Kashya Hildebrand Speaks – Sinks Hubby?

Bruce Krasting's picture

I wrote about Kashya Hildebrand’s inappropriate FX trades the other day. The story has some new legs today (Bloomberg). The wife of the president of the Swiss National Bank (SNB) has done the one thing she never should have. She talked. Any chance this affair had of falling off the radar screen was lost when she went on Swiss TV.

A recap:

-8/15/11 Kashya sells CHF 400,000 short against the dollar at USDCHF .7936.

-9/9/11 the SNB devalues the CHF.

-10/4/11 Kashya covers the short and earns an FX profit of CHF 75,000 ($83,000). The return is 16.5% of the amount traded. She did this in just 50 days (120% annualized).

-November 2011 an employee of Sarasin Bank, Basel steals the information about Kashya’s trades and leaks it to a Swiss politician, Christoph Blocher.

-There is a formal investigation. On Friday night, 12/23/11, the SNB makes a public announcement that the FX transactions have been reviewed and there is nothing improper about them. The timing of the release of information was clearly an effort to bury the story.

-1/3/2012 Kashya goes on TV in what appears to me like a snotty and inappropriate defense of her actions.

Kashya’s words:


“My interest in the dollar purchase was motivated by the fact that it was at a record low and almost ridiculously cheap.”

I think this is bullshit. Yes the dollar was cheap at the time. There was a global panic occurring. To counter-trade the market at precisely the time the CHF was hitting all-time highs takes balls and an extraordinary sense of timing.

Kashya may have committed a fatal error with those words. She teed this up. Now there has to be a follow up. I’ve been trading FX for years. There is no way in hell that Kashya just happened to luck out. There is only one possible exception. If she was a regular trader of the USDCHF, she might be able to justify the impeccable results of the 8/15 trades. But if she can’t demonstrate that she was a repeat "banger" in the FX markets, then the idea that she just happened to think the CHF was “cheap” and was worthy of a spec, falls very, very flat.


It is a fact that 70 to 80 percent of the financial transactions of the Gallery are in dollars. The reason is that the artists come from many different ethnic groups, and that we participate in many art fairs around the world.

Kashya is attempting to argue that her FX trading is directly related to her art gallery business. Oh really? If that were the case, this story would never have made the headlines. If she had purchased a specific painting that was priced in dollars it could be argued that the transaction was in the normal course of her business. Importers hedge their FX exposures all the time. That’s not what happened here.

There was no painting that was being hedged. If there were, Kashya would have shown an invoice long ago. This was an outright speculation on her part. The proof is that she never took delivery of the dollars she bought. When she had a big unrealized gain, she did what any smart spec would do, take the profit.

Some personal color on this. Kashya worked for Moore Capital fifteen years ago. Guess what? During that same period, I was playing hard in the FX markets. Check my Bio. I knew Moore from back then. Louis Bacon was running the show. Moore was then (and still is) on the very top of the list of big hitters in the FX markets. They had deep pockets, great traders and they were wired.

There are no laws on the books (that I know of) regarding insider information and FX trading. Information is the key to success. Information comes in the form of expensive data systems. It also comes the old-fashioned way, word of mouth. That was true in 1995. It’s no different today. Kashya worked in a shop that understood how money was made in FX. You don't forget these lessons. FX has always been about the money, and how to get more of it.

Here's my suggestion to Kashya and Philipp Hildebrand, the Swiss media (who are reading this, thanks!) and Christoph Blocher:

Publish the FX trading activity for Kashya Hildebrand for the past 12 months. There are only two possible outcomes:


A) Kashya was a regular FX trader. She bought and sold CHF against other currencies on more than one occasion over the course of a year.

B) The 8/15 speculative transaction was a one-of-a-kind event.

Which one is it? If it is A, then Kashya repeatedly abused her position. She put her husband at risk for conflict of interest considerations. Philipp would have been an ass to let her do any regular trading. If scenario A is proven, then Philipp looks very bad indeed. It would have been extraordinary poor judgment on his part if this were the case.

If it is B, then Kashya is damned. She had to have a very specific reason to do an FX spec. If it’s shown that this was a unique event, then it’s compelling evidence that she acted with specific foreknowledge. She was wired, just like the firm she used to work at was famous for being.

