5/24/2013 Daily US Cash Deficit

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!!