The Banking and Strategy Initiative

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US Economy: More bang for the Treasury buck, Mr Gross

Our statistical review of the US economy may get more frequent this year as the numbers start changing instead of the dull monotony of Bill Gross(PIMCO, Total Return Fund) accumulating MBS Securities to increase his portfolio’s duration after having burnt himself in April 2011 betting on QE3. Even as Bill is now short on cash and hoping for an extended QE3 in MBS, he could still be on the wrong side but not lose as the Treasury starts report a better budget this year. Election year tantrums apart, the Treasury’s monthly deficit for October and November is almost 20% down from October and November last year. The US fiscal begins in October and the treasury deficit for this month at $137 bln was an improvement from the lowest consensus figure of $139 bln. October deficit of $98.5 bln was a big bonus for the Treasury as payments were calendarised in September and were washed away with last year’s hurricane downgrades

Performance ofr the year has been robust with individual taxes crediting $87 bln, a good 20% over collections in November of last year

Obama watchers are likely to get flustered further as Deficits move into a much lower orbit after November to $75 bln and less till February and this year has no reason we know to be otherwise

In other tax news, CME-CBOE and Sears, both in Chicago just got tax breaks to keep Chicago alive. That as always remains the name of the game, but Gross seems to be too far out on this one again. With recovery in action after  a dismal 2011 ( just yoy comparisons, for instance) no one is going to be in a hurry to mop up another $750 bln worth of 20-30 year trash from the market/banks)


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This entry was posted on December 12, 2011 by in Amitonomics, Banking, O'nomics, Retail Lifestyle, US.


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