Daily Deficit

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…

The US Cash Surplus for 7/31/2013 was $2.2B bringing the July 2013 deficit for the full month to $90B exceeding the July 2012 deficit of $82B by $8B.

As expected, the last day of the month brought in strong revenues and strong outlays. $16B of revenues helped push yesterday’s meager 1% YOY gain all the way back up to 9%…respectable, but well under the pace set in the Jan-April period. Just for reference…YOY gains in revenue from Jan-April were about 15%…May through July, adjusting for the Fannie Mae payday loan is running at 9% YOY growth.

I’m pressed for time now, but will try to crank out a more in depth July review over the weekend. In the meantime…we get a first glance at August in just a few hours.

The US  Cash Deficit for 7/30/2013 was $5.0B pushing the July 2013 deficit through 30 days back up to $93B with just one business day remaining.

Recall…I aligned 2013 and 2012 by business days and day of week…So we are comparing 21 business days to 21 business days, but July 2013 has an extra day, so we are comparing All of July 2012 to 30 days of July. This is more or less what the month would have looked like without the extra business day….Flat revenues, and adjusted for timing, small, but noticeable reductions in outlays.

Yet…we do have an extra business day, so we can probably expect an additional $10-15B or both revenues and outlays. It still looks more likely than not revenues, even with the extra day will come in under 10%….August…which loses a business day could be downright ugly…

The US Cash Surplus for 7/29/2013 was $8.1B on strong Monday revenues and typical outlays. With two business days left, the July 2013 deficit is sitting at $88B. Tuesday normally yields a moderate deficit, and Wednesday…well, anything goes on the last day of a month. I expect revenues to be elevated, but there will also be a $5B or so interest payment…I’m more or less expecting a wash. I believe my initial estimate for the month was $80B…later revised to $90B +/- $10B (somebody correct me if I’m lying here…no time to go back and check right now). That still sounds good to me…we’ll know for sure in 48 hours.

Remember….I’ve attempted to synchronize the months based on business days…so we are actually comparing through Monday the 30th of last year. I think this gives us the most useful YOY comparison… we’ll catch the extra day this Wednesday…should be good for an extra $8B or so revenue…and cost:(

The US Daily Cash Surplus for 7/26/2013 was $0.8B dropping the June deficit through 26 days to $96B with 3 business days left. It seems likely that the deficit will fall a bit further on strong Monday and Wednesday revenues and no large payments looming…. I would normally guess $5B, but it could be a bit more depending on whether or not revenues from the state come through for unemployment. Last July, we saw over $8B from the state in this revenue category…this July, we have only seen $1.3B so far. $7B seems like a pretty steep drop, though admittedly, this series is a bit difficult to predict. So…I would not be shocked if we got a $5B or so bump in addition to the $5B I would have expected. If we don’t….well that would be interesting I suppose.