• Stocks Close At Highs of Day.
  
• S&Ps +16.48 at 1172.27. RIGHT ON 50 DMA
  
• FN 4.5's down 5 ticks at 101-00
  
• CC +1.8bps at 4.364%. Spreads
• 10yr Treasury yields 4.6bps higher at 3.577. Highs of Day  (curve steeper to +271)
• April Treasury Budget Gap stood at $82.69 bln, about double the consensus of $40 bln, and quadruple 1 yr ago at 20.91 bln

FNCL 4.5 off 5 ticks to 101-00. Lows of Day. The 10yr TSY is at its yield highs of the day as stocks close.

The Budget deficit is at a record high.  It's almost as if QE costs money, but then we're surprised when we get a report back that says we're spending more than we're bringin' in... 

Granted, the $80 bln+ deficit vs. a $40 bln (ish) expectation is what most are focusing on, but several of the heavy hitter analysis firms were right on the money with bets around 80-85 bln.  Another eyebrow raiser is that April's have tended be better months for the deficit (tax month!) with 43 out of 56 April reports in the black. 

But for the sake of keeping our heads on our shoulders, let's consider that by this time last year, our year to date deficit was some $2.4 bln higher (802.3 bln vs 799.68 bln).  Still, with all this perspective, big spending is big spending, and for those who disagree with QE, record deficits are another good arrow in that quiver the next time a little wave of spending panic decides to hit the markets.  Certainly doesn't look like that was the case today. Sometimes the spending has to get worse before it can get better...

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