A or B, I think that Kashya’s attempt to defuse this issue has backfired. She has put herself (and her husband) in a difficult corner. She has offered up an excuse for her actions.  Now it’s time to reveal some facts. Either way, it will look bad.

The outcome of this is far from certain. If Kashya is either caught in a lie, or shown to be a regular FX trader, it could easily mean the end for Mr. Hildebrand. This affair just makes the SNB look silly. That won’t be tolerated for long.

I do wonder if there are any FX implications attached to all of this. My guess is that if we were to get a surprise new head of the SNB there would be no change to the 1.20 EURCHF peg. At least not right away. But if there is a change at the top at the SNB, I suspect the life span of the peg will be shortened.

We may well have a situation where the market is forced to ask the question:

“Now that the brainchild of the peg is gone, how much is the

SNB willing to intervene at 1.20?”

If the market forces this issue, it will have broad consequences. A speculative attack on the CHF would upset all markets. Thanks in advance Kashya!


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zoomer's picture

"The chairman of the Federal Reserve Bank of New York, Stephen J. Friedman, abruptly resigned on Thursday, days after a newspaper article raised questions about his ties to his former employer, Goldman Sachs." NYT.
In addition to approving GS's app for "Bank" status for TARP$, Friedman was doing "insider trades" on GS Dec 08-Jan 09.
"During that time, Mr. Friedman bought 37,300 more Goldman shares, which have since risen $1.7 million in value." NYT.(5/7/09)
In a statement the NYFed said;
“My colleagues and I appreciate Steve’s vital service to the Bank during this time of great economic stress,” said Mr. Hughes. “We value his contributions and I know the Bank’s leadership acknowledges his unique perspectives on the economy and his financial market expertise. We all join in thanking him for his service and leadership.” Mr. Hughes(deputy chair) added.


Quinvarius's picture

Makes you wonder if the Swiss devaluation was just for a few personal dollars of gain.  Shit like this is why we all need to be on the gold standard.  Anything less is just a gateway to corruption.

Ghordius's picture

Come on, this is silly - it's not a "proper" devaluation, it's a floor, the need for it was great in the interconnected Swiss economy, the political parts applauded and it's an active intervention that gives the SNB time to build up reserves.

In the article is somehow suggested that Hildebrand is the only one between the floor policy and revaluation - this is simply not true, the SNB has a board.

Find the way to finance a morally and politically lazy empire like ours without fiat and you'll be applauded and vilified by billions. Hint: gold is not enough, too corrupted.

swani's picture

I agree. Gold will be possessed and abused by the same corrupted people that are hyper-rehypothecating fiat. 

ConfederateH's picture

According to this 20min report the Hildebrands had sold a vacation house in Gstaad in and bought a vacation appartment in Graubunden (Davos?) in October, and that is why they had so much cash to worry about...


Frau Hildebrands art business reeks of "Züri".   I can see them in the Mercedes S class and their villa on the Züri Goldküste, friends to all the Zürich elite.

UBS and CS are part of the global banking ponzi, so is the SNB simply by affilliation.  The could esily be part of Rickard's  currency wars.

Ghordius's picture

well, I do wish it was that simple about UBS and CS being part of the global banking ponzi and the SNB just by affiliation.

the sad truth is that parts of the two megabanks are part of what you call "the global ponzi"

research a bit who is the real owner of the SNB and who are the real owners of the owners of the SNB, you'll find it enlightening - a bit of warning: it's nothing you could use here in ZH to prove the "global ponzi"

ConfederateH's picture

The SNB is an Aktiengesellschaft under special regulations. About 55% of its shares are owned by public institutions like cantons and cantonal banks.[citation needed] The remaining shares are traded on the stock market. They are mostly owned by private individuals


I know that the head of SGKB is ex-UBS.  I know that these Swiss banks are as incestous as Wall St. Banks.  Gruebel went from CS to UBS.  I know that Hildebrand was brought in to sell 50% of the Swiss gold.  I know that when Gruebel took over UBS American lawyers and IT heads were brought in by the boat load.  I know that UBS HR was taken over by US style diversity goals that led to Kweku Abadoli.  I know that UBS Americas head Robert Wolf is Barak's bosom buddy and that he raised millions for Obama.  I know that UBS and CS got hundreds of billions in back door bailouts by the Fed and niether has answered to the Swiss people or their share holders.   So yes, I think that UBS, CS and the SNB are just as bought as Barak Obama, Barney Frank, BofA, GE, and all the other looters.



