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"It's Carnage" - Swiss Franc Soars Most Ever After SNB Abandons EURCHF Floor; Macro Hedge Funds Crushed
"As if millions of macro hedge funds suddenly cried out in terror and were suddenly silenced"
Over two decades ago, George Soros took on the Bank of England, and won. Just before lunch local time, the Swiss National Bank took on virtually every single macro hedge fund, the vast majority of which were short the Swiss Franc and crushed them, when it announced, first, that it would go further into NIRP, pushing its interest rate on deposit balances even more negative from -0.25% to -0.75%, a move which in itself would have been unprecedented and, second, announcing that the 1.20 EURCHF floor it had instituted in September 2011, the day gold hit its all time nominal high, was no more.
What happened next was truly shock and awe as algo after algo saw their EURCHF 1.1999 stops hit, and moments thereafter the EURCHF pair crashed to less then 0.75, margining out virtually every single long EURCHF position, before finally rebounding to a level just above 1.00, which is where it was trading just before the SNB instituted the currency floor over three years ago.
Visually:
The SNB press release:
Swiss National Bank discontinues minimum exchange rate and lowers interest rate to –0.75%
Target range moved further into negative territory
The Swiss National Bank (SNB) is discontinuing the minimum exchange rate of CHF 1.20 per euro. At the same time, it is lowering the interest rate on sight deposit account balances that exceed a given exemption threshold by 0.5 percentage points, to ?0.75%. It is moving the target range for the three-month Libor further into negative territory, to between –1.25% and -0.25%, from the current range of between -0.75% and 0.25%.
The minimum exchange rate was introduced during a period of exceptional overvaluation of the Swiss franc and an extremely high level of uncertainty on the financial markets. This exceptional and temporary measure protected the Swiss economy from serious harm. While the Swiss franc is still high, the overvaluation has decreased as a whole since the introduction of the minimum exchange rate. The economy was able to take advantage of this phase to adjust to the new situation.
Recently, divergences between the monetary policies of the major currency areas have increased significantly – a trend that is likely to become even more pronounced. The euro has depreciated considerably against the US dollar and this, in turn, has caused the Swiss franc to weaken against the US dollar. In these circumstances, the SNB concluded that enforcing and maintaining the minimum exchange rate for the Swiss franc against the euro is no longer justified.
The SNB is lowering interest rates significantly to ensure that the discontinuation of the minimum exchange rate does not lead to an inappropriate tightening of monetary conditions. The SNB will continue to take account of the exchange rate situation in formulating its monetary policy in future. If necessary, it will therefore remain active in the foreign exchange market to influence monetary conditions.
The resultant move across all currency pairs has seen the EUR and USD sliding, the USDJPY crashing, and US futures tumbling even as European stocks plunged only to kneejerk higher as markets are in clear turmoil and nobody knows just what is going on right now.
In other asset classes, Treasury yields, understandably plunged across the entire world, and the entire Swiss bond curve left of the 10 Year is now negative, with the On The Run itself threatening to go negative soon as can be seen on the table below:
All Swiss government bill and bond yields out to 7 years are negative: pic.twitter.com/b4YCVSDFu7
— Jamie McGeever (@ReutersJamie) January 15, 2015
Crude and other commodities, except gold, are also tumbling, as are most risk assets over concerns what today's epic margin call will mean when the closing bell arrives.
An immediate, and amusing, soundbite came from the CEO of Swatch Nick Hayek who said that "words fail me" at the SNB action: "Today's SNB action is a tsunami for the export industry and for tourism, and finally for the entire country." More from Reuters:
Swatch Group UHR.VX Chief Executive Nick Hayek called the Swiss National Bank's decision to discontinue the minimum exchange rate on the Swiss franc a "tsunami" for the Alpine country and its economy.
"Words fail me! Jordan is not only the name of the SNB president, but also of a river… and today's SNB action is a tsunami; for the export industry and for tourism, and finally for the entire country," Hayek said in an emailed statement on Thursday.
Swiss watchmakers, which are also grappling with weak demand in Asia, are very exposed to moves in the Swiss franc exchange rate because their production costs are largely in Swiss francs, but most of their sales are done abroad.
Shares in Swatch Group fell 15 percent at 1056 GMT, while Richemont CFR.VX was down 14 percent, underperforming a 9 percent drop in the Swiss market index .SSMI following the SNB's announcement.
