What YOU can do to fight back - IFT limit

[James48843]

How about a summary of where we are right now.

OK- well, were here. And we're still alive. But there is not a lot of ammunition in the box at the moment.

To summarize some recent data- it's like this:

They held the meeting in January, but did not release the December's board meeting minutes until last week- about three weeks later than usual. I suspect they are very cognizent of our inspection of the board meeting minutes, in part because we zapped them very well on the last set. So they were very light on hard data this time around.

They did NOT include the data on the number of interfund transfers in November (December's minutes cover November's trading activity). I suspect it was DOWN considerably- and that manifested itself in a negative trading error figure that was pretty substantial. However, I can't PROVE that the reduced trading volume led to the worse tracking errror, because they stopped posted the actual data on the volume of trades.

So in effect one of the best tools to hit them with- the actual data, has been hidden. I also suspect that when December's data comes out, it too will show higher tracking error costs due to reduced trading volume, but I predict that they won't publish the actual volume of trading in the next set of minutes either.

They met this past week, on the 19th, but only a trickle of information has flowed out since then. All the information is is that they are still on track to limit trades, perhaps in late March or sometime in April, and they say they will publish another federal register notice before they actually limit anything. Unfortunately. without more hard data, it will be hard to refute their statements with actual proof.

One thing that showed up is Greg Long's repeated un-understanding (is that a word?) of the volume of turnover. Long said there was 100% turnover, and that simply is not true. But he's comparing I fund interfund transfers ( only a half of one percent- to a one percent at a crack move one way or the other) with "porfolio turnover", which is a completely different beast.

Let me try to explain that.

Because our folks are in and out of the I fund, that last percent or so is being held as liquid capitol. IN fact, that was part of the reason Barclays last fall asked for, and got, permission to use ETF's instead of actual stock shares for some of the I fund holdings. It allows them to trade in and out, (or rather to buy or sell the ETFs) without actually having to hold the shares themselves, with the entailing three day hold period. That way Barclasy can caputre MOST of the gains or losses of the I fund shares, without actually haing to buy or sell the shares themselves. Instead, they trade the VALUE of the shares through an ETF. In such volatile market times, Barclays loses a bit of the luster because of demand flucuations. However, it works out better than the actual buying and selling of shares in more normal times.

In short- it works like this:

Only about 1% of the fund is being held out of shares to do this moving around. The other 99% remains fully invested in I fund stocks. Sop in reality there is only about a 1% "turnover" in stocks.

But Tracey Ray told him 25 billion dollars had been traded. And SHE thinks that means 25 BILLION has been bought and sold. IN reality, it was a half-billion bought and sold fifty times. Big difference, but you can't get Tracey Ray nor Greg to understand the difference.

Now, a fund like Vanguard actually DOES have turnover- and they calculate it much differently.

(more)

 

[James48843]

So how does a 100% "turnover", as described by Greg Long as something bad, compare when you do an apple to apples comparison to Mutual funds?​

Here is a chart- from Lipper, back in 2004:​

View attachment 3357​

It turns out that a 100% turnover over the course of a year puts us right abount in the middle of the pack as far as the funds studied by this Lipper analyst as far as trading goes- between the 4th and 5th "decile" . But then note the costs- the average is between 29.5 basis points, and 28 basis points. TSP's I fund is just 8 basis points - or WAY BELOW average in costs.​

The whole report from Lipper on the costs and turnover of the Mutual fund universe this one analyst was able to compile back in 2004 is located here:

http://pdf.forbes.com/media/pdfs/2005/0105funds.pdf

 

[James48843]

What needs to happen right now? Do we need to send out more letters? Is there any looming meetings? I've lost track. Or, are we waiting on the Federal Register posting to comment there?

At the moment, I think we continue to try and shed daylight on the fact that Greg Long ( or more directly, Tracey Ray) are manufacturing a crisis where one does not exist. However, we have to work where we can to EDUCATE people that this is the case. THAT is the big problem now. How do we EDUCATE the reporters, the people, etc. How do we get someone who will be considered an expert on this to listen? (Obviously the ETAC are not experts, or they would have figured it out, or at lest would have asked the right questions, like "How does this compare with private industy"?

Also, I noticed the TSPshareholders donation thingy has been reset? James, did you get enough money for the trip to lobby? Thanks.

I have enough money to make the trip- I'll be in DC the first week of March. Thanks to all who pitched in, I've got enough for the plane ticket and 2 nights in a DC hotel.
I HOPE to be able to meet with some ETAC members, although I have not yet been successful in scheduling any meetings- and the TSP office won't give me an appointment- they say I should "write a letter".

