Thread: Seriously though unlimited to two IFT's?

Greg Long and Tracy Ray of TSP and the FRTIB wacko's. You can thank the jackasses that rep. the employee's too, about 12 or 14 of them. They don't give a **** about us they just want sheep.

We were raising hell, writing our congressmen, writing letters, signing petitions, had a web site to support TSP participants, our repersentives went to Washington for meetings, they wouldn't listen and did it anyway. They were threatening government workers that complained. We fought the good fight and lost.

I wrote the TSP about 1 year ago and asked about the possibility of changing the number of IFT's from 2 to 4 per month. About 6 months later, I received a response stating that "Congress had made it a law that the TSP investors would be limited to 2 IFT's per month to keep administrative costs low". I never tried to verify if it was a law or not and dropped it. I don't think there is a chance of getting it changed.

Originally Posted by jkenjohnson

I wrote the TSP about 1 year ago and asked about the possibility of changing the number of IFT's from 2 to 4 per month. About 6 months later, I received a response stating that "Congress had made it a law that the TSP investors would be limited to 2 IFT's per month to keep administrative costs low". I never tried to verify if it was a law or not and dropped it. I don't think there is a chance of getting it changed.

Actually the price of business went up as a result of limiting IFTs, they don't care, Big Banks making Big MONEY!

Originally Posted by jkenjohnson

I wrote the TSP about 1 year ago and asked about the possibility of changing the number of IFT's from 2 to 4 per month. About 6 months later, I received a response stating that "Congress had made it a law that the TSP investors would be limited to 2 IFT's per month to keep administrative costs low". I never tried to verify if it was a law or not and dropped it. I don't think there is a chance of getting it changed.

Seriously? You got that in writing? ? ?


I WOULD LOVE to see that in writing.

No, Congress never put anything like that in law. If they said that Congress is to blame, they are lying.

Originally Posted by nnuut

Actually the price of business went up as a result of limiting IFTs....

That's what really jerks a knot in my cord. The main reason that Greg Long and Tracy Ray used to convince the FRTIB to make the change to limit the number of trades allowed was to reduce cost for everyone else. Their contention was that a few feds were daytrading the TSP and that was driving up the cost for everyone else. Their logic was flawed from the very beginning. I know that I and others sent letters telling them that exactly the opposite would occur. The flawed logic goes like this, occasionally the market makes big moves, when that happens many people move money. Because of the way that they have to do the accounting, they will sometimes guess at what the cost of trading the next morning will be is. On big move days, if they make a mistake, the make up money becomes an administrative cost. Ray pointed the board to several big move days when they made the wrong guess and admin cost were high. (Funny thing is that sometime the opposite is true and the fund made money but Ray didn't mention that.) Ray said that it was the daytrading crowd causing this problem. The flaw in the logic is that by limiting moves to 2 per month instead of 30, you still have big move days. They still make mistakes and cost of those mistakes are still high. Add to that the fact that if you have some people buying and some people selling every day, the buyers and sellers can sometimes even out and that lowers trading cost because the trade happens on paper. You don't have to buy/sell stock and thus you have lower transaction cost. When you reduce the number of trades, you reduce you own internal volume which RAISES transaction cost. It is amazing to me that a financial accountant would make such an obvious mistake.

Truth is, I don't think a mistake was made. I think that Greg Long wanted to protect us from ourselves. We are too dumb, in his mind, to be able to handle our own financial decisions. We children need to be controlled so that we don't make financial mistakes. Thus he forced this issue through the board under the guise of saving money for everyone. SURPRISE! They have cost us more money yet they are unwilling to admit their mistake.

It is upsetting to me because we have created an environment in wallstreet where large buyers and sellers of stock have learned how to manipulate the system to take equity out of the stock market and put it into their own pockets. It is the buy and hold crowd that the equity is being taken from. Limiting our number of trades hampers our ability to deal with this problem.

I would LOVE to have 4 trades per month. That would be enough trades for me 99% of the time. I'm making 2 work, but I'd rather have more. I don't see it happening.

Oh, and one more thing. Board members were monitoring this board. They figured out who some of us were. They acted on some of what they discovered here.

