Treasury To Issue Half A Trillion Dollars In Debt In Q4

In the first warning sign that the US Treasury is burning through more cash than previously expected, at 3pm today the Treasury Department announced that in its latest forecast of end-of-September cash balance it anticipated only $60 billion of cash on hand, nearly half the $115 billion it forecast in its previous report in May, according to the Department’s marketable borrowing estimates.  The treasury also expects to borrow $96 billion in net marketable debt in the current quarter, down from $98 billion forecast previously.

This drawdown in cash, and jump in government outlays, was to be expected following the latest Monthly Statement from the Treasury which showed a surge in government outlays, which hit a record high $429 billion in June, for reasons discussed previously.

However, the second, and more troubling warning sign was that in its initial forecast of calendar Q4 marketable borrowing needs, the Treasury now expects a near record $501 billion in net marketable debt to be issued from October through December. This amount will be nearly equal to the actual marketable debt borrowed in the last 4 quarters, which amounts to $527 billion. The full sources and uses can be found here.

Also, as shown in the chart below, this amount of upcoming quarterly issuance will be just shy of the previous record hit in the months of the financial crisis, and represents a dramatic change in the recent direction of declining borrowing.

Source: Reuters

One reason for this surge in Q4 debt issuancem coupld with the low level of borrowing in 3Q suggests the debt ceiling will be a “significant limiting factor on auction sizes” as it doesn’t allow for upsizes or provide space for new tenors, Jefferies economists Ward McCarthy and Thomas Simons write.

They also adds that the borrowing announcement suggests coupon sizes will increase in 4Q, since it’ll be difficult to put together “a feasible auction calendar” that increases borrowing by more than $500b “focused entirely in bills,”

Treasury said it expects to borrow $96b in 3Q, with quarter-end cash balance of $60b; expects to borrow $501 billion in 4Q, with quarter-end cash balance of $360 billion. 

As a result, the borrowing projections reflect a “high degree of uncertainty regarding the timeline for Congress to address the debt ceiling."

The good news is that much of this debt will go toward building a cash cushion, as the projected debt needs are only $179 billion for the 4th calendar quarter, leaving an estimated $360 billion in cash as of December 31, 2017.

The Treasury also reported that in the April through June quarter, it issued $35 billion in net marketable debt, compared with its May prediction of $26 billion, and ended the quarter with a cash balance of $181 billion, down from the initial estimate of $200 billion. In April 2017, Treasury estimated net marketable borrowing of $26 billion and assumed an end-of-June cash balance of $200 billion.  The increase in borrowing was driven primarily by lower receipts.


GUS100CORRINA Rick Cerone Mon, 07/31/2017 - 16:17 Permalink

Treasury To Issue Half A Trillion Dollars In Debt In Q4My response: JUST MAKES ONE GO ... HMMM!Below is a VERY SOBERING data point that shows how bad models result in terrible outcomes. If you take a close look at the US DEBT CLOCK data and the rate of change of that data, one very quickly draws one conclusion: America's financial path is NOT sustainable for very much longer. Why? Below is just one reason that answers the question why.US Federal Spending is rising at a staggering $428,253,120 per dayUS Federal TAX Revenue is only rising at $129,857,760 per day.So the US Government at the federal level is spending about $300,000,000 more per day than it is taking in via TAX revenue.EXCUSE ME ... Say what????SO DOES THIS SURPRISE ANYONE? NOT ME!!!! One would have to be BRAIN DEAD not to see this coming.This data is right off of the web page.So America has to borrow some more money.  My message to both the U.S. SENATE and U.S. CONGRESS: You are fired because you jackasses failed to act!!!! Note that I did not look at the rest of data that included state financials as well as liabilities.MR. PRESIDENT ... LET'S JUST GET THE BULLSHIT OVER NOW. JUST GO INTO THE DAMN MARKETS AND BORROW 5 TRILLION WHILE INTEREST RATES ARE LOW BECAUSE WE ARE GOING TO NEED IT EVENTUALLY!!!!AMEN.

In reply to by Rick Cerone

Ben A Drill Mon, 07/31/2017 - 16:24 Permalink

Corporations are very happy. I swear they are going to bankrupt the USA. And they don't care! They take our natural resources such as water and overcharge us by 100%. The states are selling themselves out by charging a recycling fee. Typical $.05 cents for every bottle. Yes the state makes money hand over fist from the recycling fess only to be shooting themselfs in the foot all the while the corporations could give a rats ass about the fiscal heath of the USA.