So I may end up doing a press conference on the steps of the TSP building office. I'll let you know how it turns out.

 

[brucemh]

Go get them James! I'm ready to support litigation. I'm ready to write my comment letter when they publish their Federal Registry notice. Thank you for all your work on this!

 

[airlift]

James,

I just finished sending you a contribution via credit card through the safe payment alternative offered in the TSPshareholder.org site. There is no way to deflect the responsibility on this issue. We have to fight the board, and we have to increase the chances for success. I believe that we have very strong arguments on our side. Let's take them to the heart of the powers that be! Good luck to all! And, Godspeed to you James!

At the moment, I think we continue to try and shed daylight on the fact that Greg Long ( or more directly, Tracey Ray) are manufacturing a crisis where one does not exist. However, we have to work where we can to EDUCATE people that this is the case. THAT is the big problem now. How do we EDUCATE the reporters, the people, etc. How do we get someone who will be considered an expert on this to listen? (Obviously the ETAC are not experts, or they would have figured it out, or at lest would have asked the right questions, like "How does this compare with private industy"?






I have enough money to make the trip- I'll be in DC the first week of March. Thanks to all who pitched in, I've got enough for the plane ticket and 2 nights in a DC hotel.
I HOPE to be able to meet with some ETAC members, although I have not yet been successful in scheduling any meetings- and the TSP office won't give me an appointment- they say I should "write a letter".

So I may end up doing a press conference on the steps of the TSP building office. I'll let you know how it turns out.

 

[alevin]

James, I've been out of touch the past week, just catching up.

I honor your efforts on this issue and understand the concern about them withholding/delaying crucial information that would help you carry the fight forward. The concern about lack of current data may (or may not) be resolvable before you go to DC, but just in case, are you familiar with the Freedom of Information Act? They cannot withhold publicly available information if you request it under FOIA. They have to send it-if they have it in hand. They don't have to compile and summarize figures for you specially, but if it's already been done, they have to provide it upon FOIA request as I understand it. My agency deals with FOIA requests all the time and I'm not the in-house expert, but I have had to round up existing information to respond to such requests. They have a very short period of time to respond to you under the law (don't recall if its 5 days or longer, it's been awhile since I got roped in on a response). don't know if it would make a difference but it might.

They held the meeting in January, but ...they were very light on hard data this time around.

They did NOT include the data on the number of interfund transfers in November (December's minutes cover November's trading activity). I suspect it was DOWN considerably- and that manifested itself in a negative trading error figure that was pretty substantial. However, I can't PROVE that the reduced trading volume led to the worse tracking errror, because they stopped posted the actual data on the volume of trades.

So in effect one of the best tools to hit them with- the actual data, has been hidden. I also suspect that when December's data comes out, it too will show higher tracking error costs due to reduced trading volume, but I predict that they won't publish the actual volume of trading in the next set of minutes either.

They met this past week, on the 19th, but only a trickle of information has flowed out since then. All the information is is that they are still on track to limit trades, perhaps in late March or sometime in April, and they say they will publish another federal register notice before they actually limit anything. Unfortunately. without more hard data, it will be hard to refute their statements with actual proof.

 

[James48843]

New "TSPSHAREHOLDER.ORG" Newsletter out today.

Here is the link:

http://tspshareholder.org/newsletters/Vol2_No4.html

Read it and digest-

It costs just $3.40 per YEAR for the unlimited interfund trasnfers to be done.

And the "portfolio turnover" is not out of line with other mutual funds- in fact TSP ranks below nearly all in costs, and even the most expensive fund to trade- the I fund, has costs lower than 90% of all funds in the market, while being in the 40th decile in the amount of trading going on. The I fund's reported "100% turnover" puts it in the middle of the pack, compared to other funds out there.

Read the whole story at the above link.

 

[James48843]

[FONT=Arial,Helvetica,sans-serif]
[FONT=Arial,Helvetica,sans-serif]THE STATS: [/FONT]
[FONT=Arial,Helvetica,sans-serif]TRADING COSTS - INTERFUND TRANSFERS- PER TSP SHAREHOLDER- [/FONT]
[FONT=Arial,Helvetica,sans-serif]HAVE NEVER BEEN LOWER. [/FONT]

[FONT=Arial,Helvetica,sans-serif]TRADING COSTS[/FONT]​

​

​

[FONT=Arial,Helvetica,sans-serif]Trading costs in the F, C, and S Funds were negative in November.​

