(H/T Matt Franko)
Looking over the Daily Treasury Statement today, revenues for the month so far (9 calendar days) totalled $88 billion.
That compares to revenues of $119 billion in the same period last month.
You can see that revenues are plunging. They're down $30 billion compared to last month and that's in a mere 9 days.
All those bozos who keep saying that "it's no big deal, we won't default because we have 10 times the revenues to pay the interest on the debt" are fooling themseleves. This thing hasn't even begun yet and the economy is already probably contracting and revenues are cratering.
Once this gets going full bore revenues will totally collapse and we may not even have enough to pay debt service.
Banana Republic.
3 comments:
Anecdotal evidence of 3 households Mike:
2 have had to do IRA withdrawals to make payments...
1 will not be able to make payments (house and autos) and is in touch with lenders trying to get reprieve....
We are down about 5b/day on withdrawals for now 10 days (9 in the books) so we are down about 50b on withdrawals so far this month...
Deposits are down by some probably single digits of $B... Withdrawals probably down $50B...
Non-govt sector dipping into previous savings to continue to consume and pay taxes...
So we have to watch deposits as it is not known how long non-govt can go without the 5b/day of withdrawals and continue to dip into previous savings....
Can this lead to a catastrophic failure in the payments system a la Lehman if significant portion of the net liability cohort in the non-govt all of a sudden stops payments on liabilities?
It might... hard to tell where that threshold is though...
Hang in there everybody, morons still in control for now...
rsp,
We have about 7T of bank credit let's say at 6% avg...
That is about 420b annual interest divided by 12 months is 35b/mo.
They have taken out about 50b this month so far...
Hard to say how much of the 50b was planned by the non-govt to pay the 35b.... But the longer this goes on I would have to think the payments system itself starts to feel some ill effects...
rsp
Matt, I don't know whether we can read anything into those figures. I looked at the Monthly Treasury Statements from 2012 and noticed a drop-off from about $262 billion in September to $184 billion in October. The same pattern happened in September and October 2011 with a drop-off from $240 billion to $163 billion. I think there is some seasonal variation due to the timing of the extended corporate tax deadline in September and the individual extension deadline in October.
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