clester's Account Talk

[NiteFlyer]

With market reaction does it feel like some smart money is coming in off the sidelines to take the market higher for the next week or two and then take the profits just before February when Washington tries to get serious about the debt and budget? That battle will drag the markets down until a solution is found. Why not manipulate the markets now and take advantage later.

This is what I've been thinking too. I think the view is supported by the relatively low volume of trading that has occurred as stock prices have risen. Since the volume has been low, and the idea is that many people moved to saftey prior to Jan 1st, that money can only come into the market. Those already in, that want to take profits should be fewer than the ones coming back in. So, the prices should mostly go up until the new money that comes in gets jittery and takes profits.

 

[clester]

With market reaction does it feel like some smart money is coming in off the sidelines to take the market higher for the next week or two and then take the profits just before February when Washington tries to get serious about the debt and budget? That battle will drag the markets down until a solution is found. Why not manipulate the markets now and take advantage later.

I think this is what will happen. The question is: when does the market start to get nervous. It's very hard to try to play the news or politics. That's why I use the charts. We are overbought in S fund, close to overbought in I fund and C is still not overbought. I use the RSI indicator for this. S and I have broken out to new highs. C fund is close. Sentiment is overly bullish but we are in a bull market. That's why I an in a 50-50 position. I would like to see the S fund have one more push higher to get a solid sell signal based on RSI. I will get a confirmation sell if we break a trend line for example.

There is more that goes into my system, but in a bull market I stay in at least 50% except in a few rare cases. This way I dont miss out if we rally more or I save some if we go down.

 

[clester]

Nothing has change for my system. Still 50-50 but I am expecting a pullback any time. The rise in payroll tax has started to reverberate around the country. My wife got her first check and it was about $80 light for the month. If your living paycheck to paycheck that's going to hurt. I expect the consumer will back off for a while until the get used to it. This could be one thing that upsets the markets. That along with the debt limit could mean trouble soon. I won't sell my other 50% though until I get some confirmation it's started.

 

[clester]

Nothing has change for my system. Still 50-50 but I am expecting a pullback any time. The rise in payroll tax has started to reverberate around the country. My wife got her first check and it was about $80 light for the month. If your living paycheck to paycheck that's going to hurt. I expect the consumer will back off for a while until the get used to it. This could be one thing that upsets the markets. That along with the debt limit could mean trouble soon. I won't sell my other 50% though until I get some confirmation it's started.

Americans Feel Austerity's Bite as Payroll Taxes Rise

 

[JTH]

Nothing has change for my system. Still 50-50 but I am expecting a pullback any time. The rise in payroll tax has started to reverberate around the country. My wife got her first check and it was about $80 light for the month. If your living paycheck to paycheck that's going to hurt. I expect the consumer will back off for a while until the get used to it. This could be one thing that upsets the markets. That along with the debt limit could mean trouble soon. I won't sell my other 50% though until I get some confirmation it's started.

It makes me wonder what's the first thing to get eliminated from the family budget, the last 5 years have been "Spend more money, get less product." If it weren't for China's cheap products we'd not cut back one bit, we'd just be screwing ourselves with more debt.

 

[RealMoneyIssues]

Americans Feel Austerity's Bite as Payroll Taxes Rise

More accurately, go back to what they were and have been since 1990. No surprises and to be honest, it shouldn't have ever been done. All it did was make SS even more insolvent...

 

[clester]

I'm starting to get very concerned with the debt limit cliff coming. If we do default where is the best place for our money. G fund will be confiscated. It has already been borrowed from, we default on paying that back. Stocks will tank. What about F fund? I know there are a lot of govt bonds in there too. So, is there a safe place? This is really a cliff. Much worse than the fiscal cliff. I guess if you really think it could happen you would need to be in stocks. They will tank but at least it would have some value. Bonds would be zero.

I hope we don't go there. It would be a disaster. Social security checks stop. Pension checks stop? Every Gov. employees check stops, the military stops getting money, etc. What would it really mean. I'm not sure. We've never gone there.

I know I sound all doom and gloom. Sorry. Just something we need to consider.

 

[Frixxxx]

I'm starting to get very concerned with the debt limit cliff coming. If we do default where is the best place for our money. G fund will be confiscated. It has already been borrowed from, we default on paying that back. Stocks will tank. What about F fund? I know there are a lot of govt bonds in there too. So, is there a safe place? This is really a cliff. Much worse than the fiscal cliff. I guess if you really think it could happen you would need to be in stocks. They will tank but at least it would have some value. Bonds would be zero.

I hope we don't go there. It would be a disaster. Social security checks stop. Pension checks stop? Every Gov. employees check stops, the military stops getting money, etc. What would it really mean. I'm not sure. We've never gone there.

I know I sound all doom and gloom. Sorry. Just something we need to consider.

Well in the Grand Scheme of things, even if you fall back to "G" and they write IOUs then it may be the best place to put stale money (no growth) I'm afraid that the "F" will lose money when no one trusts any investment, but money has to go somewhere.....I think we just live with kicking the can down the road for the next few years.

 

[RealMoneyIssues]

Well in the Grand Scheme of things, even if you fall back to "G" and they write IOUs then it may be the best place to put stale money (no growth) I'm afraid that the "F" will lose money when no one trusts any investment, but money has to go somewhere.....I think we just live with kicking the can down the road for the next few years.

