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Euro-Swiss Drops To All Time Low As European Flight To Safety Accelerates

Tyler Durden's picture




 

And while stocks once again float off in some imaginary universe of their own which has no correlation to reality (and all correlation to the frequency of 19 year old math quants' night life excursions), Europe is getting worse, as the FX flight to safety accelerates. Following earlier speculation that Dexia may be in trouble, or who knows why, the CHF just spiked higher as both USDCHF and EURCHF pairs snapped lower, with the second hitting a fresh all time low. Keep an eye on what is going on here, as for the time being this is the flight to safety trade. In the meantime, and as usual, our condolences to Swiss exporters.

USDCHF:

And an all time low in EURCHF:

 

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Wed, 05/25/2011 - 11:24 | 1309125 PicassoInActions
PicassoInActions's picture

Time for SNB to get their hands dirty

Wed, 05/25/2011 - 12:55 | 1309507 silberblick
silberblick's picture

Yes, and click below to see a graphic illustration of bankster's dirty hierarchy of needs:

http://thesilvergoldhedge.blogspot.com/2011/05/banksters-dirty-hierarchy...

Wed, 05/25/2011 - 15:17 | 1309978 margaris
margaris's picture

you cant intervene against a flight to safety...

but what would be doable for SNB is to make its safe haven a little less safe....

how can they do that?

Wed, 05/25/2011 - 16:16 | 1310219 Orly
Orly's picture

I can fix it in fifteen minutes.

:D

Hildebrand: Swiss banks are under considerable pressure from Eastern European mortgage holders, whom we believe will begin defaulting in record numbers this summer.

That's pretty much all he would have to do.  Fourteen minutes to set up the podium, thirty seconds to say the words and another thirty seconds to watch their faces.

You have to ask yourself why isn't he doing that?  If they were really that concerned, he could certainly at least "leak" something halfway juicy.  To me, he's not doing that for a reason.

Must not be part of the plan.

:D

 

Wed, 05/25/2011 - 16:40 | 1310302 Urban Redneck
Urban Redneck's picture

That solution is just as artificial as the the run up in CHF. 

The truly perverse aspect is that since the unwind tends to be faster and steeper then the ascent when the SNB was building reserves- the big RISK ON unwind will probably generate huge F/X profits as well as make Swiss exports more attractive again.

Central Banks should not be run as for-profit prop trading desks, the goal is supposed to be economic and price stability.  Granted this can appear impossible when confronted with the Bernanke-Trichet-Shirakawa triumvirate (Hewlett Packard, Olivetti, Richoh keiretsu), but it not like there is a shortage of smart fiscally conservative bankers here who help can develop possible solutions. 

Wed, 05/25/2011 - 18:10 | 1310597 Ratscam
Ratscam's picture

PH is neither an intelligent nor a funny guy, rather a person you want to avoid inviting on a week long sailing trip in Croatia. His entourage is full of boring wimps who change their mind and attitude like we change our underwear, daily i hope.

Wed, 05/25/2011 - 20:37 | 1311138 johny2
johny2's picture

The CHF is just going to be one of the last dominoes to fall, nothing else. Not much of a safety in my opinion, but obviously most of people have missed the chance to get on the PM lifeboat, and are too scared to try and catch up now that the price has already gone a bit higher. The eastern european mortgages in CHF are much more toxic than subprime in USA, but it seems too complicated to know who is going to suffer from these defaults. Is it going to be Swiss banks? 

 

Wed, 05/25/2011 - 11:30 | 1309136 Cash_is_Trash
Cash_is_Trash's picture

Metals: the true flight to safety.

Wed, 05/25/2011 - 11:30 | 1309137 slaughterer
slaughterer's picture


05-25 11:19: Greek PM says speculation on default, restructuring does not help Greece 05-25 11:13: Greek PM says Greece is a victim of speculation Look at the instantaneous PM spec reaction to these recent blurbs from Greek PM.

Wed, 05/25/2011 - 11:32 | 1309155 Dick Darlington
Dick Darlington's picture

Those evil evil speculators!

Wed, 05/25/2011 - 11:28 | 1309149 achmachat
achmachat's picture

I'll have to go to the supermarket and check how much a bottle of "RIVELLA" costs now...

