US Daily Cash Deficit 12/4/2013

The US Daily Cash Surplus for Wednesday 12/4/2013 was $3.8B bringing the December 2013 cash deficit through 4 days to $27B…$6B over where 2012 was at this point.

12-04-2013 USDD

No real action to note yesterday…revenues gained a bit over 2012 and outlays were down about $1B.  Expect moderate surpluses and deficits through next week followed by a surge in revenues between 12/13 and 12/16.

US Daily Cash Deficit 12/3/2013

The US Daily Cash Deficit for Tuesday 12/3/2013 was $30.5B led by $24B of Social Security payments. Adding yesterday’s unreported $0.2B deficit gets us to ~$31B for the month.

12-03-2013 USDD

Timing wise…I am syncing 2012 and 2013 based on business days…so we are comparing 2 business days of 2013 (12/1 to 12/3) to 2 business days of 2012 (12/1 to 12/4). This should work well until the end of the month…where 2013 picks up one extra business day vs 2012…. this should result in a small revenue bump offset by a small increase in outlays….all else equal.

So two days in…which admittedly is too early to spot trends…we see that revenues are down $4B…a little surprising, but not concerning yet. Outlays are up….thanks in part to a $5.8B interest payment yesterday….in 2012 this same payment went out 11/30.

So at $31B…the deficit should continue to grow moderately over the next week to ~50B or so. Then…tax revenues should start pouring in around the 15th (a weekend)…probably pushing us to a surplus by Monday 12/16….which we would expect to stick for the remainder of the month.

December 2013 Deficit Preview

With November in the bag…it’s time to pull out the old dart board and take a swing at December. But first…lets take a look at November. My forecast was $160B…actuals came in at $142B, good for an $18B miss…tying my largest miss in the last 6 months I’ve been doing this. The average is a $12B miss, with my best being October with a $4B miss. Clearly there exists some randomness with revenues and outlays that will never be able to proactively forecast, but all together, an $18B miss isn’t that bad given that there were $349B of outlays and $206B of revenues.

The model I am using splits revenues into 21 independent sources and forecasts each stream independently. Outlays are split into 36 sources…also with a cash forecast for each. That’s a hell of a lot of moving parts, but it works surprisingly well. So bottom line…the forecast is not perfect, and never will be, but it does seem to be doing a fairly good job at this point, though I do have some concern about the 2014 forecast….especially on the revenue side. Basically, it may take a few months in early 2014 to re-calibrate the revenue growth I am expecting ~5% (wild a** guess) with what we actually see come January 2014.

Ok…looking forward. December is a quarter close, so we should see a big increase in revenues over November…from $206B to ~$342B as tax payments are made by individuals and corporations, including some cash from our good buddies and Fannie/Freddie. This will be about a 10% gain over last December’s $310B.

For outlays, I have them pegged at $291B….just $2B over last year’s $289B. Clearly it would be nice if we saw outlays down 5% again, but I’m not so sure….at least not yet. Add it all up, and we have a $51B surplus on deck for December….which would leave the year at $663B vs 2012’s $1.096T

November 2013 Monthly Cash Deficit Snapshot

The US Daily Cash Deficit for 11/29/2013 was $29.5B bringing the total cash deficit for November 2013 to $142B…a $46B improvement over last year and $18B lower than my beginning of the month forecast of $160B (and $8B lower than the $150B I forecasted just yesterday 🙂 ). 2 things contributed to my more recent miss. First…revenues for 11/29 came in much stronger than last year on 11/30…$7.5B higher. Second, ~$5B of interest payments due 11/30 actually went out 12/2….a timing shift I did not catch. This was partially offset by smaller increases in outlays elsewhere.

11-29-2013 USDD

Revenues:

Revenues were up $27B over the prior year good for an impressive 15% bump, though about $7B of that was thanks to some help from TARP paybacks…we’ll take them sure…but with only $13B left…this cash honey pot is just about empty. Going back to our November forecast…I had forecasted $202B…so this was actually pretty much spot on.

Outlays:

Outlays at $349B were down $18B YOY, a 5% reduction from 2012’s $367B and $13B under my $362B forecast. $5B of that was the interest payment timing I missed. For the remaining variance, maybe it was just one less business day…or maybe they really are cutting costs? this is the second month in a row we are at -5% for outlays….some of it is timing, but if we see it again in December it will be hard to dismiss.

Summary:

November…even with a $142B deficit was a pretty good month with strong improvement in revenues and the second consecutive month of apparent decreases in outlays. Taking a step back…2013, through 11 months is sitting at a $714B deficit….a $403B improvement over 2012 through 11 months. Revenues are up 14% good for +$349B and Outlays are down $54B…good for a 1.5% decrease. So without a doubt…2013 is going to hit the books as showing impressive improvement over 2012. But at the end of the day…despite all of the revenue gains….we are still looking at a $700B deficit…which is a huge number.

The real question becomes…what’s in store for 2014/2015? Can we continue to knock $400B off the annual deficit…reaching surplus by 2016? I seriously doubt it. 2013 is likely an anomaly…caused by tax hikes and massive fed intervention that is essentially inflating the value of the stock market…which added to some shady accounting at Fannie Mae….led to a very impressive one year revenue gains at +14%. Clearly…anything is possible, but come 2014…I’d be surprised if we top 5% on the revenue side, while outlays will probably start creeping up. The effect will be a temporary new floor/equilibrium between $600-700B annual deficit for another year or so…before heading back up…touching $1T again by 2018. Of course…a recession at any point could accelerate that very quickly.


US Daily cash deficit 11/27/2013

The US Daily Cash Deficit for Wednesday 11/27/2013 was $9.7B bringing the November 2013 cash deficit to $113B with 1 business day remaining. Last year, Friday 11/30/2012 posted a $38B deficit, so $150B seems like a pretty reasonable estimate for the month, maybe +/- $5B….we’ll know by this afternoon.

11-27-2013 USDD

Wednesday brought the final major SS payment of the month, which drove the  large deficit, but also pushed SS ETF outlays past $62B for the first time and a $377M gain over last month, which annualizes out to a 7% gain. Just for reference, excluding December…which has the COLA adjustments…a typical month will have SS growing by about $300M or so. however, for the past 2 months…SS had more or less flatlined at about 61.7B. I can’t explain that, but growth does seem to have resumed, and with December having COLA adjustments figured in…we’ll probably surpass $63B very soon.

With one day remaining…revenues look pretty much in line with the forecast….outlays however are surprisingly weak…it will be interesting to see where the cuts were once we get the monthly finals in.