Barclays Sums Don't Add Up for Doubtful

[CountryBoy]

Interesting analysis from Bloomberg's. Just another reason to doubt the board's guidance. 'Nuff said.:worried:

http://www.bloomberg.com/apps/news?pid=20601039&sid=a5.Ww2s0dmd0&refer=home

CB

[luv2read]

I don't trust Barclays or FRTIB. Barclays is the reason for the IFT restrictions.

http://www.tsptalk.com/mb/showpost.php?p=163196&postcount=3

[sdouglas3]

I don't trust Barclays or FRTIB. Barclays is the reason for the IFT restrictions.

http://www.tsptalk.com/mb/showpost.php?p=163196&postcount=3


That is correct! Barclays didn't have the resources to mange their own risk while we were making money and they couldn't. They went to the board and complained. Hence, IFT restrictions. Cry babies.

[Miss_Piggy]

Guys,
Can I blow my very modest and usually financially dumb own horn for once? :laugh:
I thought from the beginning that Barclays was behind all this:


http://www.tsptalk.com/mb/showpost.php?p=132980&postcount=86 (http://www.tsptalk.com/mb/showpost.php?p=132980&postcount=86)
and
http://www.tsptalk.com/mb/showpost.php?p=138915&postcount=513 (http://www.tsptalk.com/mb/showpost.php?p=138915&postcount=513)

http://i273.photobucket.com/albums/jj217/mptsp/forum/dancingbaby.gif

[luv2read]

Guys,
Can I blow my very modest and usually financially dumb own horn for once? :laugh:
I thought from the beginning that Barclays was behind all this:


http://www.tsptalk.com/mb/showpost.php?p=132980&postcount=86 (http://www.tsptalk.com/mb/showpost.php?p=132980&postcount=86)
and
http://www.tsptalk.com/mb/showpost.php?p=138915&postcount=513 (http://www.tsptalk.com/mb/showpost.php?p=138915&postcount=513)


http://i273.photobucket.com/albums/jj217/mptsp/forum/dancingbaby.gif

You and me both, MP.:D

[CountryBoy]

Guys,
Can I blow my very modest and usually financially dumb own horn for once? :laugh:
I thought from the beginning that Barclays was behind all this:


http://www.tsptalk.com/mb/showpost.php?p=132980&postcount=86 (http://www.tsptalk.com/mb/showpost.php?p=132980&postcount=86)
and
http://www.tsptalk.com/mb/showpost.php?p=138915&postcount=513 (http://www.tsptalk.com/mb/showpost.php?p=138915&postcount=513)

http://i273.photobucket.com/albums/jj217/mptsp/forum/dancingbaby.gif


The board et al must've thought we were all dumb, but we can see who the dim bulbs are now, like we didn't know what was going on. :laugh: Now the truth, we knew all along, is coming out.

http://www.cnbc.com/id/24639834

I wonder if they are using our retirement funds to prop up their books. :mad:

CB

[Guest2]

If our political friends in Washington aren't aware of this, does anyone
think a Congressional Hearing could be in Barclays future. Has any one
heard a Senator, Congressman or House Representative speak of such
an outrage this is ? Just curious ! :mad:

[luv2read]

The board et al must've thought we were all dumb, but we can see who the dim bulbs are now, like we didn't know what was going on. :laugh: Now the truth, we knew all along, is coming out.

http://www.cnbc.com/id/24639834

I wonder if they are using our retirement funds to prop up their books. :mad:

CB
of course they are; that's why they don't have to raise capital like the other banks after all the writedowns. They have a steady, guaranteed flow of cash...ours! This isn't the first writedown by Barclays BTW, they took a bigger hit last year and in February this year.

[luv2read]

The real answer why IFT limits were necessary - from tsp.gov. Just updated after the new rule went into effect. The liquidity reserve is invested in futures contracts. In October, the liquidity reserve was short, not due to IFT's, but due to Barclays bad investments. If I read the contract SOW correctly, Barclays is supposed to have adequate reserve to meet the needs of daily client activity...not gamble it on futures. Sounds like breach of contract to me. Also note what it says about Fair Valuation and the I Fund. "Fair Valuation prevents traders from exploiting “stale” prices, thus diluting the returns of other TSP participants who invest in the I Fund." One reason they gave for limits was active participants diluting returns of passive participants. If the FV mechanism already in place prevented that, why were IFT limits required? Because Barclays screwed up with the liquidity reserve and screamed "uncle." Opinions?




Barclays Equity Index Fund — The C Fund is invested in the Barclays Equity Index Fund. The C Fund holds all the stocks included in the S&P 500 Index in virtually the same weights that they have in the index. The performance of the Equity Index Fund is evaluated on the basis of how closely its returns match those of the S&P 500 Index. A portion of Equity Index Fund assets is reserved to meet the needs of daily client activity. This liquidity reserve is invested in S&P 500 Index futures contracts.