"Absolutely shocking ... For companies with international operations – translated earnings are going to be lower and if companies make products in Switzerland it is going to hurt margin. It is a terrible day for corporate Switzerland," Kepler Cheuvreux analyst Jon Cox said
Indeed, in retrospect, it does seem foolhardy that the SNB, whose balance sheet ballooned to record proportions just to defends it currency for over three years would give up so easily. The one silver lining, so to say, is that gold prices in CHF just crashed by some 13%.
Some more soundbites from strategists, none of whom foresaw this stunning move:
ALEXANDRE BARADEZ, CHIEF MARKET ANALYST AT IG FRANCE
"This is extremely violent and totally unexpected, the central bank didn't prepare the market for it. It's sparking panic across all asset classes. It suddenly revives the risk of central bank policy mistakes, right when central bank action is what's keeping equity markets going."
LEX VAN DAM, HAMPSTEAD CAPITAL LLP HEDGE FUND MANAGER:
"Major losses in euro-franc trades are causing panic selling and deleveraging across the board."
CHRIS BEAUCHAMP, MARKET ANALYST AT IG
"My initial reaction was that it is a sign the ECB is about to do something, which makes it odd that the reaction has been so negative across European stocks. However, it's not every day that a central bank pulls the rug out from underneath something in such a massive way, and clearly people are worried that there's something bigger afoot. This kind of event is the kind of thing that will trigger volatility. This is not a one day thing now."
DARREN COURTNEY-COOK, HEAD OF TRADING AT CENTRAL MARKETS INVESTMENT MANAGEMENT
"They’ve stopped defending the 1.20 floor. It’s carnage."
PATRICK JACQ, RATE STRATEGIST, BNP PARIBAS, PARIS
"The decision of the SNB means it no longer needs to buy euro-denominated paper in order to defend the 1.20 position. This should normally weigh on European debt but the SNB also said they will continue to monitor in order to prevent the exchange rate from rising substantially.
"This means that at the end of the day even if they don't defend the 1.20 level, if they want to prevent a collapse of the euro versus the Swiss franc they will probably have to keep on buying, maybe at a lesser extent, euro denominated paper."
JONATHAN WEBB, HEAD OF FX STRATEGY AT JEFFERIES, LONDON
"It has taken the market by complete surprise. The SNB probably expects the ECB to launch QE next week and along with the Greek elections coming up, it would make it pretty tough on the Swiss to keep bidding the euro.
So they have abandoned the cap and cut rates deeper into negative territory. We expect euro/Swiss to trade around 0.90-1.00 francs after all the stop loss orders have been cleared"
GEOFFREY YU, CURRENCY STRATEGIST AT UBS IN LONDON:
"They think too much money is going to come in, especially with QE coming, and so they think they need a 'Plan B'."
"Let it run, let it settle, and we'll see what happens next."
However, the best soundbites today will surely come from US hedge funds which are just waking up to the biggest FX shocker in years, and of course, any retail investors who may have been long the EURCHF, and who are not only facing epic margin calls, but are unable to cover their positions, as one after another retail FX brokerage has commenced "Rubling" the Swissy and the CHF pair is suddenly not available for trading for retail accounts.
To say that today will be interesting, is an understatement.
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lol
Awesome. How many of you shitheads on here just lost your bonus because of this? No new Porsche for you this year.
Bitchezzzzz
I'm off to the Ivory Club to stir the pot.
Gold liftoff!
Switchy Swissy
Today's trading is going to be one bitch-ass-shit-tard-butt-fuck-ass-rape hell of a day.
Interns be doin' some ovahtime!
I was watching gold lift-off wondering WTF just happened? Stuff like this happens only once in a blue moon. About time the SNB dumps the EUR, just in time for Draghi-QE.
This is every hedge fund manager in the world today:
https://www.youtube.com/watch?v=hR1gl2lG2Ak
Why did they do this and why now?
This is the question.
If the EUR tanks due to QE or the Greeks, then now due to the pair -- the CHF would skyrocket until the SNB came to the rescue and started buying a shitton of EUR and EUR assets with CHFs. Thus, seems likely that they are anticipating a collapse in EUR value to such an extent that the SNB would not be able to keep up, so they decoupled early.
My guess is the QE + the Greek problem forced the SNB's hand as they definitely didn't want to do this.
Damn good point!
