The One Clear Loser From the Comey Hearing

As always, our political commentary is non-partisan by design. We favor no politician or party and assess politics solely for its potential market impact.

Former FBI Director James Comey's public testimony to the Senate Intelligence Committee on Thursday, June 8, has a lot of folks speculating over who "won" and who "lost." Most of this speculation centers on Trump v. Comey, Republicans v. Democrats or John McCain v. late-night baseball.

But whatever your view of these things, the biggest loser is hiding in plain sight: It was the media, a factor that should help sentiment warm more as investors see through overly dark headlines.

This was Rachel Maddow possessing Trump tax returns on steroids: Major news organizations oversold the meeting, which promptly under-delivered. Outlets hyped the hearing as on par with the Watergate hearings, Iran-Contra, the McCarthy hearings and more.

All the major networks aired the hearing live, supplanting normal soap operas with this political one. The Washington Post called it a "summer blockbuster." CNN claimed it was Washington's "Super Bowl." To say the least, expectations were high, hence all those bars holding viewing parties across America. Yet rather than the Super Bowl, what we got was almost as anticlimactic as this year's NBA playoffs: Less a bombshell than a dud.

Comey's testimony basically summarized a list of things that were already common knowledge: He didn't really like Trump much; he typed memos documenting their meetings; Trump thought former National Security Adviser Michael Flynn was a "good guy" and "hoped" Comey could "see [his] way clear to letting this go, to letting Flynn go."

The last point is getting a lot of focus, yet we've known it since at least May 16. Comey also altered the language he used to describe the investigation into former Democratic presidential nominee Hillary Clinton's private e-mail server after meeting with then-Attorney General Loretta Lynch.

But that has been publicly known since last year. Heck, Comey already testified about it to Congress back in May. Senator Marco Rubio noted that of all the things Comey covered, "the only thing that's never been leaked is the fact that the president was not personally under investigation." Yet even that was already widely known, because Trump told the world on May 11.

But the damage to media wasn't just disappointing drama-seeking viewers. Comey himself took a shot at the press. As we noted yesterday, he pretty definitively declared a front-page article from the New York Times, published February 14, 2017, fake news. That article claimed "four current and former American officials" had informed reporters that the FBI and investigators had phone records connecting members of the Trump campaign with senior Russian intelligence officials. But as Comey put it:

In the main, it was not true. Again, all of you [Congresspeople] know this, maybe the American people don't. The challenge -- I'm not picking on reporters about writing stories about classified information. That people talking about it often don't really know what's going on and those of us who actually know what's going on are not talking about it, and we don't call the press to say, 'Hey, you got that thing wrong about this sensitive topic,' we just have to leave it there, mention the chairman and the nonsense about what influenced me to make the July 5th statement, nonsense. But I can't go explaining how it is nonsense.

For the record, the Times reporters are standing by their earlier work and noting Comey wasn't specific about what was so wrong with the piece. And we'll give them that. But he did say, "in the main," which suggests we aren't talking about a minor wrinkle. And, either way, the damage is done.

The media hyped a hearing all the major networks covered, only to have the star witness tell viewers one of America's pre-eminent news organizations wrote a partly, if not wholly, false front-page news column. In light of papers claiming to be a bulwark against fake news, this is a skosh problematic.

It's seems fairly clear the Comey saga amounts to yet another shot at media credibility, and that should lead more investors to either approach it skeptically or tune out altogether. There is a good side and bad side to this.

In the short run, we figure this should make folks tune out a persistently pessimistic media, get more confident and become more willing to bid stock prices up. But in the longer run, folks tuning out media could be how this bull market reaches a complacent or euphoric stage -- it may allow huge negatives to go unnoticed or underappreciated. We don't think that's the case now, but are keenly aware it may eventually be.

Fisher Investments is an independent, fee-only investment adviser serving investors globally. To learn more about Fisher Investments, please visit www.fisherinvestments.com.

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