optionman's Account Talk

[nasa1974]

squalebear,

You're right the 2 IFT limit applies to all funds including the G fund. The unrestricted part comes in if you happen to be in a fund other than the G fund on your second IFT and decide to move all or part of your money to the G fund for safety.

When the limits were first published I thought the rules were somewhat ambigous too and researched this. I found a document on the TSP site that lays it out. If you search around the site you will probably find it pretty quickly. Good luck and thanks for staying tuned.

optionman

So this almosts forces you to be be in the G fund before the start of each month.

 

[Braveheart]

The way I see it POSSIBLE since wording isn't 100% clear loop hole

is say you are 40% C Fund 40% S Fund 20 % I Fund

the way around the rule is 1st IFT 50% C Fund 50% S Fund

2nd IFT -- 10% G Fund 50% C Fund 40% S Fund

3rd IFT -- 20% G Fund 40% C Fund 40% S Fund

4th IFT -- 30% G Fund etc. etc.

So what if your 100% S Fund and already used up your transfers the TSP will lock you out even if you need to get to safety in a Market Crash !!!

 

[luv2read]

So what if your 100% S Fund and already used up your transfers the TSP will lock you out even if you need to get to safety in a Market Crash !!!

FALSE. Transfers to G fund are unlimited. You can ALWAYS move 1%-100% to G fund even if you have already made two unrestricted transfers and one restricted (meaning to G) for the month and still have money in the other funds. So you can DCA into G fund all month - or panic and move it all if you want. You can't "use up all your transfers to G." The rule states they are unlimited.

 

[luv2read]

Why do I get this funny feeling that if your 1st move is back to the (G), it would count towards your 2 move limit. Once the 2 move limit is reached, then, you go back to the (G) as many time as you want thereafter.

It's not as clear as it should be, is it. I'm sure someone will try it that way and let us know, one way or another.

You get two UNRESTRICTED (meaning to ANY fund including G) IFT's per month. If you still have money in funds other than G after that, then you can make as many moves to G as you want for the rest of the month - but you can't move money OUT of G.

Think of it as a 2+G rule.

 

[Reactive1]

A move to the G WOULD count as one of two moves in a month. Any move within a month, if it were move ONE or move TWO, would count as a move regardless of what the move is. So, strategically, you have to obviously pay attention to the "time of the month" (sorry) and what that will limit you to with time remaining. Once a person hits two moves, the only move that can be made is a move to the G fund. That doesn't mean it has to be a complete move, but the only move can be to G.

From the TSP website:

For each calendar month, the first two IFTs can redistribute a participant’s account among any or all of the TSP funds. After that, for the remainder of the month, participants may only move money into the Government Securities Investment (G) Fund (in which case the participant will increase the percentage of the account held in the G Fund by reducing the percentage held in one or more of the other TSP funds).
We will count the interfund transfer based on its process date, not the date the interfund transfer is requested.
If the first or second interfund transfer in a month moves money only to the G Fund, it still counts toward the two (2) unrestricted interfund transfers per month limit.

 

[luv2read]

A move to the G WOULD count as one of two moves in a month. Any move within a month, if it were move ONE or move TWO, would count as a move regardless of what the move is. So, strategically, you have to obviously pay attention to the "time of the month" (sorry) and what that will limit you to with time remaining. Once a person hits two moves, the only move that can be made is a move to the G fund. That doesn't mean it has to be a complete move, but the only move can be to G.

From the TSP website:

For each calendar month, the first two IFTs can redistribute a participant’s account among any or all of the TSP funds. After that, for the remainder of the month, participants may only move money into the Government Securities Investment (G) Fund (in which case the participant will increase the percentage of the account held in the G Fund by reducing the percentage held in one or more of the other TSP funds).
We will count the interfund transfer based on its process date, not the date the interfund transfer is requested.
If the first or second interfund transfer in a month moves money only to the G Fund, it still counts toward the two (2) unrestricted interfund transfers per month limit.

That's what I said. Two unrestricted moves to any fund INCLUDING G. So don't "waste" those two moves by going to G unless you have to. You can always DCA or go 100% to G after you've reallocated your equities with the two unrestricted moves. That's the "2+G" idea.

