"Baby here we stand again
Where we've been so many times before
Even though you looked so sure
As I was watching you walking out my door
But you always walk back in like you did today
Acting like you never even went away
Well I don't know if I can
Open up and let you in baby
Here come those tears
Here come those tears again" – Jackson Browne
That's right it's Tuesday so the S&P must be testing the 10% line and last Tuesday we failed but the Tuesday before that we popped over so it's a real coin flip this morning.
Things are looking good so far because those 30M unemployed people are still getting their $600 WEEKLY bonus checks ($18Bn/week, $72Bn/month) and those will last until July 31st and that has kept the economy from totally collapsing and has kept Consumer Spending at reasonable levels at the Bottom 25% of wage earners are now outspending the Top 25% relative to where they were before the crisis.
Pumping an annualized $864Bn into bonus checks for the Unemployed is 5% of the GDP we're adding and that's making all those economic numbers look much better than they are, not to mention the base $15Bn a week of regular unemployment benerfits that are being handed out – that's another annualized $780Bn (4% of GDP).
Then we add in the $1,200 stimulus checks for 170M tax filers ($204Bn) and $500 for 50M dependents ($25Bn) and that's another $229Bn in Q2 is an annualized $916Bn (5% of GDP) so this economic bounce is here because we spent…