Wed, 05/25/2011 - 11:32 | 1309168 cowdiddly
cowdiddly's picture

Kewl, Tissot watches 20% off

Wed, 05/25/2011 - 11:37 | 1309190 gmrpeabody
gmrpeabody's picture

"In the meantime, and as usual, our condolences to Swiss exporters. "

Classic Tyler!

Wed, 05/25/2011 - 11:51 | 1309249 M.B. Drapier
M.B. Drapier's picture

Speculators are stockpiling Lindt bunnies as we speak.

Wed, 05/25/2011 - 17:29 | 1310469 malek
malek's picture

Yep.
...and our congratulations to Swiss importers!

Wed, 05/25/2011 - 12:21 | 1309363 Urban Redneck
Urban Redneck's picture

Kewl, Tissot watches 20% off

Where?

 

Wed, 05/25/2011 - 18:12 | 1310606 Ratscam
Ratscam's picture

price increases all over the place for food and beverage in CH

Wed, 05/25/2011 - 11:31 | 1309161 Dick Darlington
Wed, 05/25/2011 - 12:11 | 1309329 A Man without Q...
A Man without Qualities's picture

Yes, they all rallied on the back of the excellent durable goods orders to close the day green....

Wed, 05/25/2011 - 11:32 | 1309170 Treasure Freedom
Treasure Freedom's picture

:-0

Wed, 05/25/2011 - 11:33 | 1309172 monopoly
monopoly's picture

Sure gald all is well here and we do not have those problems. Thanks Bernank. lol

Wed, 05/25/2011 - 11:43 | 1309201 gmrpeabody
gmrpeabody's picture

Speaking for myself, I'm just gald to be here at all.  ;- )

Wed, 05/25/2011 - 11:33 | 1309173 mayhem_korner
mayhem_korner's picture

My PMs are looking a tad shinier today...

Wed, 05/25/2011 - 11:37 | 1309181 hugovanderbubble
hugovanderbubble's picture

Thanks Tyler,

 

The most funny thing

 

Tomorrow is another BRadley Turning point day....26th may....

 

I expect high volatility till monday

Wed, 05/25/2011 - 12:00 | 1309289 eckart
eckart's picture

my horoscope said the same thing!

Wed, 05/25/2011 - 11:37 | 1309182 mynhair
mynhair's picture

Very bullish for stop-sweeping.

Wed, 05/25/2011 - 11:37 | 1309192 Tense INDIAN
Tense INDIAN's picture

Nifty still moving playing in channels...expect 1 more down day.

 

http://markettechnicals-jonak.blogspot.com/

Wed, 05/25/2011 - 11:42 | 1309213 THE DORK OF CORK
THE DORK OF CORK's picture

The Franc and the Euro are one of the same since the SNB sold half of the Gold.

Its fiat baby.

Wed, 05/25/2011 - 12:17 | 1309347 Urban Redneck
Urban Redneck's picture

The SNB does have leverage over the world's highest concentration of good delivery bar refiners, and a whole bunch of crappy fiat to play with.  Since the gold reserves are actually marked to market each day, why not increase them each day?  Hildebrand would be putting serious, but indirect pressure on the other central bankers to reduce excess flows into CHF and strengthening the SNB's balance sheet at the same time. 

Thu, 05/26/2011 - 12:04 | 1310489 malek
malek's picture

Yeah, but what's maybe more important is they still hold most gold per person:
http://www.economist.com/blogs/dailychart/2011/04/gold_reserves

Talk about least bad.

Edit: link doesn't work anymore. Google "gold reserves per person" for it.

Wed, 05/25/2011 - 11:46 | 1309216 B-rock
B-rock's picture

European on my shoe.

Wed, 05/25/2011 - 11:53 | 1309244 6 String
6 String's picture

And while stocks once again float off in some imaginary universe of their own which has no correlation to reality (and all correlation to the frequency of 19 year old math quants' night life excursions)

Classic...and exactly what I was thinking. It's as if they frontran the news with an expedited Portfolio Balance Channel and got the interns in early to smooth out these very natural markets.... 