The C Fund invests in the Barclays Equity Index Fund by purchasing shares of the Barclays Equity Index Fund “E,” which, in turn, holds shares of the Barclays Equity Index Master Fund along with a liquidity pool. As of December 31, 2007, C Fund holdings constituted $79.4 billion of the Equity Index Master Fund, which itself held $124.7 billion of securities.
**********

Barclays Extended Market Index Fund — The S Fund is invested in the Barclays Extended Market Index Fund. The DJW 4500 Index contains a large number of stocks, including illiquid stocks with low trading volume and stocks with prices lower than $1.00 per share. Therefore, it is not efficient for the Barclays Extended Market Index Fund to invest in every stock in the index. The Barclays fund holds the stocks of most of the companies in the index with market values greater than $1 billion. However, a mathematical sampling technique is used to select among the smaller stocks. Barclays’ mathematical model considers size and industry group to match the industry weights in the index. Within each industry group, Barclays selects stocks that, together, are expected to produce a return that is very close to the industry’s return in the DJW 4500 Index. The performance of the Extended Market Index Fund is evaluated on the basis of how closely its returns match those of the DJW 4500 Index. A portion of Extended Market Index Fund assets is reserved to meet the needs of daily client activity. This liquidity reserve is invested in futures contracts of the S&P 400 and Russell 2000 (other broad equity indexes).


The S Fund invests in the Barclays Extended Market Index Fund by purchasing shares of the Barclays Extended Market Index Fund “E,” which, in turn, holds a liquidity pool and shares of the Barclays Extended Market Index Master Fund. As of December 31, 2007, S Fund holdings constituted $18.8 billion of the Extended Market Index Master Fund, which itself held $26.5 billion in securities.
***********
Barclays EAFE Index Fund — The Barclays Fund holds common stocks of all the companies represented in the EAFE Index in virtually the same weights that they have in the index. The return on the Barclays Fund (and on the I Fund) will differ from that of the EAFE Index on days when Barclays makes a “fair valuation” adjustment to reprice the securities held by the fund. Fair valuation adjustments are made on days when there are large movements in either U.S. equity markets or currency exchange rates after the foreign markets have closed. Fair valuation prevents traders from exploiting “stale” prices, thus diluting the returns of other TSP participants who invest in the I Fund. The performance of the EAFE Index Fund is evaluated on the basis of how closely its returns match those of the EAFE Index. A portion of EAFE Index Fund assets is reserved to meet the needs of daily client activity. This liquidity reserve is invested in futures contracts.


The I Fund invests in the Barclays EAFE Index Fund by purchasing shares of the Barclays EAFE Index Fund “E,” which, in turn, holds a liquidity pool and shares of the Barclays EAFE Index Master Fund. As of December 31, 2007, I Fund holdings constituted $29.6 billion of the EAFE Index Master Fund, which itself held $60.3 billion of securities.


Note:
Participants’ interfund transfer (IFT) requests redistribute their existing account balances among the TSP funds. For each calendar month, the first two IFTs can redistribute money among any or all of the TSP funds. After that, for the remainder of the month, IFTs can only move money into the G Fund. (For participants with both civilian and uniformed services accounts, this rule applies to each account separately.

Question: Why do our tsp funds make up more than 50% of the total amount of each of these Barclay's funds? Who are the other investors?

[Frixxxx]

It appears that barclays is gambling with "OUR" retirement funds and our fearless board has gone belly up in protecting our interests. ........
We could very well be having our accounts emptied and we'd never know the difference, because of how they can cook the books. :mad:

The Fugitive
Been happening for years.

SEE http://www.govexec.com/dailyfed/1004/101404cdpm1.htm

and that's from 2004!

and earlier:
http://www.apwu.org/news/nsb/2002/nsb06-2002-031502.htm

:cool:

[luv2read]

Been happening for years.

SEE http://www.govexec.com/dailyfed/1004/101404cdpm1.htm

and that's from 2004!

and earlier:
http://www.apwu.org/news/nsb/2002/nsb06-2002-031502.htm

:cool:
Frixxxx,

That's a different (but related) issue. Treasury always uses the trust funds including G fund and SS when Congress fails to raise the debt ceiling. It has nothing to do with what Barclays is doing with our TSP C/S/I funds and IFT limits, which is what I meant to discuss. Sorry if I didn't make myself clear.:)

[Frixxxx]

Frixxxx,

That's a different (but related) issue. Treasury always uses the trust funds including G fund and SS when Congress fails to raise the debt ceiling. It has nothing to do with what Barclays is doing with our TSP C/S/I funds.:)

Sorry, for the miscommunication. I was referring to his comment on the politicians....Barclay's gambles the money, politicians use it for a safety net.:cool:

