nasa1974's Account Talk

[nasa1974]

Here is the link to the FRTIB's August meeting minutes. http://www.frtib.gov/pdf/minutes/2008Aug.pdf They are talking more trade restrictions. Here is a partial copy from the meeting minutes.

"c. Investment Policy Review.

Ms. Ray reviewed the August 8, 2008 memorandum (attached), entitled "July 2008 Performance Review - G, F, C, S, I, and L Funds."
She noted that the I Fund had a tracking error of 54 basis points, primarily due to a fair value adjustment. Year-to-date, the I Fund has underperformed its index by 23 basis points. This is due to the fair value adjustment and the tax effect. Trading costs for the I Fund were $2.8 million in July. These costs stemmed from a $200 million trade made before the 4​

​

th of July but not executed until July 7th. This single
trade cost $3.8 million to execute. She added that this expensive trade demonstrates why we needed to institute trading restrictions rather than impose trading fees. That is, we can't predict trading costs because timing affects everything. Mr. Long stated that this is the hypothetical he had posed to the
Board-a large trade over a long weekend with a volatile market. Although this was a large trade, it might have been significantly larger had we not implemented trading restrictions. Chairman Saul asked whether the Agency could have minimized this
expense. He was told that trading restrictions should limit, but cannot eliminate, such events."

Has anyone explained what the "tax effect" is??

The FRTIB still has issues on the cost per trade. Maybe they should have a provision in the next contract that reduces what can be charged per trade instead of restricting us.
They are also talking a lot about the "L" funds. I think if they could they would put everyone into "L".
They seemed confused on the amount of trading going on. Hello, those of us that have been in TSP since day one are getting ready to retire and are looking to feather the nest.:blink:

September's meeting minutes should be an interesting read as well. I will post the link as soon as I see the minutes are out.

​

 

[Silverbird]

I think the FRTIB can't handle a foreign market-based fund, especially one based on many foreign markets. May be exchange rates, may be they are completely clueless on Fair Value, probably both. Every big expense seems to stem from "I", not on the number of trades.

BTW I would like to be able to invest my money in a Foreign Bond fund, but I'd hate to see these yoyos try to handle it with their problems with "I" and their odd shifts in Fair Value for "F".

 

[Steadygain]

Nasa1974,
It's great to see you back!

Also thank you for your kind and thoughtful expressions to both me and my brother and sister.

 

[Guest2]

My friends. Thank you.
I have relaxed since this morning.
I am home alone. My wife and two daughters are working late this evening. So I am sitting here in front of this stupid monitor eating homemade chicken soup. It does seem to have a therapeutic affect.
After reading your inspiring comments I realized an error on my part. The omission of two words... "for awhile". My apologies.

Lady, I have no words to express my gratitude for your post except to say thank you, again. You truly deserve the "XL-ent" in front of Lady.
Steady, Your words are the calming and spiritual realities in a world out of sync. It took me a little while to understand why you are part of this MB.
SB, My mentor and Jedi Master. Thank you for showing this apprentice the true meaning of the Force.
I hope one day that I will be able to be not just a member of this MB but a friend to many and family to some.
The force is truly with the three of you.

Group Hugs Are The Best Medicine !

 

[wv-girl]

Here is the link to the FRTIB's August meeting minutes. http://www.frtib.gov/pdf/minutes/2008Aug.pdf They are talking more trade restrictions. Here is a partial copy from the meeting minutes.

"c. Investment Policy Review.

Ms. Ray reviewed the August 8, 2008 memorandum (attached), entitled "July 2008 Performance Review - G, F, C, S, I, and L Funds."
She noted that the I Fund had a tracking error of 54 basis points, primarily due to a fair value adjustment. Year-to-date, the I Fund has underperformed its index by 23 basis points. This is due to the fair value adjustment and the tax effect. Trading costs for the I Fund were $2.8 million in July. These costs stemmed from a $200 million trade made before the 4th of July but not executed until July 7th. This single
trade cost $3.8 million to execute. She added that this expensive trade demonstrates why we needed to institute trading restrictions rather than impose trading fees. That is, we can't predict trading costs because timing affects everything. Mr. Long stated that this is the hypothetical he had posed to the
Board-a large trade over a long weekend with a volatile market. Although this was a large trade, it might have been significantly larger had we not implemented trading restrictions. Chairman Saul asked whether the Agency could have minimized this
expense. He was told that trading restrictions should limit, but cannot eliminate, such events."​

Has anyone explained what the "tax effect" is??​

The FRTIB still has issues on the cost per trade. Maybe they should have a provision in the next contract that reduces what can be charged per trade instead of restricting us.
They are also talking a lot about the "L" funds. I think if they could they would put everyone into "L".
They seemed confused on the amount of trading going on. Hello, those of us that have been in TSP since day one are getting ready to retire and are looking to feather the nest.:blink:​

September's meeting minutes should be an interesting read as well. I will post the link as soon as I see the minutes are out.​

The numbers don't make sense. How could the single trade be more than the whole month of July she report in the sentence above it? What happened to the extra 1 million?:worried:

 

[Guest2]

Here is the link to the FRTIB's August meeting minutes. http://www.frtib.gov/pdf/minutes/2008Aug.pdf They are talking more trade restrictions. Here is a partial copy from the meeting minutes.