Originally Posted by FundSurfer

That's what really jerks a knot in my cord. The main reason that Greg Long and Tracy Ray used to convince the FRTIB to make the change to limit the number of trades allowed was to reduce cost for everyone else. Their contention was that a few feds were daytrading the TSP and that was driving up the cost for everyone else. Their logic was flawed from the very beginning. I know that I and others sent letters telling them that exactly the opposite would occur. The flawed logic goes like this, occasionally the market makes big moves, when that happens many people move money. Because of the way that they have to do the accounting, they will sometimes guess at what the cost of trading the next morning will be is. On big move days, if they make a mistake, the make up money becomes an administrative cost. Ray pointed the board to several big move days when they made the wrong guess and admin cost were high. (Funny thing is that sometime the opposite is true and the fund made money but Ray didn't mention that.) Ray said that it was the daytrading crowd causing this problem. The flaw in the logic is that by limiting moves to 2 per month instead of 30, you still have big move days. They still make mistakes and cost of those mistakes are still high. Add to that the fact that if you have some people buying and some people selling every day, the buyers and sellers can sometimes even out and that lowers trading cost because the trade happens on paper. You don't have to buy/sell stock and thus you have lower transaction cost. When you reduce the number of trades, you reduce you own internal volume which RAISES transaction cost. It is amazing to me that a financial accountant would make such an obvious mistake.

Truth is, I don't think a mistake was made. I think that Greg Long wanted to protect us from ourselves. We are too dumb, in his mind, to be able to handle our own financial decisions. We children need to be controlled so that we don't make financial mistakes. Thus he forced this issue through the board under the guise of saving money for everyone. SURPRISE! They have cost us more money yet they are unwilling to admit their mistake.

It is upsetting to me because we have created an environment in wallstreet where large buyers and sellers of stock have learned how to manipulate the system to take equity out of the stock market and put it into their own pockets. It is the buy and hold crowd that the equity is being taken from. Limiting our number of trades hampers our ability to deal with this problem.

I would LOVE to have 4 trades per month. That would be enough trades for me 99% of the time. I'm making 2 work, but I'd rather have more. I don't see it happening.

Oh, and one more thing. Board members were monitoring this board. They figured out who some of us were. They acted on some of what they discovered here.

One of the (if not the) best post this year.

Exactly the "I" Fund was the main problem and Barclays was blowing their predictions on a daily basis and costing more money. We suggested that IFT in the "I" Fund be based on the opening price the next day curing the problem and saving money, but Barclays liked the income, I suppose. In my recollection that was the main problem.

The only thing they were worried about was keeping their costs down because that is claim to fame - a low cost program. As others said, that backfired on them - Thanks to James for all his research on this.

Low costs were the only thing they really have over other programs. Their investment options are very limited. The transfer deadline is frustrating.

Greg Long actually called me at work (not sure how he got my number) and we shared a few emails. He was very nice to me but it was obvious that they were not interested in compromises. They made up their mind it was going to be 2, and there was no interest in charging fee for extra transfers.

Originally Posted by tsptalk

The only thing they were worried about was keeping their costs down because that is claim to fame - a low cost program. As others said, that backfired on them - Thanks to James for all his research on this.

Low costs were the only thing they really have over other programs. Their investment options are very limited. The transfer deadline is frustrating.

Greg Long actually called me at work (not sure how he got my number) and we shared a few emails. He was very nice to me but it was obvious that they were not interested in compromises. They made up their mind it was going to be 2, and there was no interest in charging fee for extra transfers.

Two things:
1 - There is no administrative cost ceiling on TSP in the US Code. No provision was implemented to say administrative costs would exceed ?%.
2 - Review the last FRTIB meeting minutes and you will see that when they implement the limit of 2 trades per month, costs actually went up. But now, we seemed to have dropped back to the level BEFORE we had limits. I wish to know WHY?!?!? How did this happen? Blackrock vs. Barclay?

I have petitioned my Congressmen to review the information to determine why these glaring disparagies exist.

Administrative Costs since 2000:

Administrative Costs TSP.jpg

S & I Fund numbers for 2000 - 0%

This is NOT trade costs! Just verifying on the overhead.