 

[optionman]

IFT

My bond fund signal remains on a sell, but there is a strong possibility that it will move to a buy soon so I’m moving to 100% F fund today.

This is my second IFT in April.

 

[airlift]

Thanks for posting.

 

[mojo]

Right behind you. Thanks

 

[optionman]

Weekly Update & IFT

TSP: YTD +7.67% Position/Allocation: 100% F fund as of 29 Apr 08.

SPX finally broke through its 1400-1410 overhead resistance and looks strong here but appears a little overbought. I expect a pullback and if we get one would like to see it hold at recent support in the 1380-1400 area. If it pulls back as expected and support holds I’ll look for an entry point into stock funds. In the meantime, I don’t like some of the characteristics I’m seeing on the bond fund charts so I’m moving back to 100% G fund Monday and will stand aside for now.

Although I expect a pullback it doesn’t actually have to happen. Last week I expected a pullback also but the market was able o work off its overbought condition by consolidating in a tight range and that could happen this week again so I’ll wait and see how the first part of the week shakes out before deciding if it’s time to enter or wait.


ETF: YTD -12.73% Position: No position

I finally thru in the towel and closed my Q’s position taking a loss (shorted on 18 April for $46.37 and covered on 2 May for $48.55).


optionman

 

[hessian]

Hello Optionman,
I have to admit Friday's Bond funds 10-yr ($TNX), 30-yr ($TYX) and $AKG (http://stockcharts.com/h-sc/ui?s=$AKG&p=D&yr=0&mn=5&dy=0&id=p55192775979) - the latter representing our F-Fund, all looked well, strange to me also -especially the latter (link above)!!!

Robo had shared the following - http://market-ticker.denninger.net/, where below is an excerpt - and I was wondering your take/opinion on whether/how this might be related to that day's behavior - the specific part that alarmed me so is what follows:
"Well, today [Friday, May 2] we find out that S&P will no longer rate 2nd line debt, citing "anomalous" behavior. What is that "anomalous" behavior? Specifically, people walking away. And the performance of that debt is rather simple:
"The downgrades last month left all of the securities with ratings of BBB or lower, compared with 20 percent before the action. BBB is S&P's second-lowest investment grade. About 96 percent dropped to non-investment-grade, or junk, assessments.

'The problem with seconds is it's either good, or it's zero,'' said Brad Golding, a managing director at Christofferson Rob & Co., a New York-based money manager."
​

There's no middle ground, and S&P can't figure out which is which . That puts a nail in the coffin formed in the belief that you can simply look at FICOs or other forms of consumer "behavior" to figure out who's going to default and who's not.
Did 'ya read that underlined part? Go back and make sure you do. All of this debt is rated BBB of worse - 96% of it worse. BBB, you see, is the lowest "investment grade."

I'm trying to determine if this a huge crisis brewing -or just a "blip" that shouldn't affect out F-Fund? :worried:
Very much appreciate any kind of reply/opinion on both the chart activity, and on the effect of above downgrading of ratings!
VR

 

[Braveheart]

Hello Optionman,
I have to admit Friday's Bond funds 10-yr ($TNX), 30-yr ($TYX) and $AKG (http://stockcharts.com/h-sc/ui?s=$AKG&p=D&yr=0&mn=5&dy=0&id=p55192775979) - the latter representing our F-Fund, all looked well, strange to me also -especially the latter (link above)!!!

Robo had shared the following - http://market-ticker.denninger.net/, where below is an excerpt - and I was wondering your take/opinion on whether/how this might be related to that day's behavior - the specific part that alarmed me so is what follows:
"Well, today [Friday, May 2] we find out that S&P will no longer rate 2nd line debt, citing "anomalous" behavior. What is that "anomalous" behavior? Specifically, people walking away. And the performance of that debt is rather simple:
"The downgrades last month left all of the securities with ratings of BBB or lower, compared with 20 percent before the action. BBB is S&P's second-lowest investment grade. About 96 percent dropped to non-investment-grade, or junk, assessments.