Ghordius's picture

+1 thumbs up ;-)  you are getting the shape of the beast

at the end, it's about neglect and corruption

Bahamas's picture

With that name (Kashia) she surely must like...  k(c)ash...nomen omen! 

Hephasteus's picture

Are you sure she isn't a post op sex change UBS Rogue trader?

Someone rip her dress off and check for a UBS rouge trader fruit bowl.

Peter Pan's picture

Relax everybody. She only made a fiat profit and unless she converted that profit into precious metals, her whole profit will add up to nothing when the world wakes up to the fact that we have been financially gutted by Monopoly money.

AldousHuxley's picture

it is not how much or how often...it is the principle that she violated.


1) If the husband makes profit on insider knowledge through proxy of his wife (who is also skilled nonetheless as ex-hedgie), then the central bankster is indeed corrupt and cannot be trusted. The act of doing this via wife also means this guy is a sneaky bastard.


2) Who knows what other unreported insider trade transactions have they proffited from?


3) Why was the whistleblower employee who reported the corruption fired instead of commended for standing up for the truth? This only serves to scare away other whistleblowers as banksters bully the innocent



Heyoka Bianco's picture

All this for $83K? At least our god ol' homegrown Murican wankers still millions and billions. Blankie uses 83,000 dollars to apply hemorroid cream.

AldousHuxley's picture

that's how greedy and stupid she is.


Remember, NY central bankster Stephen Friedman profitting off of bank bailouts?


His excuse was that goldman sachs stock purchases were motivated by a desire to demonstrate confidence in the company during a time of market distress.

mendolover's picture

Her punishment should be one long trip through a TSA checkpoint.  She looks like she could handle it.  haha

Coldfire's picture

The wife of Caesar must be beyond reproach. This does stink. The Swiss people must be so proud.

Eireann go Brach's picture

She is a fucking cunt if she hangs on the arm of a Central Banker!

Iconoclast's picture

She'd get a game though eh? ;-)

YBNguy's picture

At least she's not a former prostitute (err 'escort') like the German Presidents wife... ;)

CynicLaureate's picture

Don't be so judgmental: hookers and drug dealers are among the last honest business people selling a product that people want for a price they're willing to pay.

kekekekekekeke's picture

freaks me out so much to see my name in print

dumpster's picture

i will leak all..  going to the coast and pizz in the ocean =

onlooker's picture

This woman is trying to steal the limelight from U.S. politicians. Just who does she think she is, some kinda Nancy Pelosi or somthin. U.S.A. #1

AldousHuxley's picture

nancy pelosi profits from bank bailouts which also upholds overinflated values of her husband's real estate business.


Bonnie And Clyde....


if not via proxy of spouses, they steal via childrens or relatives accounts.

bugs_'s picture

way more here you've got a good thread Bruce - keep on it.

SquawkBox's picture

How quickly the mob forms nowadays.

Lots of us trade currencies. Lots of us thought USD was mispriced below 0.80 CHF. Some of us had the nerve to place the bet.

What's all this fuss about?

NotApplicable's picture

Ummm... lots of us aren't married to the President of the SNB?

YHC-FTSE's picture

"Conflict of interest". Now there's a phrase I don't often hear these days in politics and finance. Didn't we stop prosecuting scum who ignore that phrase back in the 90's? Its been so endemic during the past 15yrs that I just got laughed at whenever I blurted it out in the office and I doubt people care now, even in Switzerland. But that doesn't mean your efforts as well as others should not be applauded for trying to bring back sanity. Thanks.

Non Passaran's picture

The US of A has "Interest for conflict" :-)

disabledvet's picture

"You're welcome." .... I think.

emsolý's picture

Bruce, in your chronology, you should include the fact that on Aug 18, the SNB already did an intervention by increasing sight deposits. This was, of course, highly ineffective and led to the subsequent verbal intervention with the 1.20 peg on Sep 6 (your 9/9 date is incorrect)

"With immediate effect, it aims to expand banks’ sight deposits at the SNB further, from CHF 120 billion to CHF 200 billion. In order to achieve this new target level as quickly as possible, it will continue to repurchase outstanding SNB Bills and to employ foreign exchange swaps. Furthermore, the SNB reiterates that it will, if necessary, take further measures against the strength of the Swiss franc."

