US Treasury Cash Remains Low…

In an edit to last week’s update of the daily treasury statement charts, we noted that:

 

The US Treasury’s cash balance was $10.927 billion as of Wednesday, 19th August 2011. This is the lowest level since September 2008!

 

Over the week just passed, we’ve seen a minor increase to just under $13 billion. Here I present the usual charts of the US Treasury’s cash balance and of the cash balance lagged against US equity indices.

 

Daily Treasury Statement - US Treasury Cash Vs S&P 500

US Treasury Cash (& Subcomponents) Vs S&P 500 - Click to enlarge. Source: US Treasury

 

As mentioned previously:

 

On the shorter-term timeframe, we notice a peculiar lagged correlation between the US equity indices and the total operating balance of the US Treasury. The lagged property means that this indicator has the capacity to be predictive. We generally don’t pay much attention to such kinds of analysis, but we indulge in this particular one because it is way out of the mainstream… The broad thesis is that net government spending is bullish for asset prices (on a lagged basis) and net accumulations of cash are bearish for asset prices (on a lagged basis). For a more detailed interpretation of these charts see here.

 

Currently, the charts below suggest that we could see a sharp correction in two or three days time followed by a continuation of this relief rally (if you can call it that!)

 

Daily Treasury Statement - US Treasury Cash Vs Dow Jones Industrial Average Lagged & Inverted

US Treasury Cash Vs Dow Lagged & Inverted - Click to enlarge. Source: US Treasury

 

Daily Treasury Statement - US Treasury Cash Vs S&P 500 Lagged & Inverted

US Treasury Cash Vs S&P 500 Lagged & Inverted - Click to enlarge. Source: US Treasury

 

Daily Treasury Statement - US Treasury Cash Vs Russell 2000 Lagged & Inverted

US Treasury Cash Vs Russell 2000 Lagged & Inverted - Click to enlarge. Source: US Treasury

 

Daily Treasury Statement - US Treasury Cash Vs VIX Lagged

US Treasury Cash Vs VIX Lagged - Click to enlarge. Source: US Treasury

See here for our collection of rare historical economic data.

Posted Aug 26, 2011