'The problem with seconds is it's either good, or it's zero,'' said Brad Golding, a managing director at Christofferson Rob & Co., a New York-based money manager."
​

There's no middle ground, and S&P can't figure out which is which . That puts a nail in the coffin formed in the belief that you can simply look at FICOs or other forms of consumer "behavior" to figure out who's going to default and who's not.
Did 'ya read that underlined part? Go back and make sure you do. All of this debt is rated BBB of worse - 96% of it worse. BBB, you see, is the lowest "investment grade."

I'm trying to determine if this a huge crisis brewing -or just a "blip" that shouldn't affect out F-Fund? :worried:
Very much appreciate any kind of reply/opinion on both the chart activity, and on the effect of above downgrading of ratings!
VR

Good Lord --- I am out of the F Fund today after reading the link you gave with Robo. This would also turn all the L Funds into trash since they are part of the F Fund. If what was written is only 50% right that F Fund would drop like a brick. The yields would be out of control and not many trust the Fed as it is so why would America invest in the 10 year note or 30 year note etc. Folks might say it's different with the F Fund but we are talking about a lack of trust and many would go to cash before Bonds. JMO THX - Braveheart !!!

 

[optionman]

Hello Optionman,
I have to admit Friday's Bond funds 10-yr ($TNX), 30-yr ($TYX) and $AKG (http://stockcharts.com/h-sc/ui?s=$AKG&p=D&yr=0&mn=5&dy=0&id=p55192775979) - the latter representing our F-Fund, all looked well, strange to me also -especially the latter (link above)!!!

Robo had shared the following - http://market-ticker.denninger.net/, where below is an excerpt - and I was wondering your take/opinion on whether/how this might be related to that day's behavior - the specific part that alarmed me so is what follows:
"Well, today [Friday, May 2] we find out that S&P will no longer rate 2nd line debt, citing "anomalous" behavior. What is that "anomalous" behavior? Specifically, people walking away. And the performance of that debt is rather simple:
"The downgrades last month left all of the securities with ratings of BBB or lower, compared with 20 percent before the action. BBB is S&P's second-lowest investment grade. About 96 percent dropped to non-investment-grade, or junk, assessments.

'The problem with seconds is it's either good, or it's zero,'' said Brad Golding, a managing director at Christofferson Rob & Co., a New York-based money manager."
​

There's no middle ground, and S&P can't figure out which is which . That puts a nail in the coffin formed in the belief that you can simply look at FICOs or other forms of consumer "behavior" to figure out who's going to default and who's not.
Did 'ya read that underlined part? Go back and make sure you do. All of this debt is rated BBB of worse - 96% of it worse. BBB, you see, is the lowest "investment grade."

I'm trying to determine if this a huge crisis brewing -or just a "blip" that shouldn't affect out F-Fund? :worried:
Very much appreciate any kind of reply/opinion on both the chart activity, and on the effect of above downgrading of ratings!
VR

hessian---I looked at both the chart and article. One would take away from the article that a huge crisis is brewing, but I tend to let the charts tell me more. I generally use AGG to track the bond fund so I compared AGG with $AKG. In both cases I would be looking at bonds only from the short side here, hence my getting out. One positive at least for a day is the $AKG is flashing what is known as a bullish kangaroo tail (a long tail below the candle) which in many cases portends an up move (it is just the opposite for a bearish kangaroo tail) so hopefully bonds will move up today and I exit on strength rather than weakness. If it does move up it could rally for a few days, but I won't take a chance on it. My order is in, I'm back in the G fund as of the close today. I wish you good luck!

optionman

 

[Braveheart]

Just heard Barclays is betting huge against the 10 year note since April 2008 on Bloomberg. They are gambling big with junk bonds and pushing the yield up on the 10 year note.

Since they are connected with our money all the L Funds and the F Fund that is a direct conflict of interest. They know how many Billions are in the L Funds and the F Fund every day. I will update with a link but that news just broke 10 minutes ago.

 

[Braveheart]

Just heard Barclays is betting huge against the 10 year note since April 2008 on Bloomberg. They are gambling big with junk bonds and pushing the yield up on the 10 year note.