Deep In Vocal … (not verified) Mon, 07/31/2017 - 16:26 Permalink

big beautiful crash coming.......soceity coming down.....great depression? you've seen nothing yet

buzzsaw99 Mon, 07/31/2017 - 16:35 Permalink

Yet interest rates may well go down during that period. At an improbability factor of 8,767,128 to 1 AGAINST.[/infinite improbability drive computer]

In.Sip.ient Mon, 07/31/2017 - 16:41 Permalink

After tomorrow, the block chain may havesomething interesting to say about this. Accelerating the money printing like that meansthe FEDs are planning for a market thats goingto fall out of bed... possibly hard! 

Hohum Mon, 07/31/2017 - 16:57 Permalink

Debt is a feature of the system, not a bug.  Another system, you say?  Sure, but most people will be a whole lot poorer--maybe even some ZHers who are employed by one scam or another.

MK ULTRA Alpha Mon, 07/31/2017 - 17:19 Permalink

Tax receipts are down, thus the government is spending more borrowed money. A good input to the debt ceiling battle would be a RIF reduction in force of around 400K and a massive sell off of government assets, abandoned buildings and lands etc.

Bush II expanded the government by 65%, this was from a conservative think tank. Who knows how much Obama expanded the government? But it needs to be cut if we have to borrow all the time.

Department of Education, Energy Department can be ripped out by the roots. It is a duplication of state infrastructure and duties. We can't afford it anymore. The government was unable to make an organizational chart, how many companies can't make an organizational chart of all the departments?

There needs to be a cut of 30% of all government departments and agencies across the board.

How can Trump say, a tax cut is coming, when this much has to be borrowed. It sounds like a huge risk to cut taxes and to cover the loss of revenue with borrowing.

MK ULTRA Alpha LawsofPhysics Mon, 07/31/2017 - 18:03 Permalink

There was recently a suppressed report on the pentagon stating around $150 billion was being wasted from excess personnel.

The 17 intelligence agencies have over 200K contractors. That's around $150 billion to $200 billion.

The MSM pumps hate and fear at the wrong targets for Israel. We load up on what we don't need. We don't need 17 intelligence agencies, and if we did, then it must be streamlined.

$500 billion can be cut from government spending. We can only hope the debt ceiling battle will cause allocation and there will be a 30% cut across the board. We can not have a major defense build up with this waste.

The House has a defense spending bill much greater than what Trump proposed. We must keep social services or we will have a rebellion. The government employment numbers are politically skewed. 94 million are not in the work force, but everything is rosy. And we keep pumping in economic immigrates, economic refugees, green card and corporate lateral training transfers. Global population is over 7.5 billion and we still hear the corporate one world government theme song, "We are the world..."

We have had 42 consecutive years of trade deficits. The China trade deficit will be over a trillion over the next three years. Chinese intelligence agents are stealing military and corporate technology at a higher rate than in the history of our a sleep at the wheel nation.

The federal government needs reform and congress is incapable of wiping their a___. They are detached from main stream America, because they're glued to the television. The television does their thinking, chooses the political narrative and controls their minds.

We're on the edge of a huge global war which will make WWI and WWII look like a cake walk. We are at war with China and no one is a wake.

In reply to by LawsofPhysics

MK ULTRA Alpha Give Me Some Truth Mon, 07/31/2017 - 18:17 Permalink

New Zealand is not a good place to move. The below is a reprint of one of my essays. It is accurate. I speak many languages and operated in many nations. Korea is one of my operational areas of expert knowledge. I'm fluent in Korean. I ran operations from the north of Japan to Indonesia. I'm well versed in the Chinese mind and culture. I'm CIA. The Chinese Colonel should have killed me in Hong Kong. They make mistakes. It's a long story. Below is what you must prepare your mind for.

People's Liberation Army front companies have been supplying North Korea with advanced weapons technology. This has been conducted with the tacit approval of the Chinese Central ,Military Commission headed by Xi. North Korea is an important Chinese proxy state. China is on the move in the South China sea, Indian border region and North Korea. China plans to payback Malaysia, Vietnam, and Indonesia, for forcing ethnic Chinese out. The two island groups in the South China sea are designed as a sea gate to protect Chinese naval invasion forces from air attack and surface combatant attack. The ultimate goal is Australia. The Chinese mind believes it is absurd, only 24 million white devils occupy such a huge expanse, and the Chinese are packed into a coastal plain.