Mr Lennon Hendrix's picture

Bruce, face it, Ka$hya (Cash, yeah?) is smarter than all of us.

Rainman's picture

yup.....and we the common peeps marry the cashier girl at the supermarket. No wonder we is 99%ers.

AldousHuxley's picture

you don't have to be smart when you are married to a central bankster.

billwilson's picture

Really??????  That's it???? 


At the time the Swiss Franc was ridicuoulsy mispriced. Even I thought of shorting it (and I don't trade currencies). It was a no brainer. Even my frien's mother who gets a Swiss pension overseas was checking the mail every day for her check, so she could run to the bank and convert it while it was still high. Any sane person knew the situation could not last. It was about to destroy the Swiss economy.


She got lucky. Her purchase was well before the intervention, and well before any decision on intervention was probably considered.


This is a mountain out of a molehill story. Surely there are some real stories out there.

if's picture

If the Swiss Franc was "ridiculously mispriced" why would the SNB need to intervene with a peg ?

I'm a regular on this trade and you don't hold it for 50 days against the trend unless you know something.  At any of the other ridiculously cheap points you would have gotten killed as the Franc steadily appreciated over the past few years.

Transparency International needs to adjust their Corruption Perceptions Index for Switzerland to reflect the high moral character at the SNB ;-).  





Ghordius's picture

"If the Swiss Franc was "ridiculously mispriced" why would the SNB need to intervene with a peg?"

well, if people and newspapers who have never mentioned FX for decades suddently are quite agitated and talk all the time how the tourism and B2B industries are going down the drain, then you do know that there is political pressure mounting

several comments above seem to be completely oblivious of the interconnectedness of the Swiss economy with the EUR economies... you just need to know that nowadays when a Swiss manufacturer offers you let's say a turbine, you get the EUR price quoted since the main price calculation has to be done in EUR

by the way, it's not a peg, it's a floor - and she did not short, she just exchanged CHF to USD, an amount that does quite fit the FX needs of an art gallery and is below any thresholds of the crimes of our days - but as my journalist friends explain to me, if you have a scandal involving thousands of dollars and one involving billions, the readers actually get inflamed about the first one - only there they can connect and understand the sums involved

Freebird's picture

Picking you up on this. She did not just exchange chf to usd whatsoever. She entered a forward contract & as BK mentions unless she was hedging an art purchase this was a trade - pure & simple

Urban Redneck's picture

Because the primitive joke of an FX Market in Switzerland is incapable of meeting the foreign currency needs of a lowly art gallery in real time... Unless there is some sort of art gallery transaction paperwork (tied to an existing physical piece of art) around the same date and for a similar dollar amount to the FX conversion (that woud apear to have been done with personal as opposed to corporate funds), she was speculating and more importantly- she has now blatantly and publically lied about her actions in a transaction that was already deemed suspicous enough by the SNB to warrant further review.  In this case the cover-up is probably worse than the crime, but the dead weight of scandal needs to be thrown overboard, and those two need to be thrown under the train, before the vultures sense weakness on the part of SNB and the SNB is forced to either move the printing to ludicrous speed or scale back/cancel the Euro purchases in what appears to be a massive and humiliating capitulation.    

Ghordius's picture

I'd laugh if this would not be a crying matter...

look, the SNB is reviewing because the gov got into it, and this because this bank employee went to the police and the SVP party with it.

I agree that covering up is worse - but please, her husband makes a million swissies a year and she made 50k (correction, it seems it was a short and she made 83k - more damning because it was a short) from the deal

In doubt, I prefer to maintain the stance that she is an independent entrepreneur that should not be screened for every transaction she does

the real game is that the SVP party leaders would like to remove Hildebrand - and this is political interference in monetary policy, something we European Liberals (not to be confused with the US party at all) are fighting since 1848 to avoid

UR, you were writing that you are from time to time in Switzerland, are you sure you understand the political conflict there?

by the way, the floor is holding for the moment, and re: "humiliating capitulation" it's not about face loss, it's about commerce, another reason why politicians should not be allowed near any Central Bank (except in the case where they want to abolish them and go back to gold, but this is sf as long as major players have fiat)

a good central banker (I know, I know) should not be concerned about "humiliating face losses", only about the stability of the economy. If the floor fails, it fails - it was the right decision at that time

