I just took a look at the TSP fund rates for tonight, and the F Fund continues to roar!! That makes a lot of sense with the current interest rate environment, and the continued talk of a deflationary spiral. If you're optimistic that the Fed's actions will prevent that, then it might be a good idea to get out of the F at some point.

M$M,
  I recall a 12 per cent cd back in the 70's I believe.It has been so long ago I really can't remember the year.I believe there is a lot of money on the sidelines.If the dow were to start moving up a lot of money could propel the dow up quickly.But I believe this is still an up and down market for a while.

Today's decline was attributed by a possible ratings downgrade on GE.
Additionally, our do-nothing president came out and said he wasn't sure WHAT he was going to do about the auto bailout - sorry, but the man needs to GO!

The price of oil took a real beating, while the US dollar bounced back a bit (still WAY down in the last few weeks), and yields on US treasuries continued to drop (good for the F fund).

Here's the US Dollar chart:

http://stockcharts.com/h-sc/ui?s=%5Eusd

The chart for crude (Oil futures dropped to the mid-$30's today):

http://stockcharts.com/h-sc/ui?s=$WTIC&p=D&b=5&g=0&id=0

Chart on the yield for 30-year treasuries:

http://stockcharts.com/h-sc/ui?s=$TYX

The TED spread:

http://www.bloomberg.com/apps/cbuilder?ticker1=.TEDSP%3AIND

So, it looks as if credit MAY be loosening up a bit, while there are still indications of deflation, and a flight to quality.

A lot of the financial stories I've been hearing now contain words to the effect that this is the first time in xxx years that this or that has happened, and even this has never happened before. Bottom line, we're sort of in uncharted territory - no one's really sure what's going to happen or when.

If you are buying into the C-Fund; you are partially investing in Citigroup, Bank of America, JP Morgan, American Express, and General Motors.

Stock Picks for the '3,000 Points' Rally
Posted By: Andrew Fisher
Topics:Nasdaq | NYSE | Stock Market | Stock Options | Stock Picks
Companies:Nucor Corp | Peabody Energy Corp | Genzyme Corp | Google Inc

Gerald Jordan of the Jordan Opportunity Fund sees a big rally coming, probably in the second quarter, and he believes investors should get back into stocks to get ready for it.

"I think the next two to three thousand points in the Dow are going to be higher, not lower, and that's what we're invested for," he told CNBC.

He agreed with the current move in bonds from Treasurys to corporates, but he said stocks are even more promising than corporate bonds.

"I believe stocks will outperform corporates, certainly on the big rally that I expect in the second and third quarters," he said.
---------------
I guess the big question is: Will any of us have anything left in our TSP's to invest in the "big rally"???

Edited by author 01-26-2009 11:08 PM
I have to agree that we'll see a big rally in stocks - I'm just not sure of the timing. The bad news has been coming in waves - more like tsunamis, but so far it hasn't managed to take the market down lower than the lows we saw around Nov. 20. The C fund sank to $8.66 that day, and it's presently at $9.67. The leading economic indicators came out positive today. Another positive reading next month COULD signal a turnaround coming - the LEI usually signals a turn 6-9 months down the line (except when it doesn't).

The TED spread has dropped back down to 1, after a stratospheric reading of nearly 5:

http://www.bloomberg.com/apps/cbuilder?ticker1=.TEDSP%3AIND

This confirms that the tightness in the banking sector has eased. Right now we're in the midst of earnings season - reports for the last quarter of 2008 are coming out, and a lot of them are dismal, so there are plenty of crosscurrents to sort through if you want to try to find a pattern. I've been looking to re-enter the market in hopes of catching a big rally. A large gain in my TSP account would help speed my retirement from the USPS. Conversely, if I lose money trying to catch a rally, it might extend my stay. It's what my old psych prof used to call an approach/avoidance conflict. I'm definitely conflicted! Right now the trading on the Nikkei seems to indicate tomorrow will be an up day, as do the US futures.

Tomorrow I'll try to do a post on a fairly conservative TSP investment idea I've been noodling around.

ps - nice to see you, pabak

pps - last week Downs' site commented there MAY be a 2,000-point move coming, so pabak's article is interesting. Hopefully, here's a link to the Downs' commentary:

http://www.signalwatch.com/markets/markets-dow.asp?Date=01/19/09

I'm figuring $8.63 for the C fund after today's bloodbath, which would be lower than what we saw in mid-Nov. I've been kind of bogged down in count, and haven't posted here much. We need to look at possible entry points or discuss strategies. Right now the best strategy has been to duck & cover in the G fund.

