US Daily Cash Deficit 3/9/2015

The US Daily Cash Surplus for Monday 3/9/2015 was $9.6B pushing the Surplus through 9 days to $11B. It’s funny…back when I started(and named) this blog near the end of 2012…I would actually put the word Surplus in bold and italics when it happened, which wasn’t a whole lot. At least things aren’t that bad right?

2015-03-09B USDD

Since my last post, we’ve had another $3B in deposits from the FCC bringing the total for the month to $35B….Still curious that reports peg the haul from the spectrum auction at nearly $45B…maybe they are still awaiting payment on the remaining $10B and we’ll see it over the next few weeks? In any case, primarily due to the FCC deposits, cash revenues are at +$39B through 9 days, good for a 59% YOY improvement. Ignoring the FCC cash, we still see improvement with withheld taxes up about 4%, with immaterial declines so far in corporate taxes and taxes not withheld.

Outlays are up $8B, $6B of which is interest timing, laving adjusted outlays at +2%. Individual refunds are still fairly flat, down only $1B or 4%. Business tax refunds are noticably up, though much smaller at $2.9B in March 2015 vs $1.8B last March. For the Year, business tax refunds are up 60% from $8.6B in 2014 to $13.7 in 2015 through 69 days. It’s not a big number, and maybe it’s not a big deal, but generally, this would mean corporate profits are down….

And now for the biggest non story… the Debt Limit. You may recall that last year the debt limit was suspended until March 15 2015…which is Sunday. Nothing that i have read indicates a battle is forthcoming, but I wouldn’t expect a deal by Friday either. That’s ok though, because if you are going to pick a time to hit the debt limit, March 15th is a pretty darn good day to do it. The actual time to run out of cash is a function of your cash in hand on D Day, the amount you can squeeze from extraordinary measures(EM), and the projected cash deficits over the coming months. Now let’s say we end Friday with $50B of cash, and that Lew can squeeze $350B out of EM. First thing monday morning, we should get ~$20B of corporate taxes, and more or less run a small surplus for the rest of March. Then comes April, which should run just shy of a $200B surplus, lets put it at $175B. that puts cash in hand 4/30 at $225B, and you haven’t even really had to tap into EM yet, which means we have nearly a $575B “cushion” to play with. The official estimate is that this gets us to October/November, but my math puts it all the way into next February. There are a lot of wild ass guesses in there, but this doesn’t seem nearly as critical as it has in the past, often right before tax refund season.

That said…I still hate the prospect of EM because it does a number on my cash deficit calculations. Essentially, treasury pulls debt off the balance sheet and pretends like it doesn’t exist so they can issue more and still stay under the limit. I can more or less account for it, but it’s a pain, and I’d rather not. Furthermore, I can’t tie everything back to the penny until after EM is wrapped up, which could be months…or a year 🙁 . So here’s to hoping they wrap this nonsense up in March…


US Daily Cash Deficit 3/3/2015

The US Daily Cash Deficit for Tuesday 3/3/2015 was $32.0B, following Monday’s surprise $41.7B surplus, bringing the March Surplus through 3 days to $10B.

2015-03-03 USDD

We start the month off with a pleasant revenue surprise…$31.6B of cold hard cash from the FCC. A quick search brings a news story I missed…the FCC had an auction of wireless spectrum back in January, setting a record with 44.9B of sales. What happened to the balance (44.9-31.6=$13.3B)??…hell if I know, but we’ll take it and book it as revenue. I have to say…this is a really big number. To put it in perspective, the total YOY gain in revenues I reported just yesterday was about $15B for the first 2 months of the year. In a single day, we’ve doubled that, and now have the year looking at 11.5% YOY revenue gains instead of 3.7%. To be sure…absent real +10% gains….this % will wither away as the year goes on, but this is definitely a material one time event. The timing is actually quite nice….it should more than offset the apparently collapsing revenues from Fannie/Freddie, which could be just a few billion this quarter compared to nearly $18B in 1Q 2014.

Moving along, Outlays are at +7B, most of which can be explained by the $6.3B interest payment that slipped from  February into March, syncing up the YTD, but throwing off the monthly YOY. Nothing terribly interesting here, though this does push the YOY outlays growth rate to 1% from flat at the end of February.

March, is likely the least interesting of the quarter end months as individual taxes, usually high in a quarter end get pushed to April 15. There are corporate taxes, but only ~35B or so. This March happens to have an additional business day over last year, which should add some marginal revenue and outlays. Refunds should remain strong, coming in between $60-70B.

For February, my initial forecast of $210B was only $1B off the actual at $211B…which as I have explained isn’t nearly impressive as it sounds. For March, I’m going to guess a $5B surplus…. Last March had a $25B deficit, but between this surprise revenue, and moderate baseline revenue growth, offset by some outlay timing, $5B surplus seems to me like as good of a guess as I can muster.

