Daily Treasury Statement

The US Daily Cash Deficit for Wednesday 10/9/2013 was $8.5B bringing the October Deficit through 9 days to $56B.

Revenues look to have caught up with last year….it will be interesting if they hold onto that lead through Columbus Day, but we won’t know until next Wednesday. Outlays continue to look suspiciously slow, including one category….tax refunds which slowed to a trickle this month before apparently stopping altogether today… Now, it isn’t unusual for tax refunds to be low….they averaged about $800M a day last October….but zero….this more or less indicates that the IRS is not processing refunds, which jives with an article I read earlier in the week.

I don’t know if this is a one off….maybe they are processing refunds only on certain days….or if there will be no more refunds until the government is re-opened. For the full month, last October had $18B of refunds. So far this month, we are at $2.8B. I account for refunds as reductions to revenue and outlays(this eliminates double counting)…so if they just stop sending them out….it will give October revenues a nice bump….until they catch up on refunds….when it will get flushed back out. If it ends up crossing periods…it screws up the trends:(

Cash was down to $23B with five business days to go before 10/17 “deadline”. I’d expect moderate deficit 10/10, followed by a moderate surplus 10/11. 11/14 is a holiday, but 11/15 should post a pretty solid surplus on corporate tax payments coupled with the long weekend worth of deposits sitting in the mailbox. Then Wednesday 11/16 will look a lot like today with round 3 of Social Security payments, and another small deficit on 11/17. Lew hasn’t amended his $30B estimate, but that looks reasonable enough to me.

It may not even be an issue….rumor has it a short term debt deal is in the works…I’m curious how that would play out. Will they keep all of the “extraordinary measures” games off the books, and just increase it by $150B or so….or would it be enough to bring all the EM back…say $250B, plus another $150B to get through the next six weeks…..and starting the EM games back up again?  I suppose it really doesn’t matter anymore. Right now, outstanding debt as of 10/9/2013 stands at $16.7T. There is a very high probability that on 10/9/2014…debt outstanding is going to be knocking on $17.7T…..any takers on that?

The US Daily Cash Deficit for 10/8/2013 was $2.5B pushing the October deficit up to $47B and the cash balance down to $32B…pretty close to where Lew has stated he expects it to land next Thursday.

Revenues continue to gain ground on 2012 despite the slow start. Outlays continue to be very light. I can only assume that bills are being slow paid and some things just aren’t getting paid at all. Since this is the cash deficit…no accruals here…. this will create the illusion of a lower deficit now….and a higher deficit later…when all of the bills are caught up and people get their back pay….after the debt limit is raised and the government is re-opened.

Tomorrow should post a bit larger deficit driven by a $12B Social Security payment, partially offset by higher revenues….$5-10B seems most likely, followed by a moderate Thursday deficit, and probably a small surplus on Friday.

I do want to point out that 10/17 is being talked about like it is doomsday in the press. However, from what I have read, Lew isn’t saying that it’s Doomsday…just that he will be out of extraordinary measures, and left with $30B of cash. It looks to me like a $30B cash cushion ought to be just about enough to get to 11/1 before an actual cash flow problem hits….but it’ll be a big one. It’s hard to estimate with precision, but using Friday 3/1/2013 as a go by (the last month to start on a Friday) there were $75B of outlays and $21B of revenues good for a $54B cash deficit. So without a deal….$54B of something doesn’t get paid 11/1….which is exactly why I suspect there will be a deal, but you never know….I didn’t expect the government to actually shut down, yet here we are, 9 days into it, with very little apparent progress being made. Stay tuned…the show is about to begin.

The US Daily Cash Surplus for 10/7/2013 was $5.7B on strong Monday revenues and continued low outlays. Through one week, October 2013 Deficit sits at $45B.

Yesterday I synced up the reports on days of week, however, last year, Monday 10/8 was Columbus day…so no inflows or outflows. This year, Columbus Day is next Monday 10/14. The result in our chart is an apparent improvement in revenues that will likely disappear tomorrow as 2013 shows typically weak Tuesday revenues, and 2012 has strong Tuesday revenues as they cash all of Monday and Tuesdays checks. This won’t fully shake out until next Tuesday after Columbus Day.

Cash edged up again with the surplus and is now at $35B. but will probably be drawn down over the next 3 days.

The US Daily Cash Surplus for Friday 10/4/2013 was $4.5B pulling the October 2013 Deficit through 4 days down to $50B. Cash Outlays were extraordinarily low…coming in at only $5.7B….. you have to go back all the way to May 2011 for a lower daily number. Not sure if that’s an anomaly, or somehow related to the “shutdown”…maybe the accounts payable group was deemed non-essential….thus, thus slowing down the payment process? Or maybe they are just slow paying to conserve cash…businesses do it all the time, why not Uncle Sam?

To the Charts: Full disclosure…I decided to go ahead and sync up October 2012 to 2013. October 2012 started on a Monday, October 2013 started on a Tuesday. Since revenues and outlays are generally correlated with the day of the week, I will just go ahead and add the extra day in 2012 into our charts. For example, today, we will be comparing 4 business days of 2013 (10/1 to 10/4) to 5 business days of 2012 (10/1 to 10/5) both ending on a Friday. 2013 will catch up on the last day of the month. Granted, this isn’t a perfect YOY comparison, but perfect simply doesn’t exist.

Revenues are down still but making some progress in catching up to 2012, while cost is looking really good….almost suspiciously good as noted above.  Cash in hand grew about $4.5B on the surplus and is currently sitting at $29B…right about where Treasury is saying it will be on 10/17. I would expect to post another surplus Monday 10/7, before slipping back into deficits 10/8-10. Again…nothing big for the rest of the month, just moderate weekly deficits slowly whittling down the cash balance. I would note there is likely a bit of “EM” magic left to play…I guess we’ll find out soon enough.