I had wanted to do a post a while back about a possible strategy I came up with that is akin to "dollar cost averaging". Trouble is, I just wasn't sure we had seen a bottom in the market back then.

Now we're seeing market levels that MAY indicate we'll see a bottom at some point in the future (again, no one knows WHEN that will be.)

Many studies have shown the power of dollar cost averaging into stocks over a period of time. Putting a fixed amount of money into stocks every week or month over a long period pretty much assures a nice gain.

Since we can't know where the bottom will be, I'm thinking that a very conservative "dollar-cost" strategy might be to put your NEW money (or a percentage of it) into the TSP stock funds every payday. Say you've got $50,000 in your TSP account & it's all in the safe (G) fund. You WILL NOT LOSE any $$ in that fund (but you won't get a good return if & when the market eventually turns around). SO, if you put all or a portion of your NEW TSP funds into the stock funds every payday, you'll be buying the C S or I (or the L funds) at these low, low prices - on sale. If the market continues to go down, the money in your G fund is safe, but you can buy MORE C S or I shares (at the cheaper prices). Over time, you will have averaged down your stock fund buys, and at some point, you will be buying AT or NEAR the bottom - again, we don't know where that is, but this method would assure that you accumulate shares over time that will EVENTUALLY be worth a lot more $$ (I guess it's possible the market will NEVER go back up, but then it will hardly matter since the country would be in the crapper).

To use this method, you would have to go into your account, and change the "Contribution Allocations" so that some percent or all of your NEW funds are going into one or more of the stock funds.

For the much more gambling-oriented out there, you can try to "time" the market bottom (studies say it's impossible), and put some or all (NO) of your account into the stock funds through the "Interfund Transfers" function. This is a VERY hard thing to do, as we humans have a tendency to sell when the market is down & buy when the market is up when we should be doing the exact opposite.

Right now, I have 15% of ALL my TSP account in the stock funds, and I have 50% of my NEW contributions going into them. I'm looking at going up a bit if the market continues to tank, but from past experience, I know that I usually "get in" too soon, so I'm trying to hold off.

Today's TSP figures are out, and as I figured, the C fund is at $8.6326, while the S fund is $10.0317, and the I fund is at $11.2720.

Another factor to try and figure in the TSP equation is the AMOUNT of your contribution. I have been putting aside 10%, but after the new count figures become effective, I may have to cut that amount to partially compensate for the big bux I'll no doubt lose in the count.

Hope to hear from other posters - if not, I probably won't post here again.

Final thought - I heard a story on the news today that a group of economists THOUGHT we MIGHT be coming out of this CLUSTERF### sometime near the end of this year. IF that's true, the market probably won't turn until at least June, but then again, since when has a group of economists ever been right??

Good luck all.

manO

manOman... never thought I'd see the market sink to where it stands today. Just kept on waiting for the guys on the white horses to ride in snap up more bargains that a "New York Carpet World" sale! It just isn't happening, at least yet.
On top of that we have Presidents and lawmakers tossing $750 billion here and $750-billion there and printing money that has nothing standing behind it. How far will we sink before you start spending $10 for candy bars and $100 for 12-packs of Pepsi because the dollar just isn't worth anything?
I entered this mail count banking on my click n shippers (businesses) to bail me out... or at least neutralize the built in "losses," but the USPS keeps jacking up rates, neutralizing the "savings" between us and our competitors, while cheapening customer service in the process.
It's a hard sell to get them aboard when you have to utter... "oh by the way, did I forget to mention that our prices will be going up as soon as your give your shipping business to us?"
EVERYTHING is in the crapper, including my "retirement account." It's almost getting to the point where it would be cheaper to withdraw the money, pay the penalties and taxes and still come out further ahead then watching it swirl down the drain.
I keep thinking the housing market would show some signs of rebound as well, but it's just the opposite. The value of my 5-year old home plummets, while the property taxes on it continue going in the opposite direction.
Frankly I'm "at a loss" in more ways than one.

The Conference Board's survey of consumer confidence came out today, and it was lower than the amount of DPS I got today! The reading was 25 (100 is considered good, so this number - the lowest EVER - isn't so great).