The USA must respond with a massive weapons transfer to Taiwan. We must kill over a million PLA in the Taiwan Strait. There will be an invasion and this is a major Chinese Communist Party plank. It is a main plank which has been programmed into the Chinese people. A Taiwan invasion failure will crack the foundation of the CCP. Taiwan has the capital to purchase a great transfer of advanced weapons.

The US Navy must begin stationing anti-ballistic missile ships in Taiwan ports and seas. We are using Taiwanese military manpower to kill Chinese communist. We are leveraging military power. The US Navy Taiwan deployment will be closer to the South China sea. The Japanese Air Defense grid must work with US and Taiwan for full coverage of the Taiwan strait, all islands and sea lanes from Japan to Taiwan.

North Korean missile manufacturing factories must be destroyed with stand off capability. The US can not allow the production of the new solid fuel ballistic missiles with 300 mile range. This weapon makes the liquid fuel Scud a primitive weapon. The US, South Korea and Japanese Air Force must prepare to seal the Dongducheon-Uijeongbu invasion corridor. Let them come to us, meaning fight a defensive battle of cutting armor and troops to pieces with air power because this is the main invasion route because of terrain. North Korea Kim wouldn't be this brazen unless the Chinese Headquarters of the Northern Front Commander wasn't backing him. The PLA and Xi are backing Kim and aggressive moves around the global.

ICBM manufacturing centers destruction sends a message to both China and Russia. Kim is openly threatening the US with nuclear attack. An example has to be made. If Kim pursues war with South Korea, we will cut his army to pieces at the foot of Seoul. North Korean air defense is incredibly thick and lethal. An air war will reduce North Korea over time. However, naval weapons must use conventional cruise missiles and ICBM. This demonstrates the willingness to go nuclear if Kim pulls the nuclear trigger. The Chinese backing gives him an out for exile, thus he believes his own life is not in jeopardy. What we read or see on television is inaccurate. Kim has PLA backing.

The Indian Army is lacking in mountain warfare training and craft. The US has a strong cadre of mountain warfare experts. The US can lend a hand by training the Indian Army in mountain warfare.

The Chinese mind perceives the US to be weak and dying. The Chinese believe the US is bogged down in the Middle East and Eastern Europe and the American people have no stomach for the fight. This is why, China is moving on all fronts. Their card hand has been shown and they have no intention of cooperating with a rules based international system. It is a one way street and that street has to be shut down. The Americans have the Ace of spades and the entire suit of spades. The Chinese wrongly believe they must strike before the Americans rearm.

The Chinese are on a war footing, they have been stockpiling oil. This was the last logistical weakness and they're ready for war. The Chinese plan on using the 700K fishing fleet to transport troops south. They must relieve over population and it is no loss to ship 20-30 million south. A people's war using militia is in the works. It is a gamble of epic proportion. The US is not ready and the American people are a sleep at the wheel. North Korea is a distraction from the main event.

Our objective is to kill 300 million Chinese and divide China into four parts. A naval engagement in the South China sea, a war with North Korea, an invasion of Taiwan, or a war between India and China ends the China trade. This will collapse the Chinese economy. This will cause 1.4 billion people to rebel across China. Xi has clamped down on the Chinese and they resent CCP control. Once the 300% plus debt to GDP ratio crashes the economy, starvation begins to take it's toll and a government crack down will pit the PLA against the people in an epic showdown. A civil war will cause China to divide into four parts and a lower population.

Xi began a Red Guard type cultural revolution four years ago. It is designed to eradicate all American culture and influence from China. Xi declared war on the US in 2009 when he declared war on the US dollar, now the war has intensified. US MSM is behind the curve and the neoliberals have shielded China from criticism. We are at war with China and this nation has no idea. The Obama regime was anti-American and pro-communist no matter what the consequences.

The Chinese Central Bank is in war with Western Central Banks. The Chinese CB manipulates their currency and this is unfair trade competition. The Chinese are printing enormous amounts of paper, this causes global deflation and Western CB must print to compete. The Chinese One Belt, One Road economic strategy is a Chinese mercantile system copy of the British mercantile system. Western economies can't survive this unfair trade system. Central banks are at war with each other, when a central bank loses, then it's war by other means. The coming war will cancel all US Treasuries held by China. The US economy can easily substitute the nearly $400 billion per year China trade with US products and other nation's exports. The trillion dollar trade deficit with China over the next three years can not be allowed to happen. The US has had 42 consecutive years of trade deficits. This irrational economic destruction must stop.

