Sinical

Cycles govern much of our world.  The Beatles taught us that when the sun moves lower in the sky for a portion of the year we shouldn’t fret about the cold lasting forever.  Economies also ebb and flow as the business cycle moves from periods of expansion into usually relatively short intervals of contraction.  Even breathing is cyclical. 

News also cycles.  And there’s a story beginning to rise like the sun on the eastern horizon.  We’ve seen it before, and we’ll likely see it again after the next iteration sets.  It’s the debt ceiling.  Prior to the coronavirus pandemic, a deal was struck by Congress to suspend the nation’s borrowing capacity, but that suspension ends on July 31.  In the past, the Treasury has been able to use extraordinary measures (think sleight of hand) to keep the lights on while the two chambers hammer out the budgetary details before ultimately raising the borrowing limit. 

This is not a new phenomenon.  Since 1960, Congress has acted 78 times to increase the country’s debt capacity.  This should mean the odds are favorable for it happening for a 79^th repetition.  Nevertheless, look for headlines in the coming weeks and months as the end of the third quarter draws closer.  While we think the chances of economic impending devastation are infinitesimal, Atlas still expects stories of looming default-related catastrophes as the deadline approaches.  Afterall, nothing solicits a click like headlines suggesting we’re on a road to ruin.

This period has been like a long cold lonely winter.  Ice is slowly melting, and smiles should be returning to the faces (even if they’re still beneath masks).  Don’t let headlines get you down.  It’s all right.  Here comes the sun, do, do, do, do.