March Madness every month? Is this all Greek to the government? The Treasury posted a record budget deficit of $220.909 billion in February. A deficit of $222.0 billion was expected. Fiscal year-to-date the deficit totals $651.602 billion vs. $589.802 billion the previous year, an increase of 10.5%. Receipts actually rose from the previous year but spending rose at a faster pace. The Administration expects the deficit to reach $1.6 trillion this fiscal year, 10.6% of GDP. While these numbers are staggering, it is important to remember the number does not include our massive unfunded liabilities. As bad as the deficit looks now, the trajectory looks very problematic.

More March Madness? Econ-ology? Are the jobless still waiting for their ticket to be punched? Is the foreclosure “air ball” game, slowing? Trade deficit brakes, and reverses (do we blame Toyota sudden acceleration)? And Is China overheating? Greece is not dancing, they are striking.

Is this like being in bubble limbo? Jobless claims remains “stubbornly high” (Roubini yesterday). Initial jobless claims fell 6,000 to 462,000 in the week ending March 6, close to expectations. The previous week was revised lower by 1,000 to 468,000. The non-seasonally adjusted data stands close to the seasonally adjusted data. Continuing claims rose 37,000 to 4.558 million in the week ending February 27.

Are the jobless still waiting for their ticket to be punched? Steven Wood. Chief Economist at Insight Economics notes: "Initial claims fell modestly in the latest week in the aftermath of the severe winter weather at mid-month. After steadily falling over the final 3 quarters of 2009, there has been very little net change in initial claims so far this year, suggesting that the significant slowing in layoffs during 2009 has stopped, at least temporarily. Continuing claims rose slightly but have been on a sharply declining trend over the past 9 months. However, this is mostly because an increasing number of people have exhausted their regular state benefits and have shifted into the federal emergency and extended unemployment insurance programs. The net change in the total number of people collecting unemployment insurance has been quite volatile in recent weeks but remains very high, now almost 11.3 million, only slightly below its peak level. This indicates that there has been no significant increase in hiring.

Is the foreclosure “air ball” game, slowing…maybe not? What does it mean for a “disjointed” housing market? “This leveling of the foreclosure trend is not necessarily evidence that fewer homeowners are in distress and at risk for foreclosure, but rather that foreclosure prevention programs, legislation and other processing delays are in effect capping monthly foreclosure activity,” RealtyTrac Chief Executive Officer James Saccacio said in a statement. RealtyTrac reported that foreclosure filings fell 2.0% in February vs. the previous month, 308,524 filings were received. This is the smallest pace in four years. Year/year filings rose 6.0%. This is the twelfth consecutive month that foreclosures have been above 300,000. RealtyTrac attributes the improvement not to less distress for homeowners but to foreclosure prevention programs. RealtyTrac still expects a record amount of foreclosures this year. Nevada, Arizona, Florida, California and Michigan led the way. Brian Bethune, chief financial economist at IHS Global Insight said as reported by Bloomberg News, “Government programs are helping to keep more supply from coming out…We’ve got a disjointed market where most of the housing supply is coming from foreclosures rather than building new homes.”

Trade deficit brakes, and reverses (do we blame Toyota sudden acceleration)? Imports drop more than exports. Should we be concern about economic activity going forward…and exports? The trade balance fell to a deficit of $37.288 billion in January. An increase to a deficit of $41.0 billion was expected. The previous month was revised fractionally lower to $39.902 billion. Exports fell .3% led by civilian aircraft and autos. Imports fell 1.7% led by a 10.8% decline in crude oil as oil imports fell to the lowest in a decade. Also, saw a decline in auto imports. Exports has been a driver of growth for the economy…should we be concern about a stronger dollar? What about global economic activity especially in Europe? Is no “sudden acceleration” for exports in our future?

Too small to dance? Jobless won’t get their ticket punched here. The Wall Street Journal writes that small businesses are unable to get loans and are also unable to access the credit markets or the overseas markets. The article states that small businesses have suffered a larger share of job losses. This is a major negative for a sector that has been responsible in the past for the bulk of job hiring's. No credit, no expansion. Unfortunately, bank credit continues to contract with the declines broad based. Remember, the economy needs credit to grow, but banks have bad assets on their books, being told to increase capital and face limited recourse to bad loans so there is limited incentive to lend.

Is the Chinese economy overheating? Chinese CPI rose 2.7% year/year in February, a 16 month high. Industrial production rose 20.7% year/year in February while retail sales rose 17.9% for the same period. Also bank loans exceeded expectations (bubble?) The strength in the reports is likely to push the central bank to tighten policy. Indeed, Song Yu and Helen Qiao, Hong Kong-based economists with Goldman Sachs Group Inc. said as reported by Bloomberg News, “More decisive policy tightening measures than those implemented so far are needed to prevent the economy from overheating.”

Coming attractions. Friday brings data on retail sales, the University of Michigan consumer sentiment index and business inventories.