8/8/2013 Cash Deficit

The US Cash Deficit for 8/8/2013 was $6.2 bringing the August 2013 deficit through 8 days to $58B. Nothing out of the ordinary here…stay tuned for next week when we should receive a few small revenue bumps on corporate and excise taxes, and large outlays with ~$30B of interest expense and the second round of social security. After almost no deficit this week, we will probably end next week around to $100B for the month with 2 weeks remaining.

08-08-2013 USDD


8/7/2013 Cash Deficit

The Daily Cash Surplus for 8/7/2013 was $5.3B pushing the August 2013 deficit through one full week down to $52B.

08-07-2013 USDD

Revenues lost a bit of ground today…last August about $9B of revenues came from TARP payoffs….we’ve been averaging only $2B per month in 2013, and it won’t be long before that gets down to zero. We are back to -$12B…we need to be at +$20B by the end of the month. We could get there…I haven’t crunched the numbers, but it does seem like compared to last year, the month’s seem to start out weak and end strong. I don’t know what could be behind the evolving pattern, but it is definitely something to keep in mind this early in the month.

Outlays appear to be down quite a bit, but $12B of that is related to the timing of SS payments…2013’s round two won’t go out until next Wednesday 8/14…last years went out 8/8 (which is included…as discussed in the 8/1 USDD). Other than that…there is one less day, and given the end of month timing, outlays for August 2013 should come in $40B or more under last year

8/6/2013 Cash Deficit

The Daily Cash Deficit for 8/6/2013 was $3.0B pushing the August 2013 deficit through 6 days to $57B. Nothing out of the ordinary…typically low cash revenues…like we usually see on Tuesdays and Thursdays with moderate outlays.

08-06-2013 USDD

Compared to last year…the deficit is a bit lower and I expect it to stay that way. Aug 2012 went on to post a $211B deficit…I am only projecting $155B for this month on higher revenues, lower outlays, and timing.

July 2013 Monthly Statement Of Public Debt

I stumbled across this series a few months ago and have started digging into the July issue released yesterday to see if there is anything interesting. Well…interesting is probably not the right word…but I think you know what I mean.

The MSPD gives us some insight into the makeup of the public debt…giving us a summary  all of the outstanding debt…from the $40B of 1 month bills issued 7/25 at 0.02% to the $10.5B of 30 year bonds issued back in 1985 at 11.25%…a rate that is 562.5X higher than the current one month. That’s interesting right?

First…some thoughts. The treasury bills (0-12 months) are not particularly interesting at this point in time. The average rate on the $1.6T outstanding is less than 0.1%, and as discussed in a prior post….the interest paid annually on this is something like $1.5B. The rate paid could double, triple, or even grow 10X, and it would still more or less be a rounding error. So…I look at it, but until the rate gets up past 0.5% or so…it’s just not material. Why would anyone lend Uncle Sam $1.6T at effectively zero? I have no idea!!

Bonds… the 30 year securities…we don’t get a lot of movement here. They are only issued every 3 months, and none are due until 2015. The average rate on the $1.4T outstanding is around 6%, though the latest issue back on 5/15/2013 was at 2.88%. It will be interesting to see what the new August issues go for…looks like it may be over 3.5%. That’s a pretty big hike, but still well under the average of the bonds outstanding, including everything issued after 2011. Of the bonds expiring in the next 3 years, the average is about 10%…so rolling those into new bonds today would result in a reduction of annual interest expenses.(but who knows what they will be in 3 years)

Notes (2-10 years)… This is where all of the action is….we have notes expiring and being issued each and every month, and the balance…at $7.7T makes up 64% of the public debt outstanding. In July, we had $94B of notes expire. Since of course the US never actually pays off debt…they just roll it…it is interesting to see what is rolling off, and what it is being replaced with.

So… In July, we have a 2 year issued at 0.38% roll off…and we had two new 2 year issues…averaging 0.31%. √

A 3 year at 1% rolled off…and a new 3 year was issued at 0.63%. √

And… a 60 month at 3.38% rolled off…replaced by a 60 month at 1.38%…a big improvement. √

And this has been the story over the last 3 years or so. Debt outstanding is increasing at around $1T per year, but the interest rates are being driven down by Fed manipulation. So..in July 2011, the cash interest paid over the prior 12 months was $204B on 9.8T of public debt outstanding. 2 years later…the cash interest paid on 11.9T of public debt was only$218B. This could continue on for a few more years…even as rates have bounced off some extraordinary lows…they are still extremely low historically speaking.

8/5/2013 Cash Deficit

The Daily Cash Surplus for 8/5/2013 was $5.2B bringing the deficit through 5 days to $54B…right in line with 2012.

08-05-2013 USDD

Revenues picked up $3B…of the $31B they needed as of the last report to make it to +10%. I really don’t expect a lot of action until next week. Wednesday 8/14 round 2 of SS goes out and it looks like 8/15 has ~30B of interest payments due. But the main thing we should be looking at is revenues. I don’t expect a lot of uncertainty around outlays for the rest of the year…they will probably end the year down 1-2%..I don’t anticipate any large swings either way. Revenues… on the other hand…after a +15% to start the year (Jan-Apr)…have stepped down a notch to around 10%. Any further degradation of these YOY gains…say down to the 5% or do range is going to have a big effect on the 2014 deficit and beyond.