US Daily Cash Deficit February 2015

The US Daily Cash Deficit for Friday 2/27/2015 was $39.4B bringing the February full month cash deficit to $211B, $1B over my initial estimate of a $210B deficit for the month. So hooray for wild ass guesses….even though my last guess was between $200B and $210B 🙂

2015-02-28 USDD

February went off mostly as expected with a huge deficit thanks primarily to about $119B of individual tax refunds. Revenue ends up +$19B YOY, not too shabby, while outlays were up$4B. Put it all together and we had another OK month. For the year, revenue is up 3.7%, good for the slowest start since 2010 when revenues through February were down 2.7%. Outlays are flat for the year, which continues to surprise me, but that’s a good thing. SS/Medicaid/Medicare continue to increase….their combined YOY increase is 9%, good for $13B per month in extra spending, but this has been offset by interest timing, lower payments to defense vendors, and unemployment payments. Also helping has been what I suspect is the cash benefit of issuing debt at a premium. The YOY shift has gone from 5B of “expense” last year through 2 months as debt was issued at a discount, to an $8B benefit so far this year thanks to apparent premiums. It’s not material in the big picture, but if it continues I’ll probably need to make some adjustments.

So far, 2014 looks to be slow but steady revenue growth with more or less flat outlays. If this continues, we will continue to make progress in the deficit reduction arena, but it will slow to a crawl compared to prior years. Still, the year is young, and March/April have the potential for big surprises either way. After the April dust settles, we should have a much better idea where the full year is headed. Until then…stay tuned for March, which should have steady stream of tax refunds and some solid mid month corporate taxes…

Fun With Math: Reliant Free Weekends 24 Plan

First off…the disclaimers…this is my analysis, based on my understanding of my scenario, after discussing with two door to door salesmen…and reading about the plan on Reliant’s site here: I’m not a Lawyer, but in my opinion, the whole thing is intentionally hard to understand. That said…here goes.

So, I get home from work, and just as soon as I sit down for dinner….doorbell rings, and 2 door to door salesmen from Reliant/NRG show up. First off…seriously? Everybody in the whole world hates door to door salesmen…come on Reliant….stop going out of your way to make people hate you….. But the guys were nice enough…. so I humored them for a few minutes.

They were trying to sell me a 24 month electric plan….and give me a free NEST thermostat. It would save me a ton of money they said….and…Weekends are free….from 8PM Friday to Midnight Sunday…. They went on for a while, before I ultimately send them packing….and decided to figure out whether or not this was really a good deal or not.

Spoiler alert!!!…it’s not.  Here’s how it works….Weekends aren’t actually free, you still have to pay the delivery charge, which is 4.1 cents per kwh. In exchange for the “Free” weekends…you pay a much higher rate(roughly double the going rate) during the week…the 4.1 cent delivery charge, plus an 11.6 cent energy charge, for a total of 15.7 cents per kwh. The advertised blended rate is 12.4 cents….which I suppose looks about right.

Now, obviously energy usage varies quite a bit depending on the month and the time of day….I could do a lot more detailed analysis, but I doubt it would come up with much different of an answer, so I’ll keep it simple.

I use about 20,000 kwh per year, or 40,000 over a 2 year contract. Using straight average usage, about 31% of that would be at 4.1 cent per kwh…or 12,381 at a total cost of $508. The remaining KWH, 27,619 would be charged at 15.7 cents per kwh, for a total of $4336. My total charges over the 2 year contract would be $4844, which works out to $202 per month and 12.1 cents per kwh.

There’s just one big huge friggin problem. If I go over to …. in about 30 seconds I find a 2 year fixed price plan for 8.4 cents per kwh, meaning the Reliant “Free Weekends” plan is 44% more expensive. (but you do get a free nest…) This option pencils out to $3360 over 2 years, or $140 per month. The reliant plan would cost me $62 a month more….$1,484 over 2 years. If I read it right…there could be about $10 additional fees in the Reliant plan that I wouldn’t pay with the other plan…but I’m not 100% sure on that…so just ignore it or go read the fine print…. maybe you will have better luck than me.

Now….the door to door salesman would probably say…yeah, but the NEST will save you a ton of energy off the bat, and if you do all of your laundry on weekends….you can shift power from high price weekdays to cheap weekends. I call BS on that the savings…my old school programmable thermostat works just fine, and I doubt I could shift that much usage without it becoming way more hassle than it’s worth.

So for me….this plan doesn’t even come close to penciling out for anyone except Reliant/NRG and my friendly, but extremely annoying and time wasting salesmen, who I assume get a decent sized commission for the task of trying to convince you to make a nearly $1500 mistake (in my case…your mileage may vary)

So the lesson is….don’t be stupid people….It looks to me like Reliant/NRG has gone out of their way to make an overly complicated electric plan to make a huge profit margin from people who aren’t so good at math. Just get a regular old fixed price contract…save money, and run your dishwasher whenever the damn thing gets full 🙂

US Daily Cash Deficit 2/26/2015

The US Daily Cash Deficit for Thursday 2/26/2015 was $7.8B bringing the February 2015 Deficit through 15 days to $172B.

2015-02-26 USDD

The most surprising thing about February so far is that refunds have kept pace with 2014. Looking at the YTD….2014 was at $124.5B compared to 2015 at 125.2B. In my forecast, I had reduced my expected refunds by about $10B due to all the hype about Obamacare….looks like maybe it was just that.

Revenues are up about $20B….$10B of that is refund timing, and the rest is bonafide revenue growth. Outlays are at +$6B….primarily interest payment timing…..which will be be offset by another interest payment at the end of the month….where ~$6B of interest payments slip to 3/2 due to the weekend.. Put it all together, and revenue is looking at about +4% on the year, with outlays more or less flat. If I had to guess….with 95% of the data in, Friday 2/27 will post about a ~$30B deficit pushing us just over $200B for the month, and just under my $210B forecast.