In reply to by Give Me Some Truth

MK ULTRA Alpha Anon2017 Mon, 07/31/2017 - 19:27 Permalink

Bush II asked the American people to sacrifice for a major war. At the same time, he reduced taxes on the richest rich. It was two tax cuts to the wealthy if I remember correctly.

The commoners received a one time gift of a hundred dollars or more. It was outrageous and was spent for survival. Today, 50% of the population are hand to mouth with less than $500 to their name.

During this time, Bill Kristol of Project for a New American Century fame, we need a Pearl Harbor event to galvanize the American people made a speech at LBJ School of Public Affairs. He said to the students, wouldn't it be better to have wealth and knowledge at the top in fewer hands.

Since then, wealth and knowledge has been moving to the top. Wealth distribution in this nation is similar to the Robber Baron era. The Middle Class is shrinking, not growing.

The Zionist neocon did a number to our nation. Victoria Nuland under Clinton State Department bragged she spent $4 billion for a coup in the Ukraine. Her husband is Kagan. The name Kagan is not a name from Israel, it is a Khazar name. Furthermore, two other Kagan operators have a war think tank and are always seen with top generals. See, one must have congressional approval to be a high ranking general. The Israel lobby controls congress and nothing can get done.

Nuland installed a Jew in the Ukraine when the population is a fraction of one percent Jewish. Everything we are told is a lie.

Around 40% of these people are inbred. Look at Debbie Wasserman Schultz , she is inbred. The smaller the ethnic tribe, the greater the inbreeding. It causes schizophrenia. It is the opposite of human logic, it in inverted logic. DWS is not human.She has committed felony after felony and they wanted a criminal like Clinton, Bush I and Bush II and Obama were criminals. That is what the Zionist neocons force on us. THAT is the real reason they hate Trump. A bunch of inbred control us and have combined with the homosexuals to do us in.

Look up the first use of the term Schizophrenia. It is a 1908 term coined by a Swiss professor who stated the Eastern Europeans calling themselves Jews, are inbred. Then it set off a writing war between the Germans and the Eastern European Jews. Then they came to America with this and pointed the finger at Americans. Huge gulags locked up millions. Lobotomies, torture was common.

Today, 17% of the US population has been convinced they're nuts and need mind dope. The mind dope causes brain tissue loss. This was proven in the last five years with brain scan. It is a con and lowers the IQ of over 55 million Americans.

We have a critical mass of inbred in control of key systems. Whats interesting is, Israeli genetic scientist reported they've located the schizophrenia gene and 40% of the Jewish population has it. But they point the finger at Americans.

These people are the Khazar gypsy and Turkic who traded with Hebrew traders along the Black sea. Got some books and started calling themselves Jews, which in the Greek bible is a place name. It easy to see, but Zionist Christians say, look a Jew, it's all true, give me money!

They use the television to brainwash and work to control the people like cattle. Israel sells our military technology to Russia and China, manipulates racism for wars in the middle east and have robbed our nation coming and going.

What is coming is a huge global war thanks to the Zionist inbred.

In reply to by Anon2017

LawsofPhysics Mon, 07/31/2017 - 17:24 Permalink

the debt is FRAUDULENT!!!!!!FUCK THE FED, RETURN TO THE GREENBACK!!!!!!The fucking fed gifts itsrlf via the primary dealer banks FREE MONEY that it then LENDS TO THE TAXPAYER FOR INTEREST!!!!!!!!!!! Roll the motherfucking GUILLOTINES!!!! NOTHING changes otherwise.

Walken Mon, 07/31/2017 - 17:33 Permalink

So, 527 billion in the previous quarters plus additional 500 billion in the last quarter, we're talking a trillion plus budget deficit for the year? Is my math right? And that's not even counting the trade deficit? 

Bobbyrib Mon, 07/31/2017 - 17:45 Permalink

The Federal Reserve is going to be re-balancing its balance sheet.. and what do you know we're issuing more debt? It's a match made in hell.

sinbad2 Mon, 07/31/2017 - 18:27 Permalink

If you or I needed money, we would borrow it, when the US needs to borrow money, it issues debt?How long will the world keep lending money to this bum, before they realise they will never get a cent back?