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Thread: What do you think, F fund's future?

  1. #13

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    Default Re: What do you think, F fund's future?

    I'd post this in Bullitt's QEII thread, but the content has implications for the F fund, so thought it should be available for people to reference further on down the road. All except Birch of course, he avoids F with a passion.

    The Fed intends to concentrate the current bond buying program in the intermediate sector of 5 to 10-year maturities.
    Right now the Fedís balance sheet shows about $57 billion in total capital. QEII will take total assets above $3 trillion. At that level, it only takes a 2% drop in the average value of assets on the Fedís balance sheet for the Fed to go bankrupt. And this is in an environment where various markets frequently go up and down 3% in a single day.

    the decline in price of a bond in response to a 1 basis point increase in rates is greater when rates are at 1% than if they are at 5%. This element of volatility is independent of the fact that longer maturities are more volatile,

    hereís the bottom line on QE II. If nothing happens, the whole thing was a waste of time. If inflation takes off, the Fed will have to choose between holding bonds and letting inflation get worse or selling bonds and going bankrupt in the process.

    Since no entity goes down without a fight, the Fed will naturally hold the bonds and let inflation take off.
    F fund prices would stay up in that scenario-if I understand the mechanics, meanwhile unemployment rages and wages remain stagnant and prices on necessities scream upwards.

    http://kingworldnews.com/kingworldne..._Bankrupt.html

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  3. #14

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    Default Re: What do you think, F fund's future?

    from '09... btw, they had a great year. I wouldn't fight them. I would think like them.

    http://federalreserve.gov/boarddocs/...pdf/tables.pdf

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  5. #15

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    Default Re: What do you think, F fund's future?

    Current assets are about $2.3 trillion.
    from the same article posted earlier. was trying not to quote too much of the article-copyright issues, you know. read the article.

    "Current assets" are not the same thing as "capital". Current Assets include debt owned = treasuries purchased=LOTS. treasuries sold in any substantial amounts=interest rates go up. rates increase>2%=Fed go boom at this point. Fed won't sell, fed won't go boom, what the article said.

    http://kingworldnews.com/kingworldne..._Bankrupt.html
    Last edited by alevin; 11-08-2010 at 09:46 AM. Reason: edit

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  7. #16

    Default Re: What do you think, F fund's future?

    I think F Fund's future is most centrally grounded in China.

    On the whole its history of being the most 'guaranteed investment' has made it extremely attractive. The 'F Fund' Bond Yeilds have no other choice but to reflect the reality of our Economic Conditions and thus their yeilds have been 'mimimal'.

    The USA will not go down without a fight - and that would have to include 'raising the Bond Yeilds' - to generate more income.

    For Bonds in general -- there are many good investment opportunities.

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  9. #17

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    Default Re: What do you think, F fund's future?

    Trying to read the story at finance.yahoo.com about bonds.\


    Story is unreachable....404

    Can anyone read this story or post a good link?

    Top Stories

    Surge of Money From Bonds Could Stifle Lending- AP Americans are leaving bond mutual funds at the fastest rate in more than two years. U.S. investors pulled $8.6 billion out of bond funds in the week ended Dec. 15, the largest withdrawal since October 2008 when financial markets were in free-fall.
    THIS IS WHERE I WOULD PUT SOMETHING TO REPRESENT MY THINKING, BUT THEN THEY SHOW UP!
    Tracker =
    100%- I Fund

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  11. #18

    Default Re: What do you think, F fund's future?

    Frixxxx,

    I found the same article on NPR.

    (Those of you who think that NPR is of the devil, don't be afraid, this is an Associated Press article.)

    Surge Of Money From Bonds Could Stifle Lending
    "That's the problem with being scared to fail. You usually end up failing in the end by default." Life From Scratch, Melissa Ford


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  13. #19

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    Default Re: What do you think, F fund's future?

    Quote Originally Posted by Steel_Magnolia View Post
    Frixxxx,

    I found the same article on NPR.

    (Those of you who think that NPR is of the devil, don't be afraid, this is an Associated Press article.)

    Surge Of Money From Bonds Could Stifle Lending

    Thanks,

    You are a princess amongst posters!!!
    THIS IS WHERE I WOULD PUT SOMETHING TO REPRESENT MY THINKING, BUT THEN THEY SHOW UP!
    Tracker =
    100%- I Fund

  14.  
  15. #20

    Default Re: What do you think, F fund's future?

    Quote Originally Posted by Steel_Magnolia View Post
    Frixxxx,

    I found the same article on NPR.

    (Those of you who think that NPR is of the devil, don't be afraid, this is an Associated Press article.)

    Surge Of Money From Bonds Could Stifle Lending
    Here, frixxxx... You'll enjoy the article on Fox News more: http://www.foxnews.com/us/2010/12/23...tifle-lending/

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  17. #21

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    Default Re: What do you think, F fund's future?

    The key element in this story is where did the money go? It's not in bonds, it's not in stocks...

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  19. #22

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    Default Re: What do you think, F fund's future?

    Quote Originally Posted by tsptalk View Post
    Here, frixxxx... You'll enjoy the article on Fox News more: http://www.foxnews.com/us/2010/12/23...tifle-lending/
    Thanks Tom,

    It took me 30 minutes to finally accept that I could actually click on the NPR link without my computer exploding!
    THIS IS WHERE I WOULD PUT SOMETHING TO REPRESENT MY THINKING, BUT THEN THEY SHOW UP!
    Tracker =
    100%- I Fund

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  21. #23

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    Default Re: What do you think, F fund's future?

    Quote Originally Posted by JTH View Post
    The key element in this story is where did the money go? It's not in bonds, it's not in stocks...
    Hey, can't take it with ya.....................

    http://endoftheworld2012.net/


    http://abcnews.go.com/International/...5301284&page=1

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  23. #24

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    Default Re: What do you think, F fund's future?

    FWIW, I find the actual news reporting on NPR to be fair and balanced, all things considered. Besides, where else can you keep up with things at Lake Wobegon?

    There seems to be a lot of confusion here and at the beltway about actual news reports and opinion/editorial/entertainment shows on a given network.

    F fund's future? I think it will continue to be an option within the TSP.

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