Tuesday, September 7, 2010

General TSP Discussion.

Moderator: Aitrus

Post Reply
SgtWs

Tuesday, September 7, 2010

Post by SgtWs »

Up until Tuesday last week the markets had a strong sense of doom and gloom to them and there was a lot if belief among many (me included) that we might be going even lower. Then out of nowhere the markets staged a very impress rally that, according to the media was a reaction to economic data that was bad, but was not worse than expected. This is mind boggling to me and makes me question if it was really based on the date, or we just bouncing up and down in our well defined trading range?

I believe it was Mark Twain that once said
If you don't read the newspaper, you're uninformed, but if you do read the newspapers your misinformed


C Fund

Image

C Fund - the S&P 500 held at the 1040 level, making this the critical line in the sand that cannot be breached if the trend turns down again. If the 1040 level is breached, watch out below. As for me, I am going to be patient to wait for the C Fund to rise above its 50 and 200 day moving averages, and then garner enough strength for a break out above the 1130 level on the S&P before going back in. But with the markets already looking extended, I would be surprised to see a true and sustainable breakout occur. I just don't see the catalyst for it - yet.

F Fund

Image

F Fund – the F Fund is showing some serious weakness. I’m running a 9 day moving average over a 20 day, utilizing a crossover as a confirmation of a change in trend to sell. It is getting very close.

So did we bounce off the bottom, or are we just merely continuing to trade in a range?

Personally I feel the markets have quickly gotten ahead of themselves, and while we may ride the current momentum a little higher, the more likely scenario is a retracement of at least a portion of last week's rally. The markets are still within a much broader trading range, and it is still too early to know if this is a larger topping process or if a new base is being formed. The levels to watch are pretty clear with last week’s bounce clearly showing where support is, and the July highs marking resistance. With summer practically over, the next few weeks should usher in an increase in volume and provide more clues as to the next move in the markets. Either way, it is sure to be interesting.

Stuff I found interesting……….

Summary for Week ending Sept 4th

by CalculatedRisk on 9/05/2010 11:45:00 AM

It was a busy week ...

August Employment Report: 60K Jobs ex-Census, 9.6% Unemployment Rate

The BLS reported:
1) Nonfarm payroll employment declined 54,000 in August.
2) however Decennial census employment declined 114,000.
3) so ex-Census, payrolls increased 60,000.
4) Private payrolls increased 67,000.
5) The unemployment rate increased to 9.6% from 9.5% in July.
6) Payrolls for June and July were revised up by 46,000 and 77,000 respectively.

A few graphs ...

Image

This graph shows the job losses from the start of the employment recession, in percentage terms aligned at the bottom of the recession (Both the 1991 and 2001 recessions were flat at the bottom, so the choice was a little arbitrary).

The dotted line shows the impact of Census hiring. In August, there were only 82,000 temporary 2010 Census workers still on the payroll. The number of Census workers will continue to decline - and the remaining gap between the solid and dashed red lines will be gone soon.

Employment-Population Ratio

The Employment-Population ratio increased to 58.5% in August from 58.4% in July.

Image

This graph shows the employment-population ratio; this is the ratio of employed Americans to the adult population.

Note: the graph doesn't start at zero to better show the change.

The Labor Force Participation Rate increased to 64.7% from 64.6% in July. This is the percentage of the working age population in the labor force. The Participation Rate is very low, and as the employment picture improves, people will return to the labor force, and that will put upward pressure on the unemployment rate.

Part Time for Economic Reasons

Image

The BLS reported that "The number of persons employed part time for economic reasons ... increased by 331,000 over the month to 8.9 million."

These workers are included in the alternate measure of labor underutilization (U-6) that increased to 16.7% in August from 16.5% in July.

Duration of Unemployment

Image

This graph shows the duration of unemployment as a percent of the civilian labor force. The graph shows the number of unemployed in four categories: less than 5 week, 6 to 14 weeks, 15 to 26 weeks, and 27 weeks or more.

