oldschool account talk

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Asian markets down today, Euro markets seem to be following down too. Some talk that it's caused by same thing US markets seemed to focus on yesterday -s weaker energy and metal prices leading to declines in oil and mining shares.

Government bonds seemed to be going up - investors in a mini-flight to quality? Maybe they don't like the recent down swings in equities/gold/oil...

Even Germany has helped bonds a bit - the January numbers for its economy not as strong as anticipated....

Anyway, buying a little bit into the downtrend each of the last several days, but still majority in G and F. If there's not a bounce today or tomorrow, I'm thinking F may start to look pretty good to more folks - so I'm partially there now ;)

at cob today will be g28 f34 c16 s 11 i 11
 
Hmm. G interest rate going up (based on change in loan rate it charges those who borrow from their tsp accounts). Maybe with equities looking like they're going down again today continuing off yesterday, some folks will want my F fund bonds for a little more "security". So, I'll let 'em have 'em, and pick up some more G in hopes it pays Monday.... Also hard to resist picking up a tiny bit more C as it looks like C could bounce off its lows earlier this week.
 
Helicopter man to talk...

The week ahead: Helicopter Ben speaks to Congress - I think it's on Wed. Now his old boss Alan has already had his say last week at Lehman Bros. - no one's every quite sure what Alan actually says, but the press reports on the "private" comments indicated it was along the lines the Fed will need to raise interest rates for a longer period than the markets expect. Alan apparently also said the housing market will take a hit. Funny though, if Alan right about more interest rate hikes, and especially if Ben sings the same tune this week, there will continue to be little inflation risk in the long bond - because the Fed is on the job - so interest rates for home mortgages will remain lower than otherwise, and some of the threatened housing market weakness will bill pushed off further into the future. Anyway, it's hard for me to see how Ben will be able to say anything that will make the markets happy. Particularly since the markets have zero experience interpreting his statements as Chairman.... All this makes me inclined to be a bit cautious for the near/mid term. One of the most worn Wall Street sayings "don't fight the Fed" keeps running through my head...
 
a little more I, a little less F, a tiny bit more G...

I believe I'm moving towards a bigger I position as opportunities present over the next days/weeks.

We'll see...
 
nice move in F today, 5 years, F fund, had been getting a little beaten up. Fed hasn't really changed its tune, so they don't seem any more fearful of inflation than a month ago. and I'll bet they have at least as good info on the economy as we read on the 'net. Today maybe some folks coming around to that view - or?
 
may be time for a little more caution. iraq looking worse, president weakened by attempt to give port business away to Dubai without checking with mayors, senators, of affected states/cities. markets hate uncertainty. is fed going to do 2? 1? technicals looking less clear to me too. some posters think we're set for a breakout move - I don't see the catalyst for that, unless folks want to decide all will agree real estate has had a little short term illness that has already passed. and I don't think that's what the moving averages would say - rather, the real estate trends, while maybe up, are softening in the manner that matches the start of other real estate downturns.
 
So let's handicap tomorrow. Japan faces rising rates, today's slide in US equities - hard to see a bounce there overnight. Eurozone - will wait on what happens in US markets tomorrow - and hard to see where a US bounce will come from tomorrow given the large volume in US markets today...

So, if tomorrow does play out down, is it a chance to get in cheap, or a warning to look out below. Hmmm.

Oh yeah, lots of houses for sale, even at current interest rates. When Bank of Japan raises rates soon, and China starts implementing it "diversify away from US dollars policy" announced this week, won't matter what the Fed does, long term rates in US likely to rise. Then lots and lots of houses will be for sale.

There, I've answered my question. Odds favor "look out below". I've been wrong before of course...
 
Wrong again...sorry.

With the pace of the Japanese policy shift likely to be glacial and the timing of watershed changes uncertain, it could be years before the full impact is revealed. Think longer term. The gradual removal of ultraloose policy from the world's second-largest economy is going to be one of the great stories over the course of the next three or four years. The capital flow implications, the effect on U.S. interest rates, on Japanese domestic markets are all to be sorted out.