[FONT=Arial,Helvetica,sans-serif]F Fund: [/FONT]
[FONT=Arial,Helvetica,sans-serif]Amount Traded in November: $401, 522, 125[/FONT]
[FONT=Arial,Helvetica,sans-serif]November Costs: -$32,997 [/FONT]
[FONT=Arial,Helvetica,sans-serif]Year to Date Costs: $1,050,599 [/FONT]
[FONT=Arial,Helvetica,sans-serif]YTD Basis Points: 1.3 [/FONT]

[FONT=Arial,Helvetica,sans-serif]C Fund: [/FONT]
[FONT=Arial,Helvetica,sans-serif]Amount Traded in November: $ 1, 018, 796, 985[/FONT]
[FONT=Arial,Helvetica,sans-serif]November Costs: -$278,186[/FONT]
[FONT=Arial,Helvetica,sans-serif]Year to Date Costs: $ 507,589[/FONT]
[FONT=Arial,Helvetica,sans-serif]YTD Basis Points: 0.5[/FONT]

[FONT=Arial,Helvetica,sans-serif]S Fund: [/FONT]
[FONT=Arial,Helvetica,sans-serif]Amount Traded in November: $1,892,757,769[/FONT]
[FONT=Arial,Helvetica,sans-serif]November Costs: - $ 150,698[/FONT]
[FONT=Arial,Helvetica,sans-serif]Year to Date Costs: - 4, 301, 097[/FONT]
[FONT=Arial,Helvetica,sans-serif]YTD Basis Points: - 3.3[/FONT]

[FONT=Arial,Helvetica,sans-serif]I Fund[/FONT]
[FONT=Arial,Helvetica,sans-serif]Amount traded in November: $1, 944, 309, 620 [/FONT]
[FONT=Arial,Helvetica,sans-serif]November Costs: $2, 196, 263[/FONT]
[FONT=Arial,Helvetica,sans-serif]Year to Date Costs: $15, 753, 468[/FONT]
[FONT=Arial,Helvetica,sans-serif]YTD Basis Points: 6.2[/FONT]


[FONT=Arial,Helvetica,sans-serif]Note: The I fund costs are higher due to setting the price prior to market execution. The 2006 comparable I Fund YTD basis points were 10.2 basis points. The higher volume of trading in the I Fund in 2007, combined with Barclays swtich to using ETFs rather than stock shares were both directly responsible for the lower Basis Point costs associated with the 2007 figures. [/FONT]


[FONT=Arial,Helvetica,sans-serif]Number of TSP Share Holders in December 2006: 3,680,000[/FONT]

[FONT=Arial,Helvetica,sans-serif]Number of TSP Share Holders in December 2007: 3, 825,000[/FONT]

[FONT=Arial,Helvetica,sans-serif]TOTAL TRADING COSTS FOR 2006 (through November) [/FONT]
[FONT=Arial,Helvetica,sans-serif]$12,963,106, or $3.52 per person. [/FONT]

[FONT=Arial,Helvetica,sans-serif]TOTAL TRADING COSTS FOR 2007 (Through November): [/FONT]
[FONT=Arial,Helvetica,sans-serif]$13,010,559, or $ 3.40 cents per person. [/FONT]

[FONT=Arial,Helvetica,sans-serif]

[/FONT]​

IN 2007, IT COSTS JUST $3.40 CENTS PER TSP SHARE HOLDER TO ALLOW UNLIMITED INTERFUND TRANSFERS FOR THE ENTIRE YEAR.[/FONT][/FONT]

 

[poolman]

Very, Very, Good!

This is a very impressive letter. I would Gladly pay more than this to have unlimited IFT'S.

I wonder if they read this ?

Changes get made without any input from Federal Employees.

It would seem that there could be more action taken but people are Blind and uneducated to what they want to do.

 

[Weather_n_Leather]

James,

Thank you for doing all of the math and showing that unlimited Interfund Transfers cost little for the average TSP member. The only question I would have to ask is how would that number change if every member truly made "unlimited" transfers.

I would think that most people do not make very many Interfund Transfers. I only made around 12 Interfund Transfers last year and around 3 so far this year.

I am sure it would increase. But I would have no idea how to guess how much.

:suspicious:

 

[RAE]

Go get them James! I'm ready to support litigation. I'm ready to write my comment letter when they publish their Federal Registry notice. Thank you for all your work on this!