Here's a story:

http://www.marketwatch.com/news/story/stor...50C40%7D&siteid=rss

Meanwhile, Fed chairman Bernanke was on Capitol Hill telling Congress that the U.S. economy isn't doing so well (LOL). He DID say that given a "goldilocks" scenario, it's POSSIBLE that things might BEGIN to get better in the second half of this year. Most analysts attributed today's rally to Bernanke's comments.

The consumer confidence survey MIGHT be signaling a turning point in that it's hard to see confidence dropping much further. Right now, psychology is a fairly important component of the current downturn. Because everyone is so pessimistic (rightly so), they are cutting back on buying, which in turn causes economic activity to drop even more - it's a negative feedback loop. IF actions by the government are able to restore some semblance of stability & confidence in the system, we might see a turnaround. I question whether ANYONE will soon forget the pain & misery caused by the Wall Street crooks & thieves, which might keep people from "investing" in stock as they have previously.

I did a transfer and caught today's move, but only went from 5-5-5 in the C S & I up to 6-6-6. I was looking to move up gradually, but at least I'll have a bit larger gain tonight.

I got my TSP statement for 2008 in the mail yesterday, and I can imagine what some holders will be looking at. My account was up a couple of hundred bucks over the entire year - that's WITH contributions of something like $9 grand from me & the USPS. SHEESH! I wasn't doing too badly for the first half of the year, but the second half did me in.

pabak, your message reminded me of Senator Everett Dirksen, who was once quoted as saying "A billion here and a billion there, and pretty soon you're talking real money." That was a long time ago (I'm old enough to remember), and now I guess we should say a TRILLION here and a TRILLION there...

Edited by author 02-27-2009 11:34 PM
There was a revised figure for 4th quarter GDP released today - the forecasters were expecting more of a drop than first reported, but today's number blew everyone away. I believe I heard that the figure was a MINUS 6.2% - that is a VERY poor reading - heck, that's even a bigger drop than what the USPS says mail volume has fallen!

Another of the "blue" stocks came out with bad news today - General Electric slashed the dividend they pay their shareholders. While a cut was probably built into the stock's price, the dividend cut was sizeable. Meanwhile, the financial sector has been sinking lower as some of the megabanks (Citi in particular) can't seem to shake their problems. In fact, I think I heard that something like 30% of today's drop in the Dow could be attributed to the fall in Citigroup's share price. GE's drop also hurt the averages.

If you've been following the Downs' site, you know that he mentioned tonight that we might see 6500 on the Dow if it breaks through the key 7000 level (only 62 points above that now).

No doubt everyone has heard a veritable boatload of bad news stories on the economy. It MAY be a "glass half empty/half full kind of situation. By that I mean we could be so far down right now that there's nowhere to go but up. For instance, it's hard to envision a WORSE reading on GDP coming out for the first quarter of 2009, and if that is so, that number will be an improvement compared to the 4th quarter number - which could lead some to say "Things are getting better".

Again, Bernanke's testimony to Congress this week talked of a POSSIBLE rebound late this year IF the various stimuli & government actions work as anticipated (when has THAT ever happened?)

One final factor that is often mentioned is the GINORMOUS amount of cash "sitting on the sidelines" waiting to jump back into the stock market. A lot of the experts agree that if or when that happens, we could have a rather large move UP in the market. Perhaps by the time count is over, my route will be so small that I'll be able to spend more time pontificating over when to move MY vast hoard of cash (LOL) back into stocks.

===========================================
I forgot to mention that today's market drop brought the price of a C fund share down to $8.5403, which is a new low for the last several years.

Here's a recent article from the Seeking Alpha site about signs of a POSSIBLE bottom:

http://seekingalpha.com/article/122634-7-s...-an-economic-bottom

The US futures are looking bad this morning, as our "friends" at AIG lost another $60 BILLION or so & we're giving them some more of OUR money to help them out. Futures are down about 200 points versus fair value, so we might end the day at yet another new low. Our friend over at TSPtalk points out that the employment # due out on Friday could be ugly, and he's looking at a possible breakdown to new lows. Again, we need to see THE low, and no one seems to know when that will happen.

If my quick calculation is correct, the C fund should be sitting at around $8.14/share tonight. I did another small TSP transfer today, so I should get quite a deal, but due to the 2 transfer monthly limit, if we continue to fall, I'll have a hard time catching a bottom since I have to "save" my last transfer for a possible catastrophe.