Friday, August 27, 2010

General TSP Discussion.

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SgtWs

Friday, August 27, 2010

Post by SgtWs »

The Fed spoke this morning.........from a Washington Post e-alert......
Federal Reserve Chairman Ben Bernanke acknowledges that the pace of the country's economic growth "recently appears somewhat less vigorous" than expected, but that it is on track to continue growing.

He said the central bank would only take new action if conditions worsen further.


I wonder how he defines worse?.................

Interesting commentary by Moody's Zandi on the economy..........

Moody’s Zandi Discusses U.S. Double-Dip Recession RiskPosted: 26 Aug 2010 02:10 PM PDT

Aug. 26 (Bloomberg) — Mark Zandi , chief economist at Moody’s Analytics Inc., talks with Bloomberg’s Margaret Brennan about the outlook for the U.S. economy and possibility for another recession. (Source: Bloomberg)

Zandi on his predictions re: double-dip recession:

“I put it that 1 in 3 right now. If you’d ask me 4-8 weeks ago, I would have said 1 in 4, 12 weeks ago, 1 and 5. So it is rising uncomfortably high. I am assuming that tax rates on upper income households will in fact occur on January 1st. If that doesn’t happen, it could reduce the odds back closer to 1 in 4. But 1 in 3, that is uncomfortably high. Particularly we’re at a 9.5% unemployment rate. If we go back into recession, it’s going to be very difficult to get out of it in any king graceful way.”

On whether the economy will backtrack into a recession:

“I do think that the Federal Reserve will restart quantitative easing over the next few months. I think the economy is going to be, at best, very weak, so weak that unemployment will begin to rise again and I think that will be a signal for the fed to resume quantitative easing.”

On whether he expects job growth in the current market:

“I do expect some job growth, yes, but not enough to forestall further increase in unemployment. Just to give you a number, we need approximately 150,000 jobs per month just for a stable rate of unemployment. Since the beginning of the year, we’ve been getting closer to 100K, subtracting the ups and downs of census hiring. Over the next few months, I would expect no more than 50K given the recent weakening in economic growth. And so that’s not enough to forestall further increases in unemployment.”

Zandi on expectations for Bernanke’s speech tomorrow at the Kansas City Fed:

“The first thing he needs to do is put the string of economic data we’ve been getting into some context. How weak does he think the recovery really is? Then I think he needs to explain more clearly the FOMC’s actions a few weeks ago. Why hold the balance sheet constant? What was the logic behind that? It would be helpful if he could then give as benchmarks for understanding when they possibly could resume quantitative easing, start buying more treasuries, securities and growing the balance sheet.”

On news today that U.S. mortgages with overdue payments have risen in Q2:

“That is a bit disconcerting. It is clear the foreclosure crisis continues on, by my data, we have 4.3 million first mortgage loans are in default or 90 days delinquent and thus headed to default. That is a lot of loans to work through and many will go into foreclosure sale. One more reason to believe that house prices will decline. One encouraging thing was the decline in early stage delinquency. The recent bump up is a bit disconcerting. I do not think it is the beginning of a trend. I am hopeful, that in the next few quarters, we’ll see that come back down again given the tightening in the underwriting and the view that we’ll get some job growth.”

On whether Congress should raise the tax rate for the top 2% in 2011:

“I think if we raise those tax rates, in all likelihood the recovery will still remain intact but I think that is a gamble that would be unnecessary. I do think it would prudent given how fragile the recovery is not to raise any more taxes in 2011. Now in 2012, 13, 14 when the economy is up and running, raising those tax rates in upper income households, I don’t think we’ll have any meaningful impact on their spending and saving on the broader economy and would help with respect to fiscal problems. But I just wouldn’t do it at 2011. It is one more thing for the economy to overcome when the economy has a lot to overcome.”

On what he thinks will tip us towards a second recession:

“It could be, for example, if angst about the European debt situation were to flare up again and we’d see the equity market, stock prices fall another 5% or 10%. I think that would certainly qualify and that could push us back into recession.”

On the European debt situation:

“We’re watching very carefully. The coast isn’t clear. The European economy is holding up better than I would have thought to this point. But it has a lot of headwinds, the fiscal austerity, the financial constraints given the problems in their own banking system, so there is a lot more work to be done. I don’t think they will work to the problem quite yet.”

On tomorrow’s GDP figure and whether he agrees with the consensus is 1.4%:

“I think that is about right. That would be reduction of about a percentage point in estimated growth. Most of that because of a wider trade deficit, some of it related to less inventory. But it clearly highlights the economy lost momentum in the Q2.



America’s Debt: The BIG Wave Infographic

This morning credit rating agency Standard & Poor’s (MHP) said in order for the US to keep its AAA-rating, it is “very important” for Congress to deal with the cascading US Debt. China’s largest credit rating agency Dagong Global Credit Rating Co. was less diplomatic: they simply downgraded the US credit rating to AA.

