Aside from the State of the Union address, something else is...

Aside from the State of the Union address, something else is rearing its head this week. Markets have feigned indifference to it but it may influence things in the coming weeks and months.

Lurking beneath other potentially market moving undercurrents is a problem that transcends the political and threatens our fraternity, national security and the caliber of our political discourse. In the US, trust in our federal law-enforcement and intelligence institutions is being diminished in an unprecedented way. Similar things are going on in Australia and of course in Europe. I don't use the word unprecedented lightly. Selfish politicians are helping some particular enemies of the west to cause ** within more naive segments of the population. It was going on before our recent elections, but not since the Cold War have we seen such potential for problems of this nature.

How this will affect our markets in the near term remains to be seen. The politicians of the day know that Wall Street and Americans are governed by their perceptions of the economy and of promised economic success more than they are preconceptions about the integrity of the institutions that protect the west - and ultimately our capital markets - from turmoil.