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TSP Drops Fast; 2009 COLA Rate Also Drops

Unregulated Investment Banks

Examiner
INS (now DHS)
Thu Sep 18, 2008 10:24 AM

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Several things piqued my curiosity about this, one of them being a report here that a majority of us federal workers favor McCain's economic promises over the un-tested Obama's. That struck me as unlikely because we've always done better under Democrat presidents.
Besides, it's hard to sort out campaign promises from fiscal plausibility -- what a candidate promises and what he says that is actually do-able. Here's what I discovered about McCain.

(1) the earmarks he insists he will veto have been much less than 1% of the total federal expenditures. This came as a surprise. It's still a lot of money that should be saved.
(2) the perpetrators McCain says he will publically humiliate include the Department of the Army, which often inserts requests for additional funds for unexpected expenses. (It's a quick way of getting the money without having to go through the usual protocols.)

I've run out of my alloted characters. I'll try to follow up in another comment.

Commercial v. Investment banks

Examiner
INS (now DHS)
Thu Sep 18, 2008 10:49 AM

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Commercial banks (where individuals hold accounts and morgages, etc.) are regulated, and by-and-large they are in slightly better shape than the investment banks, some of which are now collapsing or threatening to. Investment banks are NOT regulated in any way because we have legislation in place that prohibits the government from regulating them. (Read that again. Think Lehman Brothers.) That legislation was the product of a bill sponsored by -- I wasn't ready for this -- John McCain (!) and Phil Graham (when he was a Senator) in 1999. That legislation also prohibited the regulation of any firm having to do with the production of energy. (Think ENRON.) This is perfectly in line with the basic Republican belief in the separation of business and government.

Obama's approach does't offer many specifics, but it DOES propose that the government regulate both kinds of banks much more tightly. (He doesn't say specifically how.) But . . .

I'm runninng out of space again

Re: Commercial v. Investment banks

It Spec
dod
Thu Sep 18, 2008 3:46 PM
to the Examiner, both major candidates speak of putting measures in place to avoid this sort of economic situation again. Neither offers significant specifics. Don't tell us it's just one of them, that's wrong.

Lost Fortune

Claims Rep
SSA
Thu Sep 18, 2008 12:07 PM

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Since October 2007, my TSP balance has dropped $100,000. It took 8 years to get these gains and like water it has all been washed away. I should have got out of the I, S, and C Fund a long time ago, but I kept letting financial advisors tell me that I should always buy low and sell high and hang in there they told me. Now, here I am with only a few years away from retirement as broke and busted as I have never been in my life. Is there a bailout for me, Mr. Fed? Or do I have to be AGI or Bear Stearns? I've never felt so poor in all of my life...By the end of McCain's first year in office, I'll be out of work and on welfare...

Re: Lost Fortune

IT Spec
dod
Thu Sep 18, 2008 4:23 PM
Claims Rep, the economy was doing well before the Democrats took control of Congress in early 07. Since then the economy has been tumbling and continues to do so. Majority Leader Harry Reid just told us that congress doesn't know what to do about the current crisis so they're going to recess. You better worry about Congress, that's where the correlation is to your losses.

Re: Lost Fortune

Retired Air Force
U.S. Navy
Sat Sep 20, 2008 3:57 AM
I hope that you have not given up and performed and interfund transfer to say the G fund. Then you would have truley washed away $100,000. As long as you have your shares you have not lost a cent. Transfer to the G fund now and you will lose $100,000. Try to think positive. Money is not everything but it does help. I went shopping the other day and saw a station wagon full of kids and it appeared to me that the family was obviously financially challenged (only some of the children had shoes and the automobile barely ran). You know what? they were the happiest family that I have seen in a long time. They were all happy. laughing and carrying on; made me want to jump out of my new mustang and be apart of their family. Go to a park, go fishing, pick up a new hobby or revisit an old one. Your comments worry me and I hope you are doing better. Now wipe your nose and go do something you enjoy!