Yes, THANK YOU James. And folks, Bruce mentions the one big thing that we ALL need to watch for, and take action on, when it comes out - the Federal Register Notice that FRTIB will publish very soon now, announcing their proposal to limit IFT's to three per month, and opening a comment period. Remember, the last Fed. Register notice that came out (late December) only covered sending the letters to the 3,000 "frequent traders". This next Fed. Register Notice is the big one, that we all need to respond to, IN FORCE. James has provided us with a ton of good data to use in our responses. And this time, they will have to publish a response to our comments, so let's force them to try to refute our data, in print. They are trying to address a "problem" that is not a problem at all, and we need to tell them to back off and let us manage our accounts as we see fit. This is FAR from over, folks, but we really do need to stick together and fight this, and the next month or so is going to be very critical, I think.

 

[nnuut]

New "TSPSHAREHOLDER.ORG" Newsletter out today.

Here is the link:

http://tspshareholder.org/newsletters/Vol2_No4.html

Read it and digest-

It costs just $3.40 per YEAR for the unlimited interfund trasnfers to be done.

And the "portfolio turnover" is not out of line with other mutual funds- in fact TSP ranks below nearly all in costs, and even the most expensive fund to trade- the I fund, has costs lower than 90% of all funds in the market, while being in the 40th decile in the amount of trading going on. The I fund's reported "100% turnover" puts it in the middle of the pack, compared to other funds out there.

Read the whole story at the above link.

Newsletter is a knockout James. I see that BULLDOG still has a good hold on TSP's ear!!View attachment 3428

 

[James48843]

Glad you like it.

Do me a favor though- please - EVERYBODY-

Go to this link:
http://tspshareholder.org/newsletters/Vol2_No4.html

Print out that newsletter tomorrow at work, and leave it laying around the lunch room or water cooler.

We need to get the word out. We need MORE people involved. There are 3.8 MILLION federal employees out there. And all of them will be affected if this limit goes through. And 3.79 milion of them don't have any idea why, they simply will be taking the word of the Thrfit Board as their rights are stripped away.

We have only about 1,000 people on the e-mail list.

And only 3,475 have signed the petition.

We need to double the petition signatures, and triple the number of people signed up to receive newsletters fast.

Thrift Board will argue that the only ones who are opposed are the 3,000 who are getting letters for being frequent traders. And they will point to our petition's measely 3,475 signatures as proof. They will say that the 3,475 petition signeres are the same people as the ones who trade. WE know they are not the same people, but there is no way to prove that to the media. We need to double the number of signatures. And that starts with YOU.

We need to mobilize a LOT MORE people into this thing- including getting a lot more people signed up to receive free newsletters, and a lot more people signing the petition.

And that starts with YOU.

Each and every one of YOU.

Tomorow, at work, print out the newsletter.

Talk about it over lunch to two or three people.

And ask them to sign the petition to defend their right to control their own money.

And then do it again the next day, and the next day.


If we can get each person to get two others to sign in the next few days, we'll make a real dent in the number of signatures.

Tomorrow I am going to D.C.- in an attempt to talk to some ETAC members.

I'm traveling on my own Annual Leave, and the donations YOU have given to help support this fight. I can to a little- but YOU need to do your part too- to help publicise this attack on YOUR RIGHTS as federal employees, and stop this by getting MORE Federal employees involved in the fight.

I need YOUR help.

Thanks.

 

[qibovin]

how would that number change if every member truly made "unlimited" transfers.:suspicious:

Even if it went up significantly, it would be less of an issue if everyone were doing it. The FRTIB's (only) argument is that it is "unfair" because the costs (however miniscule) are being distributed to those who are less active in rebalancing their accounts.

 

[FUTURESTRADER]

Even if it went up significantly, it would be less of an issue if everyone were doing it. The FRTIB's (only) argument is that it is "unfair" because the costs (however miniscule) are being distributed to those who are less active in rebalancing their accounts.

And the amount of resources they're expending to justify their position could /should /might
come in to question by an IG or other performance board.

 

[qibovin]

And the amount of resources they're expending to justify their position could /should /might
come in to question by an IG or other performance board.

Is there an IG equivalent of some sort? Several people have talked about the need for an investigation. Well, how do we go about getting one started? Who do you call? Ghostbusters?:cheesy:

 

[tsptalk]

Nice job James! You're keeping hope alive.

 

[poolman]

Hey James,

I'm thinking about you. The Wife is up their in D.C. somewhere. Hey at least you have the weather going for you 70 degrees two day's in a row.

 

[airlift]

James,

You are a dedicated and decent person. Delicate mission. You are carrying the load of a Giant on your shoulders. Thank you. Best wishes to you!

 

[nnuut]

YAHOOO!!!!! Hope Sauber will see you, if he does how can he ignore the facts? YOU ARE THE MAN!!
Norman
View attachment 3437