Daily Treasury Statement

The Daily Cash Surplus for 8/7/2013 was $5.3B pushing the August 2013 deficit through one full week down to $52B.

Revenues lost a bit of ground today…last August about $9B of revenues came from TARP payoffs….we’ve been averaging only $2B per month in 2013, and it won’t be long before that gets down to zero. We are back to -$12B…we need to be at +$20B by the end of the month. We could get there…I haven’t crunched the numbers, but it does seem like compared to last year, the month’s seem to start out weak and end strong. I don’t know what could be behind the evolving pattern, but it is definitely something to keep in mind this early in the month.

Outlays appear to be down quite a bit, but $12B of that is related to the timing of SS payments…2013’s round two won’t go out until next Wednesday 8/14…last years went out 8/8 (which is included…as discussed in the 8/1 USDD). Other than that…there is one less day, and given the end of month timing, outlays for August 2013 should come in $40B or more under last year

The Daily Cash Deficit for 8/6/2013 was $3.0B pushing the August 2013 deficit through 6 days to $57B. Nothing out of the ordinary…typically low cash revenues…like we usually see on Tuesdays and Thursdays with moderate outlays.

Compared to last year…the deficit is a bit lower and I expect it to stay that way. Aug 2012 went on to post a $211B deficit…I am only projecting $155B for this month on higher revenues, lower outlays, and timing.

The Daily Cash Surplus for 8/5/2013 was $5.2B bringing the deficit through 5 days to $54B…right in line with 2012.

Revenues picked up $3B…of the $31B they needed as of the last report to make it to +10%. I really don’t expect a lot of action until next week. Wednesday 8/14 round 2 of SS goes out and it looks like 8/15 has ~30B of interest payments due. But the main thing we should be looking at is revenues. I don’t expect a lot of uncertainty around outlays for the rest of the year…they will probably end the year down 1-2%..I don’t anticipate any large swings either way. Revenues… on the other hand…after a +15% to start the year (Jan-Apr)…have stepped down a notch to around 10%. Any further degradation of these YOY gains…say down to the 5% or do range is going to have a big effect on the 2014 deficit and beyond.

The US Cash Deficit for 8/2/2013 was $23.8B thanks primarily to the first round of Social Security checks going out. Through 2 days, the August 2013 deficit is at $59B…on it’s way to $155B if my calculations are correct:)

As expected…due to the extra business day last year, August 2013 starts in a small revenue hole, but it’s not huge…$11B at this point. In order to reach the +10% we’ve come to expect, we need to get to about +20B. I’m a bit skeptical at this point, but crazier things have happened.

The US Cash Deficit for 8/1/2013 was $35.7B as typically strong first of the month outlays overwhelmed the $18B of revenues.

Let’s start off the month by talking about timing of August 2013 vs 2012. 2012 started on a Wednesday and ended on a Friday. 2013 starts a day later on a Thursday and also ends on a Friday… and thus has one less business day. Since deficit timing better relates to days of the week, and 2012 has an extra day anyway…I’m going to give 2012 that extra day from the start rather than waiting till the end….So…today, I am comparing Thursday August 1 2013 to August 1&2 of 2012. From here on out, my days of the week are synchronized, and within a week or so, the extra day should more or less become noise. Two more timing things to note. First…Social security checks for rounds 2-4 will be six days delayed from last year due to the timing of the 2nd through 4th Wednesdays of the month. And finally…in August 2012, due to the Labor day holiday…about $60B due 9/1 through 9/3 was paid  on 8/31. This month…only ~35B of that will get pulled forward…the $25B SS payment due on 9/3 will likely go out on 9/3 since the holiday is 9/2.

So…with all of that behind us…last August we posted a $211B deficit. After adjusting for timing, increased revenues and a decrease in outlays, my initial deficit estimate for August 2013 is $155B.

Cash on hand to fund the estimated $119B deficit (remaining for the month)…remember we can’t borrow any more… is only $79B. Treasury shouldn’t have any trouble funding this shortfall…on 7/31, they managed to create $58B of cash out of thin air (or we would be at $21B), it would be foolish to think they couldn’t do it again. That is what makes forecasting the debt limit nearly impossible. I can take the current cash balance and forecast what day it runs out with pretty good accuracy. But I can’t forecast when Lew will wiggle his nose and poof…create $50-$60B…. and I can’t forecast when his magic will run out…making the whole exercise more or less a fools errand. They say October-November…sure why not…