More Flying Pigs
CIGA Eric

S&P slashed Greece’s credit rating to the lowest in the world today. Bill Gross also stated that US is in even worse financial shape than Greece. Logic dictates that S&P should downgrade the US’s credit rating soon, right?

Headline: S&P slashes Greece to lowest, says default likely

Greece became the lowest-rated country in the world in the rankings of Standard & Poor’s on Monday, putting it below Ecuador, Jamaica, Pakistan and Grenada.

The rating agency cut Greece three notches and warned it would view a likely debt restructuring as a default.

This was the latest blow for the country’s Socialist government, which is scrambling to push a new austerity package through parliament to clinch continued funding under a year-old bailout plan despite rising public discontent.

Barely a year after Athens was granted a first 110-billion-euro aid package, the European Union, the IMF and the European Central Bank are working on a second funding deal.

Source: yahoo.com ^[1]

Headline: US Is in Even Worse Shape Financially Than Greece: Gross

When adding in all of the money owed to cover future liabilities in entitlement programs the US is actually in worse financial shape than Greece and other debt-laden European countries, Pimco’s Bill Gross told CNBC Monday.

Much of the public focus is on the nation’s public debt, which is $14.3 trillion. But that doesn’t include money guaranteed for Medicare, Medicaid and Social Security, which comes to close to $50 trillion, according to government figures.

The government also is on the hook for other debts such as the programs related to the bailout of the financial system following the crisis of 2008 and 2009, government figures show.

Source: cnbc.com ^[2]

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Reader Questions
CIGA Eric

Greg, Myron, and friends

I certainly understand the intellect quandary provided by the money game. The money game, which at times makes chess look like beer checkers ^[4], requires targeted understanding and years of experience to simply prevent one’s pockets from being picked.

Try not to think of smart and dumb money as classifications of investors or traders but rather the movement of money relative price in a specific market. For example, smart money or strong hands, which can be commercial, reportable or non-reportable (retail) traders, tend to be the buyers of weakness and sellers of strength in precious metals. Conversely, dumb money or weak hands tend to do the opposite. Why? This group understands the role of gold (precious metals) in the financial system; they understand it as not only highly important but also ‘managed’ currency. In more general terms, they understand the ‘game’ and play it will professional discipline until the fundamentally-driven conclusion.

Please try not to be frustrated by my proprietary tools used to interpret movement and classification of money. While the work is highly specific, it by design remains descriptively vague by design to protect not only my interests but also those of the community. The Internet has sharp eyes.

Eric,

I’ve been an avid reader of jsmineset for a bit over a year, and have been gradually getting a handle on the lingo. But it’s a bit like trying to learn the rules of chess by watching one corner of the board.

Other than the obvious connotations, could you clarify for me (or point me elsewhere if you’ve already done it) what is meant by the following terms? Like, what sectors? Where do the hedge funds fit? There are other similar references to players that I can’t remember, but are often used at jsmineset and your blog.

Smart money
Retail money

I presume "weak hands" means investing entities that are short-sighted and/or low knowledge/experience, with "strong hands" the opposite (i.e. "the small fry" vs. "the big boys"). Am I correct? And does each include an entire sector, like individual investors are always in the "weak hands" bucket, and Buffet in the strong hands? Where do the hedge funds fit in? Where to the erstwhile investment banks Goldman Sachs, et al fit in?

Thanks much for your service.

All the Best,
Greg

Eric,

Thank you for your efforts to educate. I read you post every day.

My problem……………

I don’t always understand what you are saying. I can discern your usual line of thought but sometimes the details escape me. Like, what is the or a "diffusion index"? A "Stochastic Weighted Average"?? My point being if you could introduce a small glossary page to explane some of your terms I think it would be additional help to some. If not that’s ok also as I will continue to read your post. Thanks for the help.

Myron

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