2026: Trump's bad year?
I make the bear-case outcome moderately likely in 2026, at about 58%, because Trump is facing a growing stack of high-salience legal and institutional reversals rather than a single isolated controversy. The market’s 13% Yes price looks far too low if the event is defined as meaningful negative developments occurring during the year.
Analysis
The strongest reason to favor Yes is that 2026 already contains multiple concrete bear-case catalysts: the monument reductions are large, controversial, and likely to be litigated; the Supreme Court has already blocked one Trump personnel move; and other actions are generating fresh legal friction. That matters because this event does not require one dramatic collapse, only that the bear case for Trump occurs in 2026, and the available reporting suggests a pattern of escalating institutional resistance rather than a quiet political environment.
The main reason to avoid an even higher probability is that several of the biggest items are still pending rather than resolved. The monument cuts may be challenged in court, but legal challenge alone does not guarantee a decisive loss, and the grizzly-bear proposal is more a policy fight than a clear setback. In other words, the bear case is real, but some of the cited developments are inputs to a negative narrative rather than final outcomes.
Relative to the market, 13% looks very low. A Yes outcome does not require Trump to be electorally doomed or historically disgraced; it only requires that the bear-case narrative meaningfully materialize in 2026, which is already happening through visible litigation, judicial pushback, and controversial executive action. The most plausible explanation for the gap is that the market is pricing the event as needing a more extreme, singular collapse than the news context suggests.
Arguments
For
- Arguments for Yes: The monument reductions are dramatic enough to trigger immediate opposition and likely litigation.
- Arguments for Yes: The Supreme Court and other courts have already shown willingness to constrain Trump in 2026.
Against
- Arguments against Yes: Court challenges may drag on without producing a clear headline defeat within 2026.
- Arguments against Yes: Some cited developments are controversial but not necessarily dispositive evidence of a true bear-case event.
Key drivers
- Large, legally vulnerable monument cuts create a high-probability source of backlash.
- Court resistance and ongoing lawsuits make 2026 a year of visible institutional friction.
Risk factors
- The biggest controversies may remain unresolved by year-end, limiting how strongly the bear case is seen as having 'occurred.'
- Some actions, especially on grizzly bears, could be framed as policy adjustments rather than setbacks for Trump.
Scenarios
Best case
Trump faces a sequence of high-profile legal and institutional defeats in 2026, with the monument cuts stalled or narrowed by courts and additional rulings reinforcing a narrative of overreach.
Most likely
Trump continues to generate recurring legal and political controversy in 2026, with at least one major fight becoming a visible setback, but without a single catastrophic event dominating the year.
Worst case
The legal challenges fail to produce major setbacks, the monument actions stand, and the year is remembered more for aggressive governing than for a genuine bear-case turn.
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