I guess the talk of trade fee's didn't happen until September. Tom asked

me to check out (validate) the rumor of fee's per trade. I found a link,
emailed the person who stated such within a retirement seminar. Last but
not least, I posted his response within this thread;​

http://www.tsptalk.com/mb/showthread.php?t=6220&highlight=Transfer+Fee&page=6

I've come to expect dogcrap on my shoe when walking the dog. When
reading the FRTIB Minutes, I expect the same, if not more ! Pooooh !:suspicious:​

​

 

[fabijo]

The numbers don't make sense. How could the single trade be more than the whole month of July she report in the sentence above it? What happened to the extra 1 million?:worried:

She failed to mention that the FV adjustments also give back millions of dollars on occasion. So, one day the trade might cost $3.8 million, but another day the trade may gain $4 million.

 

[wv-girl]

She failed to mention that the FV adjustments also give back millions of dollars on occasion. So, one day the trade might cost $3.8 million, but another day the trade may gain $4 million.

Thanks Fabijo. Just another example of Tracey Rays inability to handle the job. And to manipulate the numbers to justify their actions.

 

[nasa1974]

She failed to mention that the FV adjustments also give back millions of dollars on occasion. So, one day the trade might cost $3.8 million, but another day the trade may gain $4 million.

Fabijo, What you are saying is true about FV (I am still somewhat confused how FV works) but the $2.8M or $3.8M (whichever is correct) is the trading cost, that is what it COSTS the FRTIB to have the trades made for the TSP members. Just like you pay $7.00 per trade with *Etrade or whoever you would us.

 

[XL-entLady]

...I am still somewhat confused how FV works....

That's good, I was hoping I wasn't the only one! :embarrest: I bookmarked Squale's definition the other day but my understanding is at least nebulous at this point.

In accounting terminology, Fair Value is a "term of art" defined by GAAP (Generally Accepted Accounting Principles, the 'bible' of accounting). It basically means what you could sell an asset for on the open market.

In reading about fair value as it applies to financial markets, it seems to be kind of the same thing, but I'm still having trouble making sense of what I'm supposed to do with the information. So I'll have to keep at it until the lightbulb finally comes on. Unless I've burned out a filament.:cheesy:

Lady

 

[wv-girl]

Fabijo, What you are saying is true about FV (I am still somewhat confused how FV works) but the $2.8M or $3.8M (whichever is correct) is the trading cost, that is what it COSTS the FRTIB to have the trades made for the TSP members. Just like you pay $7.00 per trade with *Etrade or whoever you would us.

The report makes it sound like one investor is responsible and we all know that is not true. I am sure she meant the collective group of tspers who were involved on that particular day. If they would show a balance sheet I (and others) would not be so confused about what they are really doing.

 

[wv-girl]

Fabijo, What you are saying is true about FV (I am still somewhat confused how FV works) but the $2.8M or $3.8M (whichever is correct) is the trading cost, that is what it COSTS the FRTIB to have the trades made for the TSP members. Just like you pay $7.00 per trade with *Etrade or whoever you would us.

I think they used to base it on what they could sell the assets for on the open market the next day--meaning the overseas market. i.e. They were posting I fund prices (at the close of US Markets )and guessing what they could sell them for on the OS Markets later that night. They made some pretty serious wrong guesses and lost a lot of money. Who knows what their exact formula is--probably still just guessing. But if you notice they are taking longer and longer to post the end of day prices here in the US. Hope that doesn't add to the confusion.

 

[fabijo]

Fabijo, What you are saying is true about FV (I am still somewhat confused how FV works) but the $2.8M or $3.8M (whichever is correct) is the trading cost, that is what it COSTS the FRTIB to have the trades made for the TSP members. Just like you pay $7.00 per trade with *Etrade or whoever you would us.

Since the markets overseas close a few hours before us, there are times when Barclays just decides that by the time the markets open again, it may cost more or less to buy the stocks that make up the I Fund. The FV happens when a big change in the U.S. stock market or in the value of the dollar vs. other currencies happens after the overseas markets close.

As far as trading costs, it gets tricky because Barclays has to guess on what the foreign prices will be by the time the foreign markets open the next day. Let's say that at noon, everything was flat. The internationals closed flat, the currencies stayed relatively flat, and the U.S. stock market was flat. But then a major event happened around 2pm that sends the stock market tumbling 3%. So, then that night, when TSP publishes the I Fund price for the day, instead of it showing up flat, they made it go down about 3% to guess that the Asian and European markets will follow suit. Now let's say that before noon earlier that day, a bunch of TSP participants made an IFT out of I Fund.

