Sequestration + stock market = your TSP

Monday - 10/22/2012, 2:00am EDT

If some folks are correct about the Mayan calendar, we are in for a very bleak Christmas season indeed. If all goes as predicted, you won't have to worry about your use-it-or-lose-it annual leave.

Forget presents. Don't bother stocking up on eggnog. Don't bother to make your December or January mortgage payment. What's the bank going to do, foreclose?

Even if the world doesn't end on Dec. 21, a potential politician-designed fate awaits us: Sequestration. Those automatic, across-the- board cuts that will take place in January unless Congress and the White House do the unthinkable and agree on something. Politicians say they are now working frantically to save us from the ticking fiscal time bomb they created.

Since sequestration is an unknown quantity to most (maybe all) of us, every likely scenario is in part guess-work. There is also a political and/or PR spin to many of the predictions of gloom and doom. Friday's column laid out some of the guesstimates. That prompted some comments from long-time feds. Some of them say that even if the worst doesn't happen, the buildup to sequestration could rattle the stock market and your TSP balances. Some responses were deadly serious, some tongue-in-cheek. Take your pick:

Mike, RE: your Friday column comment on a last-minute agreement that will defuse sequestration. While I think that may be what happens, I am afraid it will be too little, too late.

In a rush to do something, anything, they may not do enough to quell the markets. The more they put into this, the more they will get out of it. A last minute hack job is likely to send the market into a frenzy.

I am at a point now that I cannot risk another financial meltdown with my retirement but the returns in C and S funds have been so good I don't want to move to G unless I have to.

As the sequestration issue unfolds, you would do us all a great service by bringing forward advisers on what we should do with our TSP accounts. — C.P., Hampton, Va.

Great comment. Any thoughts or advice?

Finally this upbeat take from a long-time, about-to-retire fed:

What happens if sequestration happens? It is all such a game of chance! I just hope I see Jan. 3 without a hitch, and I can read your articles at home. I promise not to write too many notes to you!...But now the Mayan calendar is different! My eye doctor and I agreed a few years back that this is the year to not plan on Christmas shopping until Dec. 23. Why waste the time? If is is the end of time, then we do not need to bother. If it is not, then there should be some great buys! Who cares if the family gets the Christmas leftovers from Wal- Mart? Hey, we have the day to be together!

If it is the end of time, then I think God will be more pleased that maybe we spent more time praying. With that said, I think maybe God left that fear in us to see how many of us will remember to count our blessings and pray more often. I believe he does have a sense of humor! For those who do not believe this, then they have not walked down a city street with their eyes really open." — Cindy with the IRS...but not much longer

So how about tapping the wisdom of the crowd? What, if anything, should people be doing — including doing nothing?


NEARLY USELESS FACTOID

By Jack Moore

The fear of mayonnaise — yes, it's apparently a real thing — is called mayophobia.


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