If another stimulus doesn't come, he expects state and local governments will slash payrolls and raise taxes and small business won't get as much credit. He says that when stimulus goes away, it becomes an economic drag. Essentially, it's a hole that needs to be filled this year and into early next. The economy is too fragile to do without it.
Regarding extending unemployment benefits, Zandi says some workers may be taking advantage of the benefits, but the vast majority are really hard pressed. If unemployment benefits aren't extending for those individuals, they will cut their spending and the economy will take another hit.
With the Bush tax cuts expiring next year, Zandi expects the cuts to be extended. In a few years, the upper 2% of the most wealthy Americans will likely see tax hikes.
Zandi thinks the markets won't have a double-dip recession. He hopes the government will spend money on services and tax cuts to ensure a double-dip doesn't happen.
Click here to see the complete interview with Zandi.
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Trader disclosure: On July 6, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Pete Najarian Owns (CRUS) Call Spreads; Pete Najarian owns (AKAM) call spreads; Pete Najarian owns (GNW); Seymour owns (AAPL), (BAC), (GOOG), (INTC), (POT); Kelly owns (BP) puts; Kelly owns (FCX) puts; Kelly owns (GLD); Kelly owns (GDXJ); Kelly is short (GS); Terranova owns (MON), (AGU), (KO), (XOM), (TEVA), (RDS.A), (GMCR), (UPL), (GS); Terranova owns (GLD) July 123 puts; Terranova owns (GS) JULY 130 CALLS; Terranova owns (GS) JULY 135 CALLS; Terranova is short gold
For Tim Seymour:
Seygem Owns (WBD)
For JoeTerranova
Terranova works for (VRTS)
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners owns more than 1% of (CASS)
Virtus Investment Partners owns more than 1% of (LDR)
Virtus Investment Partners owns more than 1% of (LPHI)
Virtus Investment Partners owns more than 1% of (MGRC)
Virtus Investment Partners owns more than 1% of (XLB)
Virtus Investment Partners owns more than 1% of (XLP)
Virtus Investment Partners owns more than 1% of (XLY)
Virtus Investment Partners owns more than 1% of (XLI)
Virtus Investment Partners owns more than 1% of (XLK)
Virtus Investment Partners owns more than 1% of (XLU)
Virtus Investment Partners owns more than 1% of (SUBK)
Virtus Investment Partners owns more than 1% of (WDFC)
Virtus Investment Partners owns more than 1% of (YDNT)
Virtus Investment Partners owns more than 1% of (DRYS)
For Anthony Scaramucci
Scaramucci and SkyBridge Capital own (BAC)
Scaramucci and SkyBridge Capital own (BP)
Scaramucci and SkyBridge Capital own (C)
Scaramucci and SkyBridge Capital own (GOOG)
Scaramucci and SkyBridge Capital own (GS)
For Brian Kelly
Accounts managed by Kanundrum Capital own (AUY)
Accounts managed by Kanundrum Capital own (GFI)
Accounts managed by Kanundrum Capital own Gold
Accounts managed by Kanundrum Capital own Treasuries
Accounts managed by Kanundrum Capital own US Dollars
Accounts managed by Kanundrum Capital is short (AMZN)
Accounts managed by Kanundrum Capital is short (RCL)
Accounts managed by Kanundrum Capital is short (XLY)
Accounts managed by Kanundrum Capital is short (XLE)
Accounts managed by Kanundrum Capital is short (AFL)
Accounts managed by Kanundrum Capital is short (CME)
Accounts managed by Kanundrum Capital is short (EWI)
Accounts managed by Kanundrum Capital is short (EWO)
Accounts managed by Kanundrum Capital is short (GS)
Accounts managed by Kanundrum Capital is short (HIG)
Accounts managed by Kanundrum Capital is short (RKH)
Accounts managed by Kanundrum Capital is short (XLF)
Accounts managed by Kanundrum Capital is short (XLI)
Accounts managed by Kanundrum Capital is short (FCX
Accounts managed by Kanundrum Capital is short (GFI)
Accounts managed by Kanundrum Capital is short (JOYG)
Accounts managed by Kanundrum Capital is short (XLB)
Accounts managed by Kanundrum Capital is short (XLK)
Accounts managed by Kanundrum Capital is short (V)
Accounts managed by Kanundrum Capital is short (PCAR)
Accounts managed by Kanundrum Capital is short (COF)
Accounts managed by Kanundrum Capital is short (KMX)
Deborah Weinswig
Employees Of Citi Own (WMT), (JCP)
An Employee Of Citigroup Global Markets Or Affiliates Is A Trustee Of (TGT) Citigroup Global Markets Or Affiliates Owns 1% Or More Of (SKS) Citigroup Global Markets Or Affiliates Has Managed Or Co-Managed An Offering Of (DG), (KR), (WMT) In Past 12 Months Citigroup Global Markets Or Affiliates Has Received Investment Banking Compensation For Services Provided In Past 12 Months From (DG), (KR), (SKS), (SVU), (TGT), (WMT) Citigroup Global Markets Or Affiliates Expects To Receive/Seek Investment Banking Compensation From (WMT) In Next 3 Months Citigroup Global Markets Or Affiliate Received Non-Investment Banking Compensation From (HD), (JCP), (KSS), (KR), (M), (SWY), (SVU), (TGT), (WAG), (WMT), (COST) In Past 12 Months (DG), (KR), (SKS), (SVU), (TGT), (WMT) Are Or In Past 12 Months Were Investment Banking Clients Of Citigroup Global Markets (CVS), (DG), (HD), (JCP), (KSS), (KR), (M), (SWY), (SKS), (SVU), (TGT), (WAG), (WMT), (COST) Are Or In Past 12 Months Were Clients Of Citigroup Global Markets (Non-Investment Banking, Securities-Related Services) (HD), (JCP), (KSS), (KR), (M), (SWY), (SVU), (TGT), (WAG), (WMT), (COST) Are Or In Past 12 Months Were Clients Of Citigroup Global Markets (Non-Investment Banking, Non-Securities Related) Citigroup Global Markets Or Affiliate Received Compensation From (DG) In Past 12 Months Citigroup Global Markets Is A Market Maker In (CVS), (M), (COST) Citigroup Global Markets And/Or Affiliates Has A Significant Financial Interest In Relation To (HD), (JCP), (KR), (LOW), (M), (JWN), (SWY), (SVU), (TGT), (WMT), (COST) Citigroup Global Markets Or Affiliates Owns 5% Or More Of (SKS)
Doug Kass
**No Disclosures**
Mark Zandi
**No Disclosures**
David Riedel
**No Disclosures**
Scott Nations
**No Disclosures**
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