This, my friends, is only the tip of the iceberg of what will unfold should we choose to kick the proverbial can farther down the road. As you can see in the infographic below, according to the US Treasury we are watching a debt Tsunami come ashore. If we have any pride or patriotism, we’ve got to start dealing with the crisis now before it wipes out generations of wealth.


Image
Last edited by SgtWs on Fri Aug 27, 2010 11:20 am, edited 4 times in total.

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olijoel
Posts: 110
Joined: Fri Feb 19, 2010 3:26 pm

Good Morning SgtWs

Post by olijoel »

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Hope you like it…
http://www.CrownMoneyMap.org

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flight23
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Joined: Mon Jul 26, 2010 10:47 am

Post by flight23 »

Man the more stuff like this I see the more I think we are completely screwed. I would dive completely in to China and India but unfortunately if the US economy collapses it still means the world economy collapses.

Time to buy some more gold...

Anyhow, prediction for the day is Dow will end negative after it appears we have a +50 open.
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SgtWs

I see that some.......

Post by SgtWs »

I see some are seeing the high levels of negative of investor sentiment as a possible signal to buy. What do you guys think?

blakeh02
Posts: 82
Joined: Wed May 13, 2009 3:25 pm

Arrest Ben Bernanke would be a start

Post by blakeh02 »

:x

It never ceases to amaze me how one man commenting on the market controls people.

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UwshUwerME
Posts: 85
Joined: Fri Jul 09, 2010 2:55 pm

Post by UwshUwerME »

I'm amazed as well. If he breaks his leg, does the market go down?

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peteruso
Posts: 113
Joined: Thu Jul 29, 2010 11:29 pm

Re: I see that some.......

Post by peteruso »

SgtWs wrote:I see some are seeing the high levels of negative of investor sentiment as a possible signal to buy. What do you guys think?


"Be fearful when others are greedy and greedy when others are fearful" :wink:

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flight23
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Post by flight23 »

Dangit, looks like I should have held one more day. Argh.
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jeffvan1
Posts: 491
Joined: Tue Feb 12, 2008 5:04 pm

Post by jeffvan1 »

I'm glad the month is over (almost). It's my worst performance since I joined in 08 and any July gains I had are a complete wash. I'm right back to where I was on June 30, 2010. My second worst performance month was August 08. Maybe August just isn't a good month for me.

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UwshUwerME
Posts: 85
Joined: Fri Jul 09, 2010 2:55 pm

Post by UwshUwerME »

Question - If we put a transfer request in Tuesday (August 31st) before 9am, does that still count toward August? Or will it be the first trade for September?

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flight23
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Post by flight23 »

The trade will be executed in the evening on Aug 31 so my bet is it counts towards August.
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crondanet5
Posts: 4330
Joined: Tue Aug 19, 2008 8:51 pm

Jeffvan1, the interesting question is

Post by crondanet5 »

will you be on top of the Leader's Board by Balance after September/October if the markets tank while you are in the G Fund? If yes, you made the right choice. But if the markets don't tank you can change your mind and reallocate to move ahead. I have the greatest confidence in you staying on top.

EFT
Posts: 53
Joined: Tue Oct 28, 2008 8:58 am

Be the Contrarian

Post by EFT »

Be the Contrarian
Historical data on the entire investment scene is out the window. Nothing out in money making land is the same as it was 1,5,10,20....take your pick, years ago. Has anyone seen any month this year living up to its "Historical" reputation? The risk has been taken out of the equation through regulations, Govt buy-outs, Helicopter Ben printing and spreading the dough (to everyone but consumers), so, and I hate to say it because it may alter the way members move their acct if the percentage of contrarians is high enough, which in turn may make that indicator here not as useful, but I definitely will go against the herd when it is a stampede. Wow. Too much analyzing going on here. The main reason I stayed in most of the month is I could tell that I needed to be in at the end of the month and into the next month because the way the lousy transfers work where if you are out of transfers at the end the earliest you can be actually in is the second of the next month. Lots of earnings missed by not being there on the 1st day of the month. So just trying something new. Good luck.('Razz')

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Fund Prices2024-03-28

FundPriceDayYTD
G $18.15 0.05% 1.05%
F $19.08 -0.06% -0.74%
C $82.21 0.11% 10.55%
S $82.43 0.30% 6.92%
I $42.57 -0.24% 5.95%
L2065 $16.38 0.02% 8.37%
L2060 $16.39 0.02% 8.38%
L2055 $16.39 0.02% 8.38%
L2050 $32.73 0.01% 6.95%
L2045 $14.91 0.02% 6.58%
L2040 $54.38 0.02% 6.22%
L2035 $14.34 0.02% 5.79%
L2030 $47.67 0.02% 5.38%
L2025 $13.15 0.03% 3.43%
Linc $25.61 0.03% 2.82%

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