Since they are connected with our money all the L Funds and the F Fund that is a direct conflict of interest. They know how many Billions are in the L Funds and the F Fund every day. I will update with a link but that news just broke 10 minutes ago.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aNCksVzJxRZA

Dealers Pare Treasuries, Signaling Fed Turning Point (Update1)

By Daniel Kruger
May 5 (Bloomberg) -- One word popped into Charles Comiskey's head as he watched investors seeking a haven from credit-market losses pile into Treasuries in March: ``Ridiculous.''
The buying spree pushed yields to a five-year low even though rising commodity prices and a depreciating dollar were beginning to spark inflation. The co-head of Treasury trading at HSBC Securities USA Inc. has so far been proven right. U.S. government debt has lost 2.8 percent since March 17, including reinvested interest, according to New York-based Merrill Lynch & Co. indexes.
``Rates got ridiculous,'' said Comiskey, who is based in New York and started trading in 1989.
The U.S. units of London-based HSBC Holdings Plc, Barclays Plc of London, Deutsche Bank AG in Frankfurt and the other 17 primary dealers that trade with the Federal Reserve have compiled a $101.4 billion bet against Treasuries, data compiled by the central bank show. That's the most since the week ended Nov. 14, just before yields on 10-year notes climbed half a percentage point over the following month.
Dealers have used any demand ``as an opportunity to move Treasuries off their balance sheets,'' Comiskey said.
The $101.4 billion represents the amount of Treasuries that dealers are using to hedge other positions and is up from $58.3 billion in the week ended March 12, Fed data show. The more they use to hedge, the bigger the wager against Treasuries.

 

[Braveheart]

BARCLAYS & THE F Fund & L Funds

The U.S. units of London-based HSBC Holdings Plc, Barclays Plc of London, Deutsche Bank AG in Frankfurt and the other 17 primary dealers that trade with the Fed have compiled a $101.4 billion bet against Treasuries, data compiled by the central bank show. That's the most since the week ended Nov. 14, just before yields on 10-year notes climbed half a percentage point over the following month.
The bet represents the amount of Treasuries that dealers are using to hedge other positions and is up from $58.3 billion in the week ended March 12, Fed data show. The more they use to hedge, the bigger the wager against Treasuries.

 

[Silverbird]

BARCLAYS & THE F Fund & L Funds

The U.S. units of London-based HSBC Holdings Plc, Barclays Plc of London, Deutsche Bank AG in Frankfurt and the other 17 primary dealers that trade with the Fed have compiled a $101.4 billion bet against Treasuries, data compiled by the central bank show. That's the most since the week ended Nov. 14, just before yields on 10-year notes climbed half a percentage point over the following month.
The bet represents the amount of Treasuries that dealers are using to hedge other positions and is up from $58.3 billion in the week ended March 12, Fed data show. The more they use to hedge, the bigger the wager against Treasuries.

Well, I can understand to some extent, they wouldn't want to have their investments in U.S. bonds right now if their base currency is British Pounds (Japanese and Chinese are not buying $ denominated bonds, see my other postings). But makes me not interested in F, definately....

 

[airlift]

Optionman,
Although yours seems to be an analysis geared closier to technical than fundamental, you seem to have caught the essence of a potential storm surrounding the F fund or AGG. I don't want to go into panic mode, but these last articles regarding Barclay and Deutschebank seem to lend credence to your decision to go into the G instead of the F fund. Guys keep posting and see if Bernanke's testimony clarifies or confirms the brewing Bond storm. Tia.

 

[luv2read]

Well, I can understand to some extent, they wouldn't want to have their investments in U.S. bonds right now if their base currency is British Pounds (Japanese and Chinese are not buying $ denominated bonds, see my other postings). But makes me not interested in F, definately....

Does this affect G fund in any way? Isn't the G fund Treasuries? Would it make yield go up, and be GOOD for G Fund?

 

[airlift]

Partial explanation:
If foreign purchases stop and they stop buying treasuries or other U.S. assets, bond yields would rise, the price of AGG and the F fund would drop, and the cost of living would rise further in the U.S.