In August 2010, the number of unemployed for 27 weeks or more declined significantly to 6.249 million (seasonally adjusted) from 6.752 million in July. It appears the number of long term unemployed has peaked, but it is still very difficult for these people to find a job - and this is a very serious employment issue.

The 5 to 14 week category increased sharply in August and is now at the highest level since October 2009.

Summary

The underlying details of the employment report were mixed. The positives: the upward revisions to the June and July reports, a slight increase in hours worked for manufacturing employees (flat for all employees), an increase in hourly wages, and the decrease in the long term unemployed. Other positives include the slight increase in the employment-population ratio and the participation rate.

The negatives include the hiring of only 60,000 ex-Census, the increase in the unemployment rate (including U-6), and the increase in part time workers for economic reasons.

Overall this was a weak report and is consistent with a sluggish recovery.


I thought this was an interesting presentation from D-Short……..

The "Real" Mega-Bears

September 4, 2010 weekend update

It's time again for the weekend update of our "Real" Mega-Bears, an inflation-adjusted overlay of three secular bear markets. It aligns the current S&P 500 from the top of the Tech Bubble in March 2000, the Dow in of 1929, and the Nikkei 225 from its 1989 bubble high.

Image

This chart is consistent with my preference for real (inflation-adjusted) analysis of long-term market behavior. The nominal all-time high in the index occurred in October 2007, but when we adjust for inflation, the "real" all-time high for the S&P 500 occurred in March 2000.

Here is a nominal version to help clarify the impact of inflation and deflation, which varied significantly across these three markets.

Note: These charts are not intended as a forecast but rather as a way to study the today's market in relation to historic market cycles.


I was cruising through Gallup.com and found these interesting polls……….

U.S. Consumers Pulling Back on Spending in August

Consumer spending of $61 per day is down from the prior week's average of $66
by Dennis Jacobe, Chief Economist, August 31, 2010

PRINCETON, NJ -- Americans' self-reported spending in stores, restaurants, gas stations, and online averaged $61 per day during the week ending Aug. 29. So far, August and back-to-school 2010 spending trends appear no better than those of August 2009.


Image

Self-Reported Spending Suggests "New Normal" Continues

Gallup's consumer spending measure averaged $68 per day in July and $67 in June -- up $6 on average from prior-year comparables, and at the upper end of the 2009 "new normal" monthly spending range of $59 to $67. The July results seem consistent with Monday's report of a 0.4% increase in personal spending in July 2010.

Image

At this point, consumer spending in August is running below that of June and July, falling back to roughly the $65-per-day average of August 2009. This is consistent with perceptions of a continued weakening of the U.S. economy and tepid back-to-school sales.

It is also consistent with recent downward trend in consumer confidence as reflected by Gallup's Economic Confidence Index. Gallup's index predicted the slight uptick in last week's Reuters/University of Michigan consumer sentiment index, and suggests a similar upward nudge in Tuesday's consumer confidence index report from the Conference Board. However, Gallup's index already shows confidence continuing to decline late in August -- falling below its average July levels.

A disappointing back-to-school sales season, declining consumer confidence, and a weak job market suggest that
the perceived weakening of the U.S. economy is the reality on Main Street. Federal Reserve Chairman Ben Bernanke's "I've got your back" speech on Friday may have made Wall Street feel better for a day or so. However, it will likely take concrete, measurable action -- not just the Fed's announcement of its good intentions to help if necessary -- to build Americans' consumer confidence, stimulate consumer spending, and help small businesses increase their revenues and cash flow.

User avatar
TSPking
Site Admin
Posts: 1066
Joined: Thu Nov 15, 2007 7:02 am

Post by TSPking »

Rodney. What do you think the market reaction will be (if any) to news about Obama's economic stimulus strategies (business tax cuts and infrastructure improvement)?
TSPking

It's a gift...and a curse ~ Adrian Monk

SgtWs

Depends......

Post by SgtWs »

Oh man, I'm gonna get thrown under the bus for this one, but here it goes...... :(

For me, I am still undecided. I think it depends:

1) Will it be perceived as a political ploy? I have already heard many arguing that they are just throwing more money as some of the same programs that are not working......The GOP won't support anything this close to an election.........