Re: Lost Fortune

Doesnt Matter
FS
Tue Oct 7, 2008 4:50 PM
I'm in the same boat as you are. I'm the only breadwinner in my family so this is really impacting me. I wished I had moved everything into G over a year ago. I feel as you do that my job won't last until I can retire due to the downsizing - we will probably see a lot more since our whole economy is collapsing. I blame outsourcing all of American jobs to all these other countries. Our leaders and corporate CEO's don't believe in taking care of their own - they rather take care of all other countries. Who is going to be left to collect taxes from to support these other countries???

Good Times

Fed Worker
DOD
Thu Sep 18, 2008 12:13 PM

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I posted on Sept 10 that I thought the Dow was marching down to 10,000 or lower. This is not based on tarot cards or a mystic, if you look at all funds over the last 12 months the I, C, S are all trending downward, the G and F are trending up. The actual growth of the market from 1929 until the mid-1950's was rather dull. I am an advocate for keeping the bulk of money in a safe place and only investing a portion of new contributions in the Market. This way there is some reward for risk, and a hedge against loss. This has worked for me, and my Mother (rip). Of course you could listen to those whom have money in the market and they are trying to get you to stay in so they don't lose more. It is just that the fundamentals are not very sound these days.

TSP Drops Fast

Federal Employee
Department of Justice
Thu Sep 18, 2008 1:37 PM

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After yesterday I finally moved what I have left into the G Fund. I'm down in excess of $58,000, $49,000 since May, so it was time. All the financial wizards who continue to say ride out the storm can do so on their own. One analyst today actually predicted this "storm" will last through at least mid-2009.

Re: TSP Drops Fast

IT SPEC
DOE
Thu Sep 18, 2008 3:58 PM
When will you move it back in, once the market is riding high again? If so, you'll be selling low and buying high. If you don't need to tap into your TSP stock funds for the next decade, why not ride it out?

Re: TSP Drops Fast

QA
VA
Fri Sep 19, 2008 2:51 PM
I just moved all my C, S, and I into the G and F funds. I am tired of losing money due to the greed of others.

FERS v CSRS AND THE FINANCIAL MARKETS

AUSA
DOJ
Thu Sep 18, 2008 1:46 PM

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Did we make a mistake when we moved Feds from the certainty of 2% increase in a fixed annuity under the CSRS - where a retiree could count on a guaranteed 70% of high three average salary for life after 35 years of service PLUS full COLAs every year to ensure buying power? FERS could lead us to a very old work force never able to retire or a poverty class of once dedicated federal workers. Did we go wrong?

Re: FERS v CSRS AND THE FINANCIAL MARKETS

Diversity Manager
DOL
Thu Sep 18, 2008 4:01 PM
Nope the taxpayers were tired of a retirement system that was better than anything available in the private sector. So the politicians decided that since the feedback from the CS was they wanted to be more like the private sector that this was a start. Its still a gold plated retirement system so the less the public knows the better for CS workers

CPI/annuity for retirees/TSP

Former Finance Manager/Controller
Us Postal Service/Now Retired
Thu Sep 18, 2008 2:03 PM

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In response to the civil engineer from FAA. The COLA increase is the average of CPI-W for the 3rd quarter of this ear to the 3rd quarter of last year when it was 203.6. The July number was 216.3 or 6.2% above 203.6. The August index dropped 0.5% from July or down to 215.247. The average is 215.77 which 6% above the 203.6 3rd quarter 2007 base. I hope this explains it. If the September index rises by 0.2% then the January cola will be 6%. If oil prices do not drop much during September, then we should see an increase. The huge drop in transportation is what caused inflation to drop.

On the annuity for retiree. It is only as secure as the company that you have it with.

On the current state of the financial world, you can try timing the market, but you never know when it wil turn. Current employees should rebalance their portfolios and take advantage of buying stocks at reduced prices. Retirees who need the money should have allocations a balance btween risk versus reward.

Total Comments: 52
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