Wed, 05/25/2011 - 11:55 | 1309257 TruthInSunshine
TruthInSunshine's picture

Oh, reeeeeaaaaaaallly, now?

05-25 11:47: ECB's Mersch says debt monetisation is out of the question
Wed, 05/25/2011 - 11:54 | 1309264 mynhair
mynhair's picture

Taking from Berskank's playbook.  Refer to the entire debt, not pieces here and there.

Wed, 05/25/2011 - 12:13 | 1309324 Josephine29
Josephine29's picture

Yes I was reading about the implications of the strength of the Swiss Franc only yesterday.

The rise of the Swiss Franc has implications for Austria,Bulgaria, Hungary, Lithuania,Poland and Romania

 

http://t.co/gK6hKKo

 

The result is a poisonous cocktail particularly for Eastern Europe...

Wed, 05/25/2011 - 12:29 | 1309389 Urban Redneck
Urban Redneck's picture

Actually it is a bigger problem for the ECB & IMF than Greece, if not properly contained.

by Urban Redneck
on Wed, 05/25/2011 - 04:02
#1308162

 

The people living in Switzerland are none to happy with this situation either.  Switzerland is a country just slightly larger than the state Maryland, with a population smaller than New York City

There simply isn't the domestic capacity, or even the insanity, to try and absorb all the global bankster's worthless fiat. 

The situation is getting so absurd that Hank Johnson's concerns about Guam tipping over and capsizing due to overcrowding actually could come to pass in Switzerland.  However, since Switzerland isn't an island- it would suck even more for the countries around Switzerland that get sucked into the vortex and crushed, since they don't have the reserves and tradition of preparation that the Swiss do.    

Wed, 05/25/2011 - 18:24 | 1310655 Ratscam
Ratscam's picture

the Swiss franc is like any other fiat currency, NOT backed by gold any longer, hence doomed to take on the same fate as USD,EUR,JPD,Sterling etc. But up to this day it still lives on its merits and the perceived credibikity of the past.

only true storage of value is precious metals, sorry Switzerland!

Wed, 05/25/2011 - 12:32 | 1309405 Dick Darlington
Dick Darlington's picture

Those Swiss Franc denominated mortgages in Hungary, Poland etc are one big pile of shit. People never learn...

Wed, 05/25/2011 - 12:16 | 1309339 Dolemite
Dolemite's picture

Weak holders getting out before next leg down
http://deadcatbouncing.blogspot.com/

Wed, 05/25/2011 - 12:21 | 1309376 Nicholaz
Nicholaz's picture

When Greece defaults, Eurozone exporters will chant "Next is Spain, next is Spain".

Wed, 05/25/2011 - 12:33 | 1309408 slewie the pi-rat
slewie the pi-rat's picture

slewie ro-cham-bo: 

paper = paper

scissors = commodities

rock = PMs

today, we see scissors cutting paper and the rock breaking the scissors, while it takes more and more paper to cover the rock. 

eveybody's getting slapped silly!

Wed, 05/25/2011 - 12:33 | 1309422 Ferg .
Ferg .'s picture

Since the CHF has been on a vicious bull run against the EUR for years now I'd imagine Swiss exporters have been piling into forward contracts , so this latest dive probably won't affect them too much...until the next batch of contracts has to be negotiated that is  .

Wed, 05/25/2011 - 13:40 | 1309666 lubyanka
lubyanka's picture

swiss companies close to the border actually started to pay their EU employees in Euro...some also started to pay their Swiss employees in Euro. Not sure what the implications of this would be if it becomes more common

Wed, 05/25/2011 - 18:17 | 1310618 Ferg .
Ferg .'s picture

If I were a Swiss employee I wouldn't be too thrilled with that arrangement . 

Wed, 05/25/2011 - 12:51 | 1309496 johny2
johny2's picture

CHF is being pushed in one direction, and I think it looks a good time to buy some silver against the CHF. But it is only my opinion and I have been wrong before about these things. Still, if the XAG/CHF goes down a little bit, I am gonna place a small bet on it.

Thu, 05/26/2011 - 00:38 | 1311991 emil
emil's picture

Maybe I've missed something but haven't I seen a report on the new high for gold priced in EUR = 1087.

 

 

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