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US economy outlook I follow US tax receipts which give a rather accurate picture of the state of the real economy. Whilst tax receipts from individuals have turned around in November 2009, they started to be positive in May 2010 and have substantially increased for the sixth month in a row to January 2011. On the corporate front, the turnaround was in September 2009 and numbers became positive in February 2010. All-in-all, tax receipts increased USD 44 billion in FY 2010 (end September) compared to FY 2009, the latter collapsing USD 248 billion with respect to FY 2008. For the first four month of FY 2011, tax receipts are USD 50 higher than in 2010, over 90% of this improvement coming form individuals.

These tax receipts are matching the (slow) improvement in the US unemployment situation: the US added 1 million jobs over 12 months and all indicators were better in January 2011 compared to January 2010 (duration of unemployment, part-time workers

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for economic reasons and no change for discouraged workers). The unemployment rate is down to 9%.

This tells me that consumers are better off and this is translating into other economic data like retails sales and yoy rate of change is back to historic levels.

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Total credit available to consumers has also turned around.

If one analyses US Inc. accounts, I would draw three conclusions:

• Cash flows are improving and even accelerating

• The balance sheet is still plundered with toxic assets

• Off-balance sheet is rather awful (non-funded state liabilities) We are not out-the-woods as yet, but trees’ density is reducing. Source:

Federal Reserve Bank of St. Louis - Economic Research http://www.research.stlouisfed.org/ US Department of the Treasury – Daily Treasury Statement http://www.fms.treas.gov/dts/index.html