Tuesday, January 31, 2012
Daily fiscal update
I will be publishing my daily fiscal update (DFU) from now on. It is a commentary based on my reading of the Daily Treasury Statement. Please email me if you have any questions.
Current situation for 1/31/2012:
The Index was negative, but improved a bit to -78.2 from the prior day’s reading of -82.7. The raw (un-smoothed) index went the other way, dropping to -81.3 from -78.7 on Monday. Treasury continued to run a surplus at $23.2 bln. That is $17.4 bln more than at the same time last month. Surpluses are negative because they drain private sector financial balances. Real net spending (total outlays adjusted for public debt redemptions) totaled $304.1 bln. That is $14.4 bln more than the same time last month. Spending momentum is now starting to slow for the first time since Jan 17. For the fiscal year so far, total spending is down $338.6 bln versus last year. That is huge. It’s about 2.0% of GDP and we’re only growing at 2.8%. And if you subtract out inventories and auto sales then it’s a 2.0% subtraction from 0.5%, which means negative growth of 1.5%. Really bad...recessionary stuff. The debt limit was raised to $16.4 trillion yesterday. We’ll see if that increase results in a pickup in spending. The divergence indicator was 190.6. The risk level is still red.