Daily Treasury Statement

The US Daily Cash Deficit for Friday 10/18/2013 was $2.6B bringing the October Deficit through 18 days to $58B with nine business days remaining.

Revenues continue to make small daily gains and are now sitting at +$7B…certainly within striking distance of the +$20B we need to see to hit out +10% target.

Outlays were stronger, but still no flood. It looks to me like we are at least $20B shy due to the shutdown, but it will probably take a few more weeks to completely catch back up on payments.

On deck for this week….the final SS payment of the month goes out Wednesday, and the monthly SS report is also released showing us how many more people are on SS than last month. Other than that, the rest of the month looks pretty mild leading up to 11/1, which should be a blowout deficit wise.

On the day Treasury issued stopped hiding $328B of debt, many will probably be surprised that they actually ran a $$1.6B cash surplus. How is that possible?? Simple….pretending you don’t have debt….then remembering you do….has absolutely no affect on cash. And that’s what I report on here…the cash deficit…. not the “modified accrual make believe” deficit.

So ignoring all of the debt drama….revenues were strong, and outlays continue to be extraordinarily weak. I guess it will take a few weeks for the government’s AP group to dust off the printers and start cranking through the backlog of unpaid bills…..hopefully they at least start with themselves….that 2 week paid vacation sounds like a pretty sweet perk to me. Where do I sign up? We get to do this again in February right? Cancun anyone?

The US Daily Cash Deficit for 10/16/2013 was $7.1B increasing the October 2013 Deficit through 16 days to $57B with 11 business days remaining in the month.

Revenues have managed to pull back into line with 2012….we need another +$21B between now and Halloween to get us to +10%. We’ve seen it happen before, so it is certainly possible, but it seems like a bit of a stretch.

Outlays also outpaced 2012, primarily due to the $12B SS payments that went out. It will be very interesting to see if outlays come in strong and remain elevated for the next few weeks as back pay, slow paid invoices, and tax refunds start going out and the backlog is caught up.

For the rest of the month we should see the deficit continue to creep up, with moderate daily deficits and an occasional surplus here or there. My initial estimate was a $91B deficit, which still looks reasonable, though it will depend on how strong second half revenues are and how long it takes outlays to catch back up.

Cash in hand ended at $32B. I’m not sure if Lew’s $30B estimate was for end of business today or tomorrow, but close enough I suppose. I have not seen any official announcement, but it is possible that tomorrow’s report will show us the extent of EM and the lifting of the debt limit. I suppose it may take them an additional day or two though….in which case we would see it early next week.

The US Daily Cash Surplus for 10/15/2013 was $8.8B pulling the October 2013 cash deficit through 15 days down to $50B. Contributing to the surplus, $7.4B of corporate taxes were received, a 6% improvement over last year’s 10/15 haul of $6.9B.

With the Columbus Day timing behind us, we are more or less back in sync, with 2013 back to trailing 2012 on revenue by about $5B. Offsetting this…Outlays are down by $34B as the shutdown has apparently slowed a lot of payments down and completely shut off others. Add it all up, and at first glance, we are showing some a fairly impressive spurt of deficit reduction….a $29B improvement over October 2012 through the same period.

However…with a shutdown/debt limit deal rumored as of Wednesday afternoon, it is looking like the government will be back to work in a few days and the debt limit will be raised. It may take more than a few weeks to catch up on all of the delayed payments and tax refunds, but when they do, all of these apparent reductions in outlays should more or less wash out.

Cash in hand is $39B with a $5-10B deficit on deck for 10/16 as $12B of round 3 SS payments will go out. If the rumored deal goes through, this will all be a moot point, but it does look like Treasuries $30B estimate for 10/17 will be right on the mark. What I am most interested in seeing is how much the debt increases on day one as Treasury brings all of those hidden “Extraordinary Measures” debts back onto the balance sheet. Last time we had this debate, $238B of debt showed back up on 8/2/2011. That sounds about right to me, so I’ll go ahead and guess $250B and keep my fingers crossed….it will probably be next week before we find out though.

The US Daily Cash Deficit for Friday 10/11/2013 was $1.5B pushing the October 2013 deficit through 11 days to $59B. For the third day in a row, no tax refunds went out. We aren’t talking big $, but I’d guess at least $2-3B of refunds are now pending, growing by~$0.5B per day.

No real changes to see here…revenues slowly creeping up and costs continuing to look suspiciously low. Tomorrow’s report should get us more or less back into sync with last year with Columbus day behind us and a nice slug of corporate taxes on deck.

Cash in hand fell to $35B with just a few more days to go until the 10/17 non-event date, so that $30B estimate still looks reasonable to me, and like just about enough to squeak by until the end of the month…especially if the government is still shut down. So circle 11/1….that’s the day things start really getting messy.  Cash in hand will be pretty close to zero, and while revenue will be about ~$20B…there are about $70B of payments due, including about $40B of SS and Medicare along with a lot of other government pensions and military active duty pay. Somebody’s check is going to bounce….

If there isn’t a deal by then, I have to think things could get real bad real fast. I still don’t expect that to happen, but you never know….I mean who thought a month ago the government shutdown would happen….much less still be going on mid month?