January 2014

The US Daily Cash Surplus…the 8th surplus in the last nine days, with the only exception being an $11M deficit on 1/15 came in at $5.4B, bringing the cash surplus to $10B for the month.

Another good day for revenues…adding another $+5B on the day versus last year, though a good chunk of that was a $3B TARP deposit…cash is cash right? Per the Daily TARP report…the balance of TARP Assets remaining is now down to $8B…

So two days ago….I was sitting here pondering about whether or not we would make it to +$17B for the month…equating to a moderate 6% YOY gain. Two days later, we are sitting at +$16B….with 6 days left…so without a doubt…January is looking pretty good on the revenue front perhaps with even +10% is striking distance. I’m no optimist, but there is no denying that the trend is looking good through 23 days of 2014…let’s just hope it still looks this good in 2 more days 🙂

The US Daily Cash Surplus for Wednesday 1/22/2014 was $12.5B as revenues surged far past my expectations…driven by taxes not withheld at $29.2B….compared to $18.5B a year ago…not bad for a one day haul!! From here, we would expect this source to taper off…ending the month well under $1B per day. On the current track, this category is on track for about +10% compared to my initial estimate of +5%. On the other hand, taxes withheld are currently sitting at only +1%, but seem on track to end up closer to +5%.

The 12.5B daily surplus pushes the monthly surplus to $8B…breaking to positive for the first time this month. If revenues stay strong it’s possible we stay here…but I suspect we will still end up with a small deficit thanks to strong outlays Friday 1/31 as a lot of February payments will get pulled forward…January’s loss…February’s gain.

Outlays were actually flat for a change. The final large SS payment is now in the books bringing the monthly total to $62.840B. Looking at the month over month, that would indicate a 5.2% growth rate…which could grow a little higher depending on what trickles in for the rest of the month. It’s not an outrageous number, but it is a bit higher than my forecast, which has a 4% growth rate baked in. The rate does generally jump around, so I wouldn’t read too much into one incomplete month, but it is something to keep an eye on. We know the wave of Boomer retirements has really just started…if we see this rate start to spike for a sustained period, it will tell us one of two things…the second wave of retirements (the first being caused by the “great” recession) may be upon us…or secondly…maybe the economy sucks and seniors are being forced to take SS because they can’t find jobs.

The US Daily Cash Surplus for Tuesday 1/21/2014 was $11.8B…surpassing Tuesday 1/22/2013’s $10B surplus by $1.8B. Revenues were up $1.1B, outlays were down $0.7B.

We are still expecting a big revenue show tomorrow that could push the month in either direction, but for now…revenues have pulled to even.  Last January, revenues ended up at $289B…so for a 6% YOY gain we would need to get to $306B…a $17B gain. So…is a $17B gain in the next 8 business days possible? It appears to be quite achievable. First off, due to how we synced the days up…we get an extra day at the end…that should be good for ~$10B….meaning all we need is about $1B per day to get there. Nothing about that seems unrealistic…a big beat tomorrow could make it a cakewalk…a miss could make it a bit tougher.

The US Daily Cash Surplus for Friday 1/17/2014 was $0.7B bringing the January deficit through 17 days to $20B.

For the day, Revenue was down $1.5B, including a $1B reduction in Taxes not withheld….from $5.2B Friday 1/18/2013 to $4.2B Friday 1/17/2014. It could be nothing…the big day to watch will be Wednesday…last year Wednesday 1/23/2013 pulled in $18.5B…

Outlays continue to fall…this time another $2.5B YOY bringing the total to $-21B. As we’ve discussed, probably $10B of that is just 2013’s additional day. The rest…it’s not real clear…a lot of it seems to be “other”…like the $1.6B IMF payment in 2013 that we haven’t seen in 2014, and other small things like Federal Crop insurance running about $1B lower than last year. I guess we can thank the beautiful weather?

The US Daily Cash Surplus for 1/16/2014 was $5.4B pulling the January 2014 Deficit down to $20B through 16 days.

Curiously….we did see a large revenue gain…just not from where I was looking for it, with Taxes withheld…$3.1B last year Thursday 1/17…this year jumped to $10.7B. Now…I won’t pretend to know the intricate details of tax withholding and remittance to treasury…All I know is that generally speaking…Tuesday and Thursday and usually have low tax deposits…in the $2-3B range. Now…we have 2 days…Tuesday 1/7 and now Thursday 1/16 that have broken that pattern in a big way. Ok…enough crazy talk…

Taxes not withheld, which is where I expected to see the gain actually fell from $4.3B last year to $2.5B. That’s not what we want to see, but it’s not really something to worry about….especially if the gain noted above sticks…

Outlays continue to fall…another $3B YOY. It will be interesting if this sticks…and continues for a few more months. Thinking back….it was around a year ago that we were talking about the sequester and the fiscal cliff….but then I guess most of that didn’t really kick in until a few months later. My thoughts are that YOY cuts are going to be slow down a lot in 2014. Looking at defense for example…2013 vs 2012 defense vendor payments were down about 11%. Cutting another 10% on top of that is going to be tough….so if we see this trend continue past say April or so…I’d be surprised…pleasantly I suppose.

To wrap it up…a nice revenue surprise more than offsets a small disappointment….and outlays are still curiously weak. Stay tuned for next week…which could make or break the whole month.

New pattern emerges?