Investor Karl Denninger: "The light at the end of the tunnel..."

"And you think we'll all be ok, and Obama can sustain his little game with spending eh? Treasury receipts say otherwise: Current year deficit thus far is nearly $1 trillion dollars - half way in. Worse, monthly receipts have fallen off a cliff, down nearly thirty percent compared to last year (for March.)

From January to March last year Treasury took in $540 billion (rounded to the billions.) This period is important because it brackets the 1120 corporate tax return period, and this includes "settlement" of those obligations.

This year the same three months took in $442 billion, a decrease of 18%, and the rate of decline has accelerated precipitously in the last month. This month, April, of course should be very heavy in terms of remittance, since this is when individual 1040s (along with their individual payments) are due. The bug-a-boo is that most individual payments, other than for "one time" capital gains, are made as the taxes are accrued - that is, through W-2 withholding and estimated quarterly payments.

So who had "windfall" capital gains last year? Only the few people who were smart enough to short the market! I suspect that the "quantitative easing" nonsense by The Fed was directly related to the March remittance numbers which they had (of course) in advance, and in expectation of an ugly reaction in the bond market to those figures. From the state data available to me I suspect that April's numbers will be even worse. There is a light at the end of a tunnel, and it is very visible. Unfortunately the rails are singing and you're a mile from the entrance of the tunnel, having foolishly walked inside Mr. President.

Hint: It's a train."

- Karl Denninger, http://market-ticker.org/archives/P4.html