[Guest2]

Frixxx, I used your link on my thread, thanks for the info :)

[luv2read]

I think there's a thread on one of the forums about "tinkering with the G fund" from way back. Big discussion about using the trust funds, but the law lets them do it, they wrote the ability into the laws that created FERS.:mad:

[Silverbird]

eek, our money invested in futures...thanks Barclay. Not what we signed up for. Isn't Barclay supposed to get a (small) percentage out of this as profit for them to play around with instead of our accounts???:mad:

[luv2read]

Sorry, for the miscommunication. I was referring to his comment on the politicians....Barclay's gambles the money, politicians use it for a safety net.:cool:
Oh, I see! Good point!:)

[luv2read]

Slowly but surely coming clean...or are they? Don't forget, they don't have to raise capital because every 2 weeks they get a fresh infusion from 4M government employees. It's what they're doing with it that we have to worry about. The division of Barclays to watch in particular is BGI. The information I posted earlier from the TSP site names the Barclays funds that our C, S, I funds are invested in. You can go to "Fund Sheets" on tsp.gov to read it there if you like.:)


Barclays profit falls, leaves capital options open
Bank's $3.3 billion write-down partially offset by gains on own debt
By Simon Kennedy (http://www.marketwatch.com/news/mailto.asp?x=115+107+101+110+110+101+100+121&y=Simon+Kennedy&z=marketwatch.com&guid=%7Be71ca34e-4737-498f-a789-93d9a1377593%7D&siteid=mktw), MarketWatch
Last update: 8:57 a.m. EDT May 15, 2008
LONDON (MarketWatch) - U.K. bank Barclays said Thursday that its first-quarter profit fell from a year earlier due to a 1.7 billion pound ($3.3 billion) write-down at its investment banking arm as it also left the door open for a possible rights issue.
The U.K.'s third-largest bank didn't give any overall figures for the quarter, but said tough capital market conditions in March dragged its bottom line lower.
Barclays' investment banking arm, Barclays Capital, remained profitable in the quarter even after its write-downs, which were partially offset by a 700 million pound gain due to changes in the value of its own debt.
The unit wrote down around 2.3 billion pounds in 2007.

Other divisions posted solid profit growth, especially its Barclaycard credit card business, which benefited from "excellent income growth" in international markets as well as lower impairments in its core U.K. business.
The group said it expects its equity Tier 1 capital ratio -- a key measure of financial strength -- to be slightly below 5.1% at the end of June and also stuck to its long-term target level of 5.25%.
Rights issue possible
However, on a conference call, Finance Director Chris Lucas said the bank is keeping all its options open for strengthening its capital positions, including selling shares to existing investors through a rights issue. The bank has also previously attracted fresh capital from China and Singapore, making sovereign wealth funds another potential source of cash.
Rivals including Royal Bank of Scotland, HBOS, and Bradford & Bingley have all announced rights issues in recent weeks, driving speculation that Barclays will follow suit.
Lucas also effectively dismissed the possibility of the bank paying its interim dividend in stock, which RBS, HBOS and Bradford & Bingley have all said they will do as a further way to retain capital.
"Our view on scrip dividends is that they're not really a dividend, therefore they wouldn't be attractive to us," Lucas said, adding that the dividend -- to be decided in August -- should mirror earnings.
Citigroup analyst Tom Rayner said even if the bank does rebuild its equity Tier 1 ratio to 5.25%, it will still be among the bottom 10% of European banks by that measure and significantly behind U.K. peers after they raised more cash.
Lucas said the bank's relative capital strength hasn't constrained any of its business activities. But he did concede that it wants a capital ratio of "at least" 5.25%, having previously been happy to operate a little above or below that level.
Shares in Barclays fell 2.8% in afternoon London trading, amid broad declines for the banking sector. Shares in Barclays are down around 17% since the start of the year.
Keefe, Bruyette & Woods analyst James Hutson said he was surprised Barclays didn't announce a capital increase, adding he had been expecting both a stock dividend and a capital injection from sovereign wealth funds.
The bank raised around 3.6 billion euros from Singapore's Temasek Holdings and China Development Bank last summer as part of its unsuccessful attempt to buy ABN Amro.
Monoline exposure grows
Barclays' latest write-down included 495 million pounds against collateralized debt obligations on asset-backed securities and 1.21 billion pounds against other credit market exposures.
Overall exposure to risky debt was slightly reduced in most areas. But risk exposure to bond insurers more than doubled to 2.78 billion pounds as the underlying asset value on existing contracts fell.
Looking at trading since the end of the quarter, Barclays said profit at most divisions in April exceeded the previous year.
But Barclays Capital suffered as around 500 million pounds of the gains it made on its own debt reversed.
The division remained profitable for the year to date even after this reversal, Barclays added.