By Tyler Durden | 29 June 2020
ZERO HEDGE — One look at the latest economic data, conveniently summarized by the exploding Citi US econ surprise index, should be sufficient to convince most that the US is well and truly following a V-shaped recovery path.
Alas, nothing could be further from the truth because the current economic sugar rush is almost entirely a function of the massive government spending spree, a spree which in just over a month will be effectively over. As a result, as Bank of America writes, the economy is facing fiscal cliffs which could cause the recovery to disintegrate, with four particular areas of focus:
- expiration of extended unemployment insurance,
- the fading support from stimulus checks,
- exhaustion of PPP
- stress from state and local aid gov’ts.
In response, BofA expects another stimulus bill to be passed in late July to address some – but not all – of these concerns, and “instead of a cliff, we will likely be facing a hill.” That may be optimistic, because any stimulus would need to be bipartisan, and if the Democrats wish to crush Trump’s re-election chances, now is the time for them to push the economy into a depression with elections in just 4 months. […]