In the longer term, it is still unclear how long the BOJ will take to completely remove quantitative easing, when the bank will lift interest rates or whether an eventual rate-tightening cycle would be brief or protracted.

A gradual adjustment is all the more probable because Japan is just one source behind the currently high global liquidity levels which have kept U.S. long term rates low and demand for high-yield and emerging market assets strong. So after more than a decade of near-zero interest rates and five years of quntitative easing - the injection of trillions of excess yen into the banking system to defeat deflation- the BOJ has finally sent strong signals recently that they are ready to start slowing the reins of monetary policy. My bet is a lot of patience will be required and that this process will ripple through global capital markets for years to come. They are in no hurry and the Nikkei has a long way to go before any top is visible. Good luck with trying to pistol shoot the I fund.
 
one day at a time

My task is a simpler one. Each day I ask whether I want to continue my current allocation. In the long run we're all dead, so I focus on one day at a time.

On FX issues, the US is paying what it needs to attract loans in the current global interest rate environment. But if central banks are promising higher rates in the near future, that flows throught to current US rates, just like expected future earnings drive today's equity prices.

Btw, the 5 year average return for the C fund is about .25% right now.

My self-appointed task is to surpass the C fund return every year. Done that, sometimes by a whisker, sometimes by a healthy margin, for quite a few years so I'll stick with my approach. Though I'm sure saying that here is an invitation to Mr. Market to hammer my account....
 
Farewell to the zero zone: Japan ready to resume normal rates

By Deborah Cameron Herald Correspondent in Tokyo
March 1, 2006


AFTER five years of zero interest rates, the Bank of Japan appears to be planning a change to monetary policy. All that matters is the timing, market players say.

The change, possibly as early as this month, will be confirmation that the bank believes deflation is over and Japan's economic recovery is sustainable.

Full story is a good read - it's at

http://www.smh.com.au/news/business/japan-ready-to-resume-normal-rates/2006/02/28/1141095743731.html
 
still holding 100g. I missed the nice move up, resisted trying to chase it. today's middle of the day head fake didn't even tempt me. maybe I have "market fatigue." on a day like today the 100g position feels pretty good. Up 4+% for the year, and parked in G. ignoring the account until the end of the year would result in around 8-9% return. tempting, unless Birch's rumored strong bull gets running along the way....

I won't just park it though. Watch the fundamentals, flavor the soup with some technicals, follow the global political developments, and invest/allocate as warranted, that's my program....
 
Entered ift to move from 100g to 75g 15c 10i at cob today. Following the market, but with caution. Jobs info good this morning, maybe will hit the F fund so there could be a short term play there, but I'll be traveling some the next week so need a park it and ignore it position. Hope I have it now.
 
Well, well. Houses are selling, consumers are happy, businesses are buying. Starting to look like more risk of higher interest rates. Think I'll nudge a bit towards safety today. Adding 15% to G, reducing F, C, and I by 5% each. After today's IFT will be G 25%, F 20%, C 30%, and I 25%. Nothing brilliant here, but F feeling the pressure of the stronger than expected economy, I fund likely will feel effects of a stronger dollar for a few days....Canada raised rates yesterday...hmmm.
 
start to go away from the market? sell in may...

let's see, 401k money came in in January, last minute ira money came in the last few weeks, hmm. Buyers all done?

A little nudge towards caution seems warranted. Mr. Market may prove otherwise, we'll see...
 
I see a lot of folks jumping in to stock funds today, and you're lightening up on stocks. Isn't this fun? :)
 
"fun" maybe isn't exactly the sensation...

Bernake forgot to check in with me before he announced the Fed might "pause"... The nerve of that guy.
 
going to 100 i today - today's news on oil suggests demand won't be so great in coming months, so maybe the "slowing" the central banks are looking for is already in process and further rate hikes around the world will come at us a little slower. So maybe the dollar down trend will slow a bit, but also there may be a slower switch from foreign equities into foreign bonds. 'course if I knew, I'd be a trader not a tsp allocator...
 
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