, but not directly as a result of the upcoming Senate trial.

It would depend entirely on evidence that would be brought up in a subsequent trial. And we have no way of knowing what that could be.

And the Markets?

Two-thirds of the Senate needs to vote in favor of Trump to be convicted. This is not a situation where Vice President Harris gets to cast the tie-breaking vote.

That means that 17 Republicans would have to vote to convict Trump, a relatively unlikely scenario.

But, even if Trump is acquitted by the Senate, it doesn’t mean that he can’t be charged by the Attorney General of Washington DC, Southern District of New York, and Manhattan, all three of which are looking for reasons to indict him.

Generally, the markets are likely pricing in a party-line vote that would once again acquit Trump.

Should enough Republicans vote to convict, it could have important electoral implications and might shake up the markets a bit.

Trump will likely make a vigorous defense. In fact, he could even bring up issues that might disturb the markets.

On the other hand, there are many analysts who point to Pelosi not having sent the articles of impeachment to the Senate. There is the suggestion that the Biden Administration might use the pending trial as a bargaining chip with Republicans to get more concessions on the Stimulus Bill.

More government spending might support the stock market, and drag down the dollar.