Urban Redneck's picture

I live in Zurich, and among other things I derive income from goods manufactured in Germany and exported abroad, so I "benefit" from the CHFEUR floor, even if I find it distasteful.  My concern is that having the appearance of an "imparied" SNB chief telepgraphs weakness and possibility of the end of the policy if/when Hildebrand is finally pushed out because he couldn't quell the scandal at the outset- which greenlights more long speculation on CHF with ever cheaper foreign fiat and all the destabilization that this causes both domestically and in Europe genrally, so it is better to get rid of Hildbrand now, and bring in someone "untainted" to advance SNB policy.  As far the SVP goes, I generally view them as just as overspending and pro-big government as the other major Swiss parties, albeit with some slightly different spending allocation priorities.  The SVP immigration policy actually doesn't bother me that much since I came from the US (i.e. no easy Schengen all access card) - so why shouldn't the Greeks or Germans have to overcome the same obstacles I did? (And no, I did not chose lump sum taxation - since I view it as unethical.)   I also don't think there is any Central Bank in the world that is remotely independent from the government it ostensibly serves, so the indepence of monetary policy is largely a facade, albeit not to the same extent in Switzerland as the US, where they developed the habbit of first pumping and printing money (or least not tightening the supply) whenever there was an election, and that process has now denigrated to the FED providing contiinuous fiat life-support to the political and banking/business establishment.  Switzerland is also one of the very few places, outside of China, where the Central Bank can acquire additional significant real and realive gold reserves quickly and quietly, as a plan B contingency.  I am not sure if the SVP-Hildebrand beef is more hubris or idealogical, but I suspect that if the SNB was properly preparing for all contingencies that the SVP would be less confrontational especially since they are pushing for the reintroduction of Swiss bullion coinage.  Regardless, I don't think that it was necessarily anyone's intent that this become a public storm, but I have not read all the Swiss banking law and pursuant regulations, since I don't work on the bank side anymore.  However, exactly what the former Sarasin banker told his lawyer, and what the lawyer told his client, would go a long way towards uncovering a needless "truth" because once the bank customer data is outside the bank and the first law is allegedly broken, then the filing of counter criminal charges with the police becomes an obligatory defense mechansim, and everything "truth" becomes very murky, very quickly.   Hopefully someone will write a competent legal analysis of the developments in the near future.   

Ghordius's picture

ehehe, "distasteful", yes, but all fiat is (for the purist), and that's the game of the town, and I'm very pleased that you realize your "need/value" in the floor

the SNB is not completely apolitical, look up who the owners are, it's the KantonalBanken, which are mostly owned by the Cantons/States of the Confederation

the SVP cannot use/change this broad consensus there because they have a different regional composition, that's their main problem

the SVP leadership main beef with the SNB is that they want them to be very accomodating in the issue of the gold coinage

yes, the Swiss prepare for all sort of contingencies - let's hope they did their homework properly

regarding Swiss Parties and overspending, please note that in the arch/sum of seven rolling years by law the federal budgets have to balance

Urban Redneck's picture

A simpler way of restating that would be: The job of SNB is more important to the Confederation than the career aspirations of Philipp Hildebrand.  It is the job of the Board of Directors to protect the integrity of the institution.  If the board keeps Hildebrand at the helm, then the board is stacked with his sycophants, and more power to anyone who wants to clean house, at least it will require a consensus of the major parties to approve their replacements. 

AldousHuxley's picture

Not only that but the whistleblower was fired for reporting insider trade.


but then there is no integrity of swiss banking secrecy laws to protect money of dictators and drug lords.


You bet North Korean Kim Jong Il banks in Switzerland Kim Jong Un was educated there.


Swiss don't give a shit....they only like money.

malek's picture

Repost from the "I love a good stink" comment thread:

Read http://www.businessweek.com/news/2012-01-04/hildebrand-to-break-silence-...

and then ask yourself:
Doesn't that all sound so wonderful innocent, Kashya on her own just had a good feel for currency valuations?

She seems to be a very intelligent person, that Kashya, you know. And then she has no fucking clue her husband is influencing said exchange rates himself, so even if she really got no insider information from him, it would look really bad to trade in CHF related FX?? At the least she is clearly lacking any moral bearings.