Your TSP money and Bear Stearns...

**James48843** · 05-31-2008, 03:48 AM

Today the TSP thrift board posted the April meeting minutes at the electronic reading room of the FTRIB website.

Let me show you one little clip:

Mr. Fink asked whether any TSP assets had been loaned to Bear Stearns when it crashed. Mr. Grossman stated that he cannot publicly comment on specific borrowers (he could do so in executive session) but did state that BGI had had no
issues involving counterparty risk with any of the firms that have recently been in the headlines. Mr. Sanchez asked whether BGI analyzed the creditworthiness of all firms who borrow securities from BGI. Mr. Williams said that they did and that the
business and portfolio managers were also involved. Mr. Grossman added that if BGI has any reason to believe a borrower may have problems, BGI will scale back lending to that company or cut lending to zero.

So Barclays refused to answer in open session whether or not any TSP money was loaned to Bear Stearns when they went belly up.

But would answer in closed session. Hmmmmmmmm......

Does that make you feel better?

Read the entire minutes at http://www.frtib.gov/FOIA/minutes.html

**James48843** · 05-31-2008, 04:00 AM

Oh, yeh, I forgot to add:

Trading costs SOARED in March- (when they started locking down everyone).

And tracking error exploded once again to 120 basis points (after a 200 basis point month in February).

And they took your money in a "Fair Value" adjustment on the last day of the month again on February 29th, by clipping 120 basis points on that day, so that it would look like , on paper, that the I fund was tracking exactly with the index.

She noted that, in March, the I Fund outperformed its index by 120 basis points due to a fair value adjustment on February 29th.

If there was any doubt about Barclays taking money through the use of "Fair Value" clips, that doubt is now gone.

Go read the April meeting minutes yourself.

Compare the first three months of this year, to the same period last year, and you'll see costs are soaring now that they have limited trades.

2008:

March_Data.JPG
That was 2008.

**James48843** · 05-31-2008, 04:19 AM

Compare those cost to 2007, when people were actively trading:

March_2007.JPG

**James48843** · 05-31-2008, 04:38 AM

Sombody help me do the math here:

Costs for FREE TRADING in 2007: Costs for RESTRICTED TRADING in 2008:

YEAR 2007, JAN TO MARCH: YEAR 2008, JAN TO MARCH:

F fund $ 151,508 $ 1,359,066

C Fund $ -$215, 328 $ 412,268

S Fund $ -213,328 $ 855,307

I Fund $ 769,053 $ -709,877

TOTAL: $491,905 $ 1,916,764

COSTS THEN OFFICIALLY WENT UP BY 390% BECAUSE THEY LIMITED TRADING.

But the I Fund was only negative in 2008 because they took money in FV on January 31 and again on February 29th. January 31st is was a record 211 basis points, and another 111 basis points in February.

Febtrackingerror.JPG

Finally, this graphic on the change in trading activity. They began clamping down in February, and more so in March. People started getting locked out in March:

Ifundtrade.JPG

This is why costs are soaring.

IN the I fund alone - from a $3.9 million dollar benefit to shareholders, to a $259 thousand dollar cost.

LIMITING TRADING IN THE FIRST THREE MONTHS OF THE YEAR COST WAS BAD FOR SHAREHOLDERS-
THEIR COSTS WENT UP 390% YEAR OVER YEAR.

**Birchtree** · 05-31-2008, 04:56 AM

Certainly interesting but I don't think the bureaucrats give a rats ass about anything they do that is anti-member. Afterall the costs aren't coming out of their workaday pockets.

**alevin** · 05-31-2008, 06:11 AM

James, never mind Birch's atypical negativity. Wonder what FedSmith would do with that information if Ralph actually looked at it? I know, I know, Ralphie's attitude is "management is always right", but why not give him another chance to reconsider his belief system a little?

**squalebear** · 05-31-2008, 08:07 AM

MY LETTER I WROTE TO MR. SMITH

Mr. Ralph Smith,

Did you take a minute to read the April minutes that were posted on the
FRTIB website? (I INCLUDED THE LINK TO THE .PDF) Barclays refused to
answer, in open session, whether or not any TSP money was loaned to
Bear Stearns.

Further, Trading costs SOARED in March !

Tracking errors exploded once again to 120 basis points (after a 200 basis
point month in February). They took money in a "Fair Value" adjustment
on the last day of the month and again on 2/29 by clipping 120 basis
points on that day. This gave the appearance, on paper, that the (I)
Fund was tracking exactly with the index. If there was any doubt about
Barclays taking money through the use of "Fair Value" clips, that doubt is
now gone.

Compare the first three months of this year, to the same period last year,
and you'll see costs are soaring now. Most importantly, thats with Frequent
Trader Limits.

In conclusion, I would love to see what kind of article, this fair and balanced
website will have to offer concerning these minutes. Even if the facts don't
play out well for reporters on staff.

THANKS JAMES FOR ALLOWING US TO BE INFORMED. I DON'T BELIEVE
WE'LL SEE A ARTICLE CONCERNING BEAR STERNS, BARCLAYS OR THE
OPPOSITE EFFECT THAT COST THE 3.9 MILLION TSP PARTICIPANTS $$
DUE TO THE IMPOSED LIMITS. WHERE'S THE SAVINGS, WHERE'S OUR
ADDITIONAL GAINS ? Grrrrrrrrrrrrrrrrrrr !