Daily Treasury Statement Charts Update: 18/3/11

An update of the daily treasury statement charts:

 

Total Operating Balance Vs S&P 500 Inverted

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After a rough week, the total operating balance of the US Treasury declined by around $23 billion on Thursday (latest). The supplementary financing account continues to be unwound; it now stands at $25 billion (from $200 billion; see chart).

 

In a peculiar and alchemistic fashion, the markets continue to corroborate the thesis that net US Treasury withdrawals are bullish for risk assets and net accumulations are bearish for risk assets (on a lagged basis). The charts of the lagged total operating balance vs current risk assets are posted below. They continue to suggest that market stress will be prevalent for the next 10-11 trading days. After that, there may be some upward movement.

 

Total Operating Balance Vs Dow Inverted (LAGGED)

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Total Operating Balance Vs S&P 500 Inverted (LAGGED)

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Total Operating Balance Vs Russell 2000 Inverted (LAGGED)

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Total Operating Balance Vs VIX (LAGGED)

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After the recent UN resolution authorizing international military intervention in Libya, we should be watchful of the US Treasury’s withdrawals for the purpose of defense. I’ll be watching and posting the following chart in the coming weeks and months:

 

Defense Vendor Payments

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See here for our collection of rare historical economic data.

Posted Mar 19, 2011