Posted by guest , Jul 28, 2008 5:14PM

Too long, didn't read.

Posted by guest , Jul 28, 2008 5:19PM

the kind of source that comes in a 750ml bottle?

Posted by guest , Jul 28, 2008 5:38PM

Yeah - this should be dollar postive.

Poor larry kudlow - he was so sure last Teusday that "drill, drill, drill" was the solution to all the united states problem. By the way, did larry really think, that everytime he said drill, drill, drill, across from erin burnett that we thought he was refering to oil wells.

U.S. Borrowing to Rise to $171 Billion This Quarter (Update1)

By John Brinsley and Rebecca Christie

July 28 (Bloomberg) -- The U.S. Treasury predicted it would borrow 53 percent more this quarter than initially forecast as increases in spending and sluggish economic growth swell the budget deficit.

Borrowing needs will rise to $171 billion in the three months to Sept. 30, $59 billion more than predicted in April, the Treasury said in a statement in Washington. That total, if realized, would be the second-largest ever after a record $244 billion was borrowed in the first three months of this year.

After improving for three straight years, the U.S. budget is deteriorating as a slowing economy hurts tax revenue and spending increases. The Bush administration, which entered office in 2001 with a $127 billion budget surplus, earlier today predicted the next president faces a record deficit totaling $482 billion in 2009.

``The economic slowdown and increased expenditures associated with slower growth and with the stimulus has had an effect on the federal budget,'' Phillip Swagel, the Treasury's assistant secretary for economic policy, said in a statement.

In the final three months of the year, the Treasury said borrowing would reach $142 billion.

The Treasury predicted three months ago it would pay down $35 billion in marketable debt in the April-June quarter and have a cash balance June 30 of $45 billion. While the government often runs a surplus in the second quarter as individuals pay annual income taxes by the April 15 deadline, that didn't happen this year.

Tax Rebates

The Treasury said the reasons for more borrowing were the $168 billion fiscal stimulus program enacted earlier this year, the redemption of $151 billion in securities by the Federal Reserve, and a decline in debt issued by state and local governments.

``Treasury is going to have revisit their borrowing needs,'' said Joseph Brusuelas, chief economist at Merk Investments LLC in Palo Alto, California. ``They are definitely going to have to borrow more.''

Today, the department said it borrowed $13 billion in the second quarter and the cash balance at the end of the period was $53 billion. ``The increase in borrowing was primarily the result of lower receipts, higher outlays, redemptions of portfolio holdings by the Federal Reserve System and adjustments to cash balances,'' the Treasury said.

Lower Forecasts

Three months ago, the department predicted a cash balance of $45 billion Sept. 30 -- the last month of the government's fiscal year -- and today left that estimate unchanged. The cash balance will be $40 billion on Dec. 31, the Treasury said.

The department estimated total marketable borrowing in fiscal 2008 would total $555 billion. So far this fiscal year, the Fed has redeemed $151 billion in U.S. government securities from its System Open Market Account, which the Treasury said were excluded from the marketable borrowing estimates.

In a series of charts accompanying the announcement, the Treasury said ``credit market conditions and ongoing liquidity initiatives add uncertainty to borrowing requirements.'' In addition, ``volatility in projected receipts and outlays as well as reduced non-marketable debt issuance could also lead to increased near-term marketable financing needs.''

The White House earlier this year said the budget shortfall would rise to $389 billion for fiscal 2008 from $163 billion in 2007 and $482 billion in 2009.

Debt Issuance

Before Treasury's announcement, analysts were already predicting the government would need to brace for more red ink. The borrowing needs are likely to show the first signs of the shortfall to come, said Louis Crandall, chief economist at Wrightson ICAP LLC, a Jersey City, New Jersey-based research firm.

``Those will be very large,'' Crandall said. ``I'm looking for $165 billion in the current quarter and something not much smaller in the October to December quarter.''

The Treasury's borrowing forecast comes two days before details on the size of the Treasury's quarterly refunding of longer-term debt. The department will announce July 30 the amount of 10- and 30-year debt it plans to auction next week, and any other changes to financing plans.

The U.S. will likely sell $16 billion in 10-year notes and $9 billion in 30-year bonds in August, according to the median estimate of five economists.

Bond dealers also are watching to see if the Treasury indicates plans to bring back the three-year note or increase the number of 10 year note auctions. The department announced in May 2007 that it was suspending sales of three-year notes, when tax receipts were rising and the deficit was shrinking.

Rising Deficit

Even if there are no changes this quarter, there may be a borrowing expansion in the months ahead.

``We do not believe the Treasury needs to reintroduce the three-year or seven-year note at this time, and think that there is still room for increases in short-term debt issuance in fiscal year 2009,'' said Lehman Brothers economist Zach Pandl, in an interview before today's announcement. ``However, the medium-term budget outlook is deteriorating quickly, and risks to our supply forecasts are likely to the upside.''

Posted by guest , Jul 28, 2008 5:54PM

Obama! France! Gay Monkey Love!

Posted by guest , Jul 28, 2008 5:54PM

#4 - start your own blog and get the hell out of here...

Posted by guest , Jul 28, 2008 6:09PM

5:38 ...

Too long, didn't read.

Posted by guest , Jul 28, 2008 6:51PM

#8, what's your problem with #4?

Respectfully,
#10

Posted by guest , Jul 28, 2008 7:43PM

#8: I think you meant #6 should get the hell outta here?