CBO monthly budget review for June 2013

Posted on July 10, 2013 @ 3:17 pm (Wednesday) by WARREN MOSLER

Looks like the fiscal year deficit will drop from 7% of GDP in 2012 to 3.2% of GDP in 2013.

That means it’s probably going to be running at pace much lower than that on a month to month basis. Again, we are at risk of the deficit not being large enough to support GDP growth at current levels as demand leakages continue unabated.

Could private credit or exports expand sufficiently to ‘make up’ for the reduced govt deficit spending?
Yes, in theory, but so far I see no signs of that happening.

Monthly Budget Review for June 2013

Brent-WTI

Posted on July 10, 2013 @ 10:11 am (Wednesday) by WARREN MOSLER

>
>   (email exchange)
>
>   On Wed, Jul 10, 2013 at 7:42 AM, Michael wrote:
>
>   Your Brent-WTI convergence call at the opening of the Seaway pipeline was one of the
>   best calls I ever saw you make. The timing was beautiful. I never even heard one
>   industry person make that call either. The spread is down to practically nothing now.
>

Yes, thanks, just before its capacity doubled around year end, if I recall correctly.

I also saw it as a risk, as it would mean WTI up over 100 and gasoline up some, although it was largely priced off of brent. It’s also good for the producers but bad for the refiners who had access to the WTI.