Great, more can kicking... how about we garner some more spending cuts with this debt ceiling raise, or better yet, put another sequester if the Senate doesn't pass a budget (you know, one of those things we haven't had in over 3 years)... These are all self inflicted shot gun wounds but no one is willing to make the hard decisions...

At some point soon, band aids (aka kicking the can) won't work...

 

[clester]

Well in the Grand Scheme of things, even if you fall back to "G" and they write IOUs then it may be the best place to put stale money (no growth) I'm afraid that the "F" will lose money when no one trusts any investment, but money has to go somewhere.....I think we just live with kicking the can down the road for the next few years.

I'd say your right. If we default for good then everyone and everything goes bad. If it's for a few days and they get smart and start paying the bills we will get our bonds honored. When folks start missing paychecks it will get ugly fast.

 

[RealMoneyIssues]

I'd say your right. If we default for good then everyone and everything goes bad. If it's for a few days and they get smart and start paying the bills we will get our bonds honored. When folks start missing paychecks it will get ugly fast.

We won't default, we have enough revenue to pay our interest payments, but the inability to sell more bonds (aka get more money to spend) will cause us to live within our means and will cause an immediate cut in spending equal to our deficit... bad thing?

 

[clester]

We won't default, we have enough revenue to pay our interest payments, but the inability to sell more bonds (aka get more money to spend) will cause us to live within our means and will cause an immediate cut in spending equal to our deficit... bad thing?

Yes.

 

[RealMoneyIssues]

Yes.

Um, ok...

 

[clester]

Um, ok...

I really don't want to start a political argument. You made a broad statement without much detail There is a lot more to it than not being able to sell bonds. So I gave a simple answer. Default is bad.


Of course we need to fix the budget. But this is not the way. The sequester is a much better way to shoot yourself. No one really knows what a default would mean. The consequences would be much worse that the fiscal cliff everyone was so stressed about. Let's concentrate on what it means to TSP. The market would tank hard IMO. We are about a month away. I am trying to decide if and when I should get out and where to go.

 

[RealMoneyIssues]

I really don't want to start a political argument. You made a broad statement without much detail There is a lot more to it than not being able to sell bonds. So I gave a simple answer. Default is bad.


Of course we need to fix the budget. But this is not the way. The sequester is a much better way to shoot yourself. No one really knows what a default would mean. The consequences would be much worse that the fiscal cliff everyone was so stressed about. Let's concentrate on what it means to TSP. The market would tank hard IMO. We are about a month away. I am trying to decide if and when I should get out and where to go.

Wasn't trying to be political, the fact is we overspend...

We won't default, we have enough revenue to pay our interest payments, but the inability to sell more bonds (aka get more money to spend) will cause us to live within our means and will cause an immediate cut in spending equal to our deficit... bad thing?

As I said, we won't default. So claiming that we will default is a misdirection of the facts. If we were actually unable to pay the interest due on our outstanding bonds (probably from a complete collapse of our economy, is that realistic, not), then that would be absolutely bad.

If you have information showing how we would default on our bonds (actually not paying our debtors their intereste due), please post it so I can educate myself.

Thanks for the discussion.

 

[clester]

Wasn't trying to be political, the fact is we overspend...



As I said, we won't default. So claiming that we will default is a misdirection of the facts. If we were actually unable to pay the interest due on our outstanding bonds (probably from a complete collapse of our economy, is that realistic, not), then that would be absolutely bad.

If you have information showing how we would default on our bonds (actually not paying our debtors their intereste due), please post it so I can educate myself.

Thanks for the discussion.

So yeah, paying interest on bonds is apparently the first thing we will pay.

 

[clester]

So yeah, paying interest on bonds is apparently the first thing we will pay.

I need to educate myself on the real consequences so if anyone knows let me know. So, G fund should be ok since it's our goverments first obligation, right? what would be directly impacted then? What does the borrowing go for? Somebody is going to left holding the bag. Is it us? Or who?

 

[ATCHUNTman]

I need to educate myself on the real consequences so if anyone knows let me know. So, G fund should be ok since it's our goverments first obligation, right? what would be directly impacted then? What does the borrowing go for? Somebody is going to left holding the bag. Is it us? Or who?

This G fund measure really bothers me, I'm considering rolling to an IRA. Higher costs but more control. Any thoughts?

 

[clester]

This G fund measure really bothers me, I'm considering rolling to an IRA. Higher costs but more control. Any thoughts?

I ultimately decided to stay in tsp because of low fees and the G fund. I am confident it will be honored. But, it's not a bad idea to have part of your retirement outside the govt. but an Ira company can go bankrupt or lose your money too. It was just easier too. No transferring etc.

A lot of folks do transfer to an Ira. I don't think either is a bad idea. I guess whatever helps you sleep at night.


So, have you gotten used to retirement?

 

[ATCHUNTman]

I ultimately decided to stay in tsp because of low fees and the G fund. I am confident it will be honored. But, it's not a bad idea to have part of your retirement outside the govt. but an Ira company can go bankrupt or lose your money too. It was just easier too. No transferring etc.

A lot of folks do transfer to an Ira. I don't think either is a bad idea. I guess whatever helps you sleep at night.


So, have you gotten used to retirement?

I'm considering 1/2 in tsp and 1/2 in an IRA. 1/2 public 1/2 private so to speak.

2 weeks in and I am loving every minute of my freedom!!