2) Will it be perceived as truly helpful? I do like the infrastructure funding, but I think we should have focused more on this the first time. I'm not really sold on the high speed rail yet. I was hoping to see more funding towards our power grids and upgrading our systems. I believe innovations in energy will be the next big driver, especially in things like natural gas, but we are not really embracing it. Soon we will be exporting our natural gas and not using it.

3) If it is seen as making our deficits even worse, it could back fire and cause more people to lose faith in our ability to repay our debt.

User avatar
Sunna
Posts: 11
Joined: Thu Sep 02, 2010 6:53 am

Depends......

Post by Sunna »

"I do like the infrastructure funding, but I think we should have focused more on this the first time."

Agree with you... however, not sure what the overall fallout would have been if we let "banks too big to fail" fall on their @$$es.

"I'm not really sold on the high speed rail yet."

Also agree with you on this point. "Build it, and, they will come" is not necessairly a true statement. In addition to the cost to build and maintain, there has to be an overall culture change on the part of American people to want to use it rather than drive their cars. Consequently for the investment to have a maximum ROI, there has to be an incentive / benefit to the user. Does it save them time, is it convenient, is it cheaper than driving, is it safer?

"I was hoping to see more funding towards our power grids and upgrading our systems."

Absolutely agree with you here too. Easy to say, hard to do. Power companies have been privitized, and, their first concern is to their stakeholder / profits. Very little money has been invested in scheduled maintenance, systems upgrades, or creating node redundancies. Additionally, if one of the major transformers goes down for any reason, we are SCREWED. There is no backup, the mean logistics delay time for replacement is > 12 months. Furthermore, the states are not on the same page as to how to approach electrical grid security. Electrical power reliability should be everyone's concern. It's a lot like air... it's taken for granted until you don't have any. Certain industries/institutions/organizations have invested in "islanding" -- but, back-up power only lasts as long as the fuel available to power it. Not everyone has the resources to build / maintain a fuel silo next to their generator.

"I believe innovations in energy will be the next big driver, especially in things like natural gas, but we are not really embracing it. Soon we will be exporting our natural gas and not using it.

You are spot on here too. Lots going on in both Science and Technology / Research and Development. But most of the "game changers" are still at least 15 to 20 years out (at the earliest). Again, while many natural gas resources (like oil) are "owned" by the American people (since much of it is on national land), it is the extracting companies who decide where it is sold, again, they look where they can make the most profit.

sunna :arrow: :mrgreen:
“I advise you to go on living solely to enrage those who are paying your annuities. It is the only pleasure I have left.” Voltaire

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

Re: Depends

Post by UwshUwerME »

I like the high speed rail idea; I'm sure I won't like the price. I can't even afford low speed rail.

I wouldn't call the proposals stimulus. I haven’t heard one economist say “We can’t get out of this recession because our infrastructure is bad.” I guess what most upsets me as a federal worker is the fiscal pressure these types of programs put on my agency. We’ve already seen the President ask for agency budget cuts in the name of “stimulus”. And in my opinion, the redirected funds (or deficit funds) are not stimulating business activity and job growth.

Post Reply

Fund Prices2024-03-27

FundPriceDayYTD
G $18.14 0.01% 1.00%
F $19.09 0.26% -0.68%
C $82.11 0.87% 10.42%
S $82.19 1.48% 6.61%
I $42.68 0.56% 6.21%
L2065 $16.38 0.84% 8.36%
L2060 $16.38 0.84% 8.36%
L2055 $16.39 0.84% 8.36%
L2050 $32.73 0.71% 6.94%
L2045 $14.91 0.67% 6.56%
L2040 $54.37 0.63% 6.20%
L2035 $14.34 0.58% 5.77%
L2030 $47.66 0.53% 5.35%
L2025 $13.14 0.31% 3.40%
Linc $25.60 0.24% 2.79%

Live Charts

Pending Allocations

Under development. For now, you may view Pending Allocations by going to "fantasy TSP" and selecting "Leaderboard sort" of "Pending Allocations".