So, instead of the TSP participants selling the I Fund at a flat price, they are selling it at a 3% loss. Now if Barclays guessed right, the trading costs associated with that IFT would be just like a normal day. If Barclays made the price too cheap (e.g. the internationals only went down by 1%), they get to sell those shares for than they bought them from you, so the trading costs get offset by the gain they just made. That's how there are days where instead of trading costs, there is profit - only it doesn't get passed on to those who got ripped of. If the internationals ended up going further negative than the 3% Barclays anticipated, then the trading costs go even more negative, since they bought the shares from you at a 3% loss, but have to sell them at a lower loss (e.g. the internationals go down by 5%). That's the scenario that will get pointed out more often, and they'll say you are costing all the TSP participants millions of dollars, but they rarely point out that you sometimes give TSP participants millions of dollars.

It's that simple. :blink:

 

[XL-entLady]

Since the markets overseas close a few hours before us, there are times when Barclays just decides that by the time the markets open again, it may cost more or less to buy the stocks that make up the I Fund. The FV happens when a big change in the U.S. stock market or in the value of the dollar vs. other currencies happens after the overseas markets close.

Thank you, Fabijo! Much clearer now!

Lady

 

[nasa1974]

OK!! I haven't read anybodies accounts yet. But what the hell just happened?????? Monday the market TANKS because the bailout fails. Tuesday there is a nice rally. The Senate passes the bailout Wednesday and the market TANKS. Thursday is a down a little, sort of expected. Friday in anticipation of the bailout passing the market rallies. Not big time but almost enough to cover the Wednesday & Thursday sell off. The bailout passes and the market TANKS. Who is running this asylum?????????? AAAAAAAAHHHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!!!!!

"They're coming to take me away haha, hehe hoho!!! They're coming to take me away................."

 

[Miss_Piggy]

.....Who is running this asylum?????????? .......

Don't know if your question was rhetorical, nasa1974 but it's: The Masters of the Universe

http://www.nytimes.com/2008/09/28/opinion/28wolfe.html​

http://thescotsman.scotsman.com/latestnews/-How-the-Masters-of.4494032.jp

 

[akpackfan]

I give up..... I went 50% in end of last week in anticipation of the bill passing and a big up day..... lost A LOT of money.....

Stayed in and put another 25% in yesterday COB in anticipation of a sure thing that the bill would pass and we'd get a big rally....this morning I saw the market was already up good so I took the 25% back to G COB to lock some profits......you know the rest....

I guess I pretty much don't know what I'm doing with market timing in my TSP account. I have tried a few times this year to do it and failed miserably EVERY TIME!! I think I'm meant to be a buy and holder. Not smart enough, I guess. I guess I'll leave the 50% in and hope the market turns soon so I can get my losses back and then rethink my TSP strategy. Maybe I'll pay one of you guys to manage it for me!!:toung:

 

[poolman]

I give up..... I went 50% in end of last week in anticipation of the bill passing and a big up day..... lost A LOT of money.....

Stayed in and put another 25% in yesterday COB in anticipation of a sure thing that the bill would pass and we'd get a big rally....this morning I saw the market was already up good so I took the 25% back to G COB to lock some profits......you know the rest....

I guess I pretty much don't know what I'm doing with market timing in my TSP account. I have tried a few times this year to do it and failed miserably EVERY TIME!! I think I'm meant to be a buy and holder. Not smart enough, I guess. I guess I'll leave the 50% in and hope the market turns soon so I can get my losses back and then rethink my TSP strategy. Maybe I'll pay one of you guys to manage it for me!!:toung:

Take it easy and watch the MB leaders... I don't have grey hair for nothing....


I have 2 Full Time Job's.... I'm Tired.....:embarrest:

 

[nasa1974]

I give up..... I went 50% in end of last week in anticipation of the bill passing and a big up day..... lost A LOT of money.....

Stayed in and put another 25% in yesterday COB in anticipation of a sure thing that the bill would pass and we'd get a big rally....this morning I saw the market was already up good so I took the 25% back to G COB to lock some profits......you know the rest....

I guess I pretty much don't know what I'm doing with market timing in my TSP account. I have tried a few times this year to do it and failed miserably EVERY TIME!! I think I'm meant to be a buy and holder. Not smart enough, I guess. I guess I'll leave the 50% in and hope the market turns soon so I can get my losses back and then rethink my TSP strategy. Maybe I'll pay one of you guys to manage it for me!!:toung:

akpackfan, For writing puposes we have to shorten your name. I like akpack. Anyway! Do not give up. There is a lot of learning to do and some great teachers on this MB. Some of the pretty smart members lost some good money the last couple of days. The market is not reacting to logic and statistical analysis.:nuts: It is not a loss until you sell. I have been 10% G, 45% C & S since September 3rd. I have lost almost 15% of my account since mid-August. I got my fingures crossed just to break even. Most everyone was surprised or maybe more shocked by todays market blowup. Some smart people are still talking about a good ride on the rally train next week. I hope to be on that train. Good luck and welcome aboard.

 

[nasa1974]

Just had to post something. I didn't like being on the 3rd page.

Hey maybe we can blame "inthemoneystocks".com for this market mess. Yeah that's it, we can blame them. Since they went over to their own website the market has gone belly up. :nuts: Yeah! I like that idea.