Height Securities Begins Contemplating "Impeachment": Here's What To Look For

After the latest diplomatic scandal involving Donald Trump, which unleashed a frenzy of allegations that Trump is either a traitor or too dumb to govern for sharing allegedly confidential data to the Russian foreign minister, the angry response by Democrats - many of whom now demand hearings, transcripts, or worse - was predictable. What was unexpected was the loud criticism by some very prominent republican senators.

Earlier today, Sen. John McCain said that allegations Trump shared highly classified information with top Russian officials are "deeply disturbing," and added that "regrettably, the time President Trump spent sharing sensitive information with the Russians was time he did not spend focusing on Russia’s aggressive behavior, including its interference in American and European elections, its illegal invasion of Ukraine and annexation of Crimea, its other destabilizing activities across Europe, and the slaughter of innocent civilians and targeting of hospitals in Syria," he said.

He was not alone, joining other Republicans who voiced similar criticism about Trump's actions in the Oval Office. One was Sen. Susan Collins who said earlier Tuesday that the Senate Intelligence Committee needs to be briefed on the report.  Sen. Ben Sasse told MSNBC that "It's not helpful that this was with the Russians, right? I mean this is just weird."

Senator Bob Corker was even more blunt, saying the White House is "in a downward spiral right now and have got to figure out a way to come to grips with all that's happening. You know, the shame of it is there's a really good national security team in place and there are good productive things that are under way through them and through others, but the chaos that is being created by the lack of discipline is creating an environment — it creates a worrisome environment."

It was the harsh Republican response that prompted Height Securities’ Peter Cohn to write a note to clients on Tuesday that Trump's recent conduct "raises questions for investors about whether senior Republicans will abandon ship."

Cutting to the chase, Cohn writes that ending Trump’s viability as president "depends on Republicans turning against him", as impeachment proceedings can only begin with the majority party, and the 25th Amendment (allowing for president’s removal when unable to discharge powers/duties of his office) can only be invoked by Congress and/or vice president, majority of Cabinet.

What will Height be closely watching to see if the Trump drama enters a potentially terminal phase: the main catalyst is whether Sen. John McCain, chairman of Armed Services Committee, begins calling for Trump’s resignation, as U.S. national security issues may increase concern among Republican voters.

Cohn also says to closely watch other senators for even a faint trace of statements and speeches that can be parsed for any signs of throwing Trump "under the bus" as these will be a trial balloon for group sentiment toward Trump.

That said, The Height analyst sees immediate fallout on domestic policy agenda as limited for now as the issues raised by Trump’s "cavalier" disclosures are separate and unrelated to tax reform and Obamacare repeal/replace, which have represented Republican agenda for years prior to Trump’s candidacy and it is unlikely they’d abandon measures because of unrelated grievances about Trump’s handling of national security matters.

Should republicans increasingly voice displeasure with Trump, however, it will be a different story.