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Here Comes The SNB Again
The SNB bought over €50 billion in euros in May to keep the CHF low as we posted previously. They have not learned their lesson. Here is the latest intervention as it happens. Soon the Swiss Bank's balance sheet will be full of increasingly worthless euros and the CHF will still be at parity with the euro.
Update 1: intervention half life now 5 minutes. EURCHF going back to UNCH. The cost to the SNB for this little fiasco: about €10 billion.
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All this and quality chokkies too! And watches that work.
Bermonkey and his magic money machine is kid stuff. The Swiss should just buy ALL the sticken markets around the world.
Oh - I guess they kind of are, now.
If this is true, it died quickly... cross via first future is back to 1.3810.
Spending billions to move a quote the equibvalent of 3-4 bid/offer spreads. I guess intervention ain't so hot when the financialization of the global economy and the requisite leverage creates a trillion-per-day monster.
Also, small uptick in crude and stocks, but no reaction in gold...
Somebody really needs to write this down as ANOTHER case study example of, "Currency Intervention Does Not Work." The fact that the half-life is in minutes, rather than months, is merely a bonus.
Exactly from Mish - Last Friday
http://globaleconomicanalysis.blogspot.com/2010/06/dollar-soars-euro-eur...
"Currency Intervention Simply Does Not Work
As I have said before many times. Currency intervention simply does not work.
For a look at Japan's currency intervention in 2003-2004, and other currency intervention madness, please consider Currency Intervention And Other Conspiracies"
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But, it was worth repeating!
Whee! Look at EURUSD go.
Edit to add: And now SPX....
Woooo someone really turned on the EUR/US pump....trying to break up through the 1.20 mark. Have they no shame any more. Rediculous manupulation.
You guys sure this isn't the backwash from a straight EUR/USD intervention to keep the S&P from breaking down?
1100 ES re-test would surprise a few for OE roll overs.
Figure it'll get gunned up to 1080-1090 before the end of the week, then plunge going into the weekend.
Rinse, repeat....
:-)
Rinse , repeat indeed......
Whoops spoke too soon, there goes gold...
Wow, all fiat currencies are racing to the bottom....
No wonder more and more Europeans are switching to the only money that can't be debased: gold.
The future is government based hyperinflation (debit default) or that same government bankruptcy. And so far the inflation plan isn't working...
They gotta suck in the sheep to buy stocks before they dump their shares, rinse and repeat. We have seen this several times in the past few weeks. Get ready for another -300+ DOW performance this week.
Wow! These porn stars -- err, Central Bankers -- give a whole new meaning to the term Minute Men. A whole new genre of sixty-second porn clips -- err, FX Charts.
I was actually watching the streaming FX quotes as it happened. The movements become extremely violent both ways, it's a dead give away now when they start the crank.....
You know it. I should have gone to bed like 2 hours ago but was stuck here watching, watching the candles. Better drama than Breaking Bad, even.
Greed overcame me and I put in the EUR buy for a few more pips profit. Which cost the Swiss 10B euros so now I know how the Goldmanites feel each day.
Kinda...dirty. :-D
Looks like they may have victory today Tyler. Might have to wait for the last hour for the plunge....
Finger is on trigger.
So when the SNB buys, I take it China and Iran are the sellers? (In the Euro market as a whole, not EUR/CHF)
I wonder if there are some massive derivatives losses that occur at EURUSD of 1.20 and the (potential) losers are aggressively trying to keep it above the payout line.
Keep it above 1.20 or suffer massive losses???
Yes there is, it is called Eastern Europe
SNBs problem is that no one covers their shorts anymore, it just brings in more sellers.
You do not want to be seen as weak savanna.
Feels like they got help from Ben in the EURUSD
Oh for sure. Seeing the dollar rising while gold is hitting all time highs does not compute with his textbook readings. Solution: Print some more fiatskis and temporary get a short squeeze. momentum trading chasers, bash the dollar.
We did not expect to have Bernanke make such a silly statement such as , "The economy is recovering" only to look like a fool as deflation takes hold and the interventions and distortions are having a small impact. Same with the short squeeze attempts. More short lived and fewer shorts are covering. The switch was flipped.
They would be better off backing the euro with gold 1/1000 of an ounce equals a euro to be redeemed at a swiss bank near you
First currency to go asset-backed (gold-backed) renders all other currencies worthless.
well they could back the euro with 1/1000th of an ounce and back their own with an even smaller amount like a tiny piece of pure gold thread in each bill.lol
Doesn't matter how many times they try, it will fail. Eventually the intervention will have no effect and as said, they'll continue to lose money.
Funny how people behave when they're spending other peoples money...not a care in the world.
Right about 1115 or so I saw 15000 sep 2010 850 spy puts go off on the bid and the market promptly rocketed higher..open interest as of yesterday was right around 11500. Somethn is goin on
Epic morons.
They only get 2 min of fame nowadays, soon all CBankers will be totally forgotten.
They are not acctualy buying euros they are just swapping.
Ya but they set the price for those actually BUYING through risk free peer pressure same as the gold game.
"The cost to the SNB for this little fiasco: about €10 billion."
I'd have to disagree with this because the SNB, like any other central bank, simply "prints" whatever they need. So, did it really "cost" them anything?
The sooner these barbarous relics, a.k.a. central banks, are gone, the better!
Lets be honest.....the shelf life today is what...2.5 hours. I love it when the fuckers shoot themselves in the foot.
Euro closes down today.....