5/28/2013 Daily US Cash Deficit

The US Daily Cash Surplus for 5/28/2013 was $4.2B bringing the May 2013 deficit to $118B with three business days remaining.

05-28-2013 USDD


Thanks to the surplus, cash edged up from $12B to $16B…still no signs of extraordinary measures, but as discussed yesterday, we should see it on Friday.


5/24/2013 Daily US Cash Deficit


The US Daily Cash Deficit for 5/24/2013 was $4.4B bringing the May 2013 deficit through 24 days to $122B bringing 2012 and 2013 into a virtual tie with four business days remaining. My baseline expectation is for 2013 revenue to grow by 12% and cost to be flat. but with four business days remaining in May, we see revenue up only 6%, with cost up 3%. I expect revenue to continue gaining ground over the final 4 days due to favorable timing. Cost is a bit of a surprise, but what’s a % or two? Expect a moderate surplus Tuesday followed by moderate deficits Wednesday and Thursday…Friday should be a large deficit…how large we will have to wait and see.

05-24-2013 USDD

Debt Limit/Cash Crash:

Cash fell another 4B down to $12B…quite a plunge from the 4/30 balance of $214B. No evidence of extraordinary measures yet, but expect it soon. Over the weekend I did some research and took a look at the last few debt limit battles. I discovered multiple instances of large single day cash infusions from “extraordinary measures” including $55B on 5/31/2011 and another $55B more recently on 1/31/2013. So…there is evidence that treasury can and will pull $50B or so out of its magic hat in time to avoid a default on the large cash draws expected 5/31 and 6/3. Hooray for Treasury….and their shady accountants!! Assuming we get through this gauntlet…and I think we have to assume that…expect moderate deficits throughout early June, with revenues seeing a sharp uptick around mid month. I have seen multiple articles say that the $60B Fannie infusion will be paid before 6/30….so if that pushes through, June could technically post a surplus in the $100B ballpark. Again…hooray for the shady government accountants!!


5/23/2013 Daily US Cash Deficit


The US Cash Deficit for 5/23/2013 was $7.0B bringing the May 2013 cash deficit through 23 days to $117B vs. $116B a year ago. With five business days to go, I suspect we will see some marginal improvement on the revenue front, but nothing impressive. On the cost side…it is a bit surprising that cost is up…I would have expected flat, or even down a % or so. Due to 6/1 being on a Saturday…quite a bit of June cost is going to get pulled into May 31….I’m just not sure how much. At first I was thinking $15-20B…Active duty salaries, military retirement, and a handful of other items that typically go out the first of the month. However, I think there is also a good chance that $15B+ of Medicare payments get pulled forward as well. I think my last estimate for the May deficit was $140B…I’m going to bump that up another 10 to $150B…with the qualifier that if the medicare payments get shifted…it could be $15-20B higher still. Whatever happens…if anyone remembers last month’s $117B surplus….it is now effectively gone 🙁

05-23-2013 USDD

Debt Limit:

Now…on to the pending debt limit battle. Everyone seems to be content to wait until after summer vacation to fight this battle. They may be right, but I need to point out that the “Cash Crash” continues…with the cash balance dropping another $9B to $16B yesterday after topping out at $214B on April 30th. Just for reference, $16B is about the average amount of outlays on a given day…average revenues so far in May are about $10B.

05-23-2013 USDD-Cash

So far…no sign of extraordinary measures, but if they don’t do something soon, there is no way they have the cash in hand next Friday to pay the bills. Between now and 6/3….they better find about $50B somewhere, or Congress’s summer vacation is going to be ruined. Of course…that makes me fairly confident they will pull it off, but as discussed yesterday, the fact that they are cutting it this close is very confusing to me.

5/22/2013 Daily US Cash Deficit

The US Cash Deficit for 5/22/2013 was $7.8B on the expected Social Security payments of $12.1B. This brings the May 2013 deficit through 22 days to $110B. This is $6B over where May 2012 was through 22 days, but you must take into account May 2012 was one day of the week behind 2013…thus While May 22 2013 is a Wednesday…May 22 2012 was a Tuesday. Tuesdays usually have light revenue, and of course The 2-4th round of Social Security payments are paid on Wednesdays, so we would expect 2012 to be a tad light on both revenues and outlays…more or less catching up tomorrow.

05-22-2013 USDD

On the cash side….cash is down another $6B to $25B…still no evidence of “extraordinary measures”. Note that next Friday May 31 will likely post a $25B+ deficit…with another $25B Monday June 3. They better get a move on….

05-22-2013 USDD-Cash

The above chart shows the US Daily Cash Balance from April 1 through Yesterday. Note the spike up over $200B at the end of April….followed by a plunge as we hit May. Now, I have to say…it seems unlikely to me that the Treasury won’t find a way to pull the rabbit out of its hat between now and June 3 and find a way to make the cash payments…likely through extraordinary measures.

However….for the life of me, I don’t understand why they are cutting it so close…when the expired debt limit law seemed to give them the flexibility to stock up on cash…instead they made a point…going out of their way to pay down debt before 5/19, and ended up with less than $40B cash in hand when the debt limit was locked down. I don’t know if they are incompetent, daredevils who have that much confidence in their forecasts, or…if they are planning to start threatening default much earlier than anyone else thinks…to force everyone to put their cards on the table and deal.