The early signs suggest traders think the chance of trouble is higher this year, and it isn’t hard to see why. Many high-profile investors have warned of the dangers posed by a capricious president, with Bridgewater Associates’ Ray Dalio this week warning (again) that politics meant the U.S. was headed for 1937-style postcrisis problems. When politics goes wrong, bad things can happen.

Extreme volatility in the markets can be an over-reaction to political risks — or promises. “Investors who put money on the policies of Mr. Trump at the end of last year have been sorely disappointed this year, as bets on tax cuts and trade restrictions unwound.” But in the case of Trump, caution may be warranted. The president recklessly and irrationality is creating a stand-off, which he may view as politically advantageous but would be economically dangerous. There is no guarantee that this president — or the equally destructive Freedom Caucus — will pull back from the brink.

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One credit agency is already sounding a warning:

In other words, Trump could preside over a mini-disaster or a huge one. “Shutting down the government over the border wall is stupid,” former car czar Steven Rattner tells me. “Breaching the debt ceiling over anything is insane. At least Mitch McConnell and Paul Ryan are thinking clearly.” This is all a far cry from what the business community expected.

The unrealistic promise that Trump would be a master negotiator and pro-business advocate created unrealistic expectations — a stock market bubble, which Trump cited as proof of his own success. Now Trump’s erratic behavior — complete with new threats about a shutdown and new recriminations that Republicans didn’t tie the debt increase to the Veterans Administration bill — may erase those fanciful expectations.

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