US Treasury Pays Down Over $484 Billion In Bills In April: Debt Roll Concerns Becomes Acute

Tyler Durden's picture

Here is the primary risk of why frontloading the US Treasury with ultra-short holdings is just asking for a capital markets/liquidity/solvency/sovereign crisis. So far in April, the US Treasury has redeemed over $484 billion in Bills. That's nearly a half a trillion in mandatory cash outflows, interest payments aside. In April the cash out for interest expense will likely be one twentieth of this. What people don't realize is that the Treasury in April was down to just $9 billion in cash. Unless the UST can roll its debt not on a monthly but now weekly basis in greater and greater amounts, the interest rate doesn't matter. All it takes is one semi-failed auction and it's game over as hundreds of billions in bills become payable.

When one adds the redemptions on non-Bill Treasuries, and we get well over half a trillion in redemptions in April alone. This is better known as a house of cards, balancing on an upside down ladder, located in a puddle of extra slippery oil.

Roll issue aside, the UST issued a net $113 billion in debt in April, coupled with a gross cash burn of 27 billion for a net cash outflow in the month of $140 billion. Add the $120 billion or so in coupons in the last week of April (which likely won't settle until May), and the UST will have a $260 billion in cash burn in April.


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schoolsout's picture

Uh, this stuff goes over my head for the most part, but, uh, things don't sound so honkey dory today

potatomafia's picture

Someone tell that fear mongering, pessimism porn addict, gold shill Peter Schiff to shut his yapper!!


Look at our debt to GDP!!!!!!!!!!!!!!!!!!  Nothing to worry about here.




Oh wait, i mean baaaah, baaah.. baaaaah bah..

akak's picture

Yeah, I just can't STAND that SOB Schiff ---- I  mean, how DARE he expose the uncomfortable truth and demolish the feel-good propaganda of the hysterically pro-status-quo corporate media?  Doesn't he realize how many Americans are all comfy snuggled up to their green shoots and mustard seeds, with the blanket of "recovery" pulled over their heads? 

(Even if it IS a mighty thin blanket, and those green shoots are turning brown and starting to rot and stink.)

John Self's picture

About as hunky dory as Bear Stearns relying on the repo market for its day-to-day funding.

gator gatlin's picture

Looks like the monthly average YTD is around $472B so what is the big deal with April? Admittedly, they/we have a huge funding problem which will one day blow up but this data point does not stand out as much as the post makes it seem.  No?

Dr. No's picture

With the ladder on a bananna peel.

Cognitive Dissonance's picture

Where's that banana Harry Wanger when we need him? Maybe he was cleaning out his shorts?

Mad Max's picture

He's buying AAPL at $260 for 1x future earnings.

AccreditedEYE's picture

I'm very comfortable having him on the other side of my AAPL trade.

akak's picture

Bates is now "Johnny Bravo", did you know?

You should have no trouble finding him, though --- just look for any article that touches on gold or financial collapse (the Achilles' heel of the pro-establishment troll), and his comments are sure to be found beneath.  Like a shit-eating moth to a golden flame, they simply cannot resist being attracted to such discussions.

Alienated Serf's picture

lol@ (the Achilles' heel of the pro-establishment troll)

casino capitalism's picture

The financial system of the world is a house of cards.

tmosley's picture

Looks like the US won't be able to roll over its mortgage like it's broker promised it would, and it's facing one hell of a balloon payment.

The only question left is, where does America mail the keys?

ZerOhead's picture

Sounds about right... they are always looking for more scrap metal...

tecno242's picture

no worries, the banks will bail out the government with all their profits. LOL

monmick's picture

...while there is 7.2 earthquake occurring...

Assetman's picture

...those are Bernenke's knees, you silly boy!

Kitler's picture

They are moving the last of the nations gold out of the Fed's vault?

whatsinaname's picture

yeah got silver but gold is shining more today poof..

aurum's picture

give it time...silver will be the sheeples gold when they finally wake up.

Postal's picture

Silver is this sheeple's gold, as silver is the PM I can afford. :-(

aurum's picture

you're not a member of the're buying PMs now and are, at the very least, informed enough to be reading ZH...its going to be interesting to see the % gain differences among the PMs from here on out. although i love gold, i believe silver may have a run thats better than most anticipate.

malusDiaz's picture

me too


Silver BitcheS!

Alienated Serf's picture

same here postal. baah baah. 

Sudden Debt's picture

Half a trillion, that shouldn'd be a problem for America. That's only 2000$ per person living in America!


Everybody chip in!

chet's picture

It's like payday loansharking... oops, I mean "lending."  Take out one loan, find out you can't pay it back during the next pay period, so you roll it over.  And keep rolling it over with fees and interest until it doesn't work any more.

Same financial strategy for the US government and the lowliest payday loan borrower.

Miles Kendig's picture

Exactly.  Our nation is sucked into the payday cash hustle.  deep.

cougar_w's picture

Easy out: Murder the loan holder.

Sure that means war, but whoever gets the first good punch in wins.

It was a gamble all along anyway.

potatomafia's picture

No, no.  See you just dont "get it".  War is what gets you out of a recession, did you forget about the Great Depression and WW2?  Its really just a big stimulus!!  Keynesian style of course.

whatsinaname's picture

so ZH theory of sell equities to lower rates for debt roll beginning to play out folks ? or just a temp blip on way to bigger bubble ?

AR15AU's picture

Nothing a little QE magic can't fix...

Catullus's picture

Don't worry. The us can still dip in military tsp plans.

Crime of the Century's picture

A couple billion? That ain't gonna cut it...

john_connor's picture

Note to sociopaths: cash flow does matter

Kitler's picture

Then they'll just have make more of it to flow.

I don't know what everyone is so worried about. Obama Economic Recovery Team member and former Harvard brainiac Larry Summers himself said that debt doesn't matter since every debt has a corresponding asset therefore the more we print the richer we (or someone else) gets blah blah blah! He says soon we'll be so stinking rich even kids selling lemonade will be millionaires just like in Zimbabwe...

And a short term debt problem has got to better than a long term debt problem... right Larry... Larry?

john_connor's picture

it is a negative feedback loop.  "making more of it to flow" will just cause a bigger problem.  huge currency swings are outlet valves to all of this but sovereigns are at the limit because they don't have unlimited taxing power.  Riots can shut any country down. 

Dr. No's picture

But can they bring down Skynet?  We have yet to learn if John Connor can lead us to victory.  Perhaps my leadership would be better suited to a new world order?

ZerOhead's picture

Agreed. We cannot take a chance on John Conners' unproven leadership...

I vote NO!

(Dr. No that is...)

lucky 81's picture

'without conscience' and 'snakes in suits' . must reads. 

docj's picture

You worry too much, Durden.  I'm sure Barry, Turbo Tim and Benron have it all under control.

You can stop laughing anytime.

rubearish10's picture

So, as long as European Crisis stays on the front pages, UST should be able to raise money. Can't wait for the opportunity to buy more Gold, unless that chance is over??

tmosley's picture

Options and futures contracts are expiring this week.  If there isn't a buying opportunity Thursday or Friday morning, you may indeed have missed your chance (as that is when the manipulators are out in force).  If they fail to force options contracts out of the money, then the manipulation may well be at an end, and you will just have to buy the grind as it works its way up to $2000 and beyond.

I woud hold off judgement on the manipulation being over until I see two or three months with options expirations that don't contain mysterious selloffs.

Postal's picture

Didn't the Grand High Squid declare just a few days ago that U.S. debt wasn't a problem?

kaiten's picture

So this is the whole Greek story about - distraction.