Or, the inverse of the equation would be the SNB is expecting an appreciation of the CHF to such an extent that it could not purchase assets fast enough to hold the peg.
As I sit back and think about this -- I think this would be the scarier option as it has the EUR surviving, but the CHF appreciating at a materially faster rate than the EUR. (E.g., another currency somewhere else in the world ora basket thereof goes to hell and quickly).
The more I "war game" this, the next few weeks will show us why they did this. They got a heads up from someone, and decided this is the best thing to do. I would imagine they have delayed this until the last possible moment.
OR...maybe Tina Turner just decided to make a large investment in a shiny yellow metal..?
"It's Carnage"
Hot damm......now we're talking.
Can we fix echange rates once and forever? So cheese makers can make cheese...
Sell, Mortimer, sell!!!
FXF still is in my portfolio, knowing this day was coming.
Does any of this really matter. I mean I got my Gold. Life in the Rockies is perfect now. If they don't fuck with my porn I should be good
Call Amanda Lang.
I think you have to be RBC for her to pick that phone up.
Looks like somebody's central bank doesn't have a mandate for price stability.
As a matter of FACTA, there’s nothing much special about Switzerland anymore, except cheese with big holes.
Gut reaction tells me this not nothing, or in other words, something important is going on. The EUR peg was a clinging to normalcy, an effort to continue the good times that have been threatened off and on since 2001 and especially 2008. Letting this peg go signals that manipulative forces are no longer strong enough to maintain structures of the past. Very doubtful, IMO, that the other forced clinging to economic structures will continue to stand in the coming months.
Not exactly.... the elite have always used the Swiss banks as a place for fiat.....they have to re establish the safety of the franc before they move/park their trillions in the swiss banks......now DONE
Interesting idea. But can the CHF maintain its "safety" position while Swiss industries lose competitiveness? Will the Swiss become protectionist to prevent imports from wiping out Swiss business? Some kind of interesting rebalance will be required.
Swiss stock market down 10% today so far! Self-inflicted. They must have a good reason.
yeah like maybe-cut the cancer out early? or "pay me now or...pay me later"?
someone has been loading up on derivatives pre-announment--good luck finding out the direct link to GS
The SNB could have bought Euros until the end of time in order to remain the peg at 1.20. As long as the SNB trusted Germany and France that they pay interest and principal on their bonds. At about 500 billion Euros this trust ended.
So they lost 15% on German and France goverment bonds today. And feared they could even loose much more if they continued "stacking" Euro(bonds). There is going to be a debt jubilee. Don't ask me when because I don't know when.
Can't wait to hear Yen Cross' take on this.
lulz, I've acquired a stalker downvoter!
Some butthurt Zioshill, I expect...
The following exposé explains the real background as to both the timing, and the true causes, of the coming collapse.
2015: The Great Tribulation Of The 3rd Millennium Foreshadowed By The Shemitah Jubilee
ABSOLUTELY A MUST READ !
This time it was SNB who made a muppet of everyone.
Goldman's Stolper can just turn green with envy.
i wonder what would have happenned if the SNB dropped the peg and RAISED rates instead
seems to me the bolder move. i mean, fold, sure, but fold in a manner that calls other assholes bluff, y'know?
Gee, and I thought it was the toast that was burning this morning....
In other words, close the borders and kill every single industry in your country that relies on selling anything in foreign markets.
You would need to have a good internal police force.
Why don't the Swiss exporters just lower their prices, and lower their wages, in order to retain market share and maintain profitability in the face of the strong franc? Better than going broke with empty order books, surely.
"They didn't build that carnage."
That is the fucking funniest comment I've read in a long time. I loved "Trading Places."
yer, the dude in the gorilla suit getting thrown in the cage with the real gorilla. hilarious.
kinda like bitcoin investors today.
sorry. hadta
Right now Draghi has someone by the throat and that someone keeps saying (in a raspy voice), "It was the Swiss. It was the Swiss...."
Will we now be treated to a spate of ZH articles decrying the loss of jobs in the watch-making industry?
Who needs a $5000 watch.....when you can pick one up at 7-11 for $3.50?
The .1%
>The .1%
Seriously? $5K wont even get you a Sub.
Coming to a subway near you.
$3.50 for a watch? What did you get a Christmas bonus? Don't rub it in and brag like you do.
this might be important or not?
"U.S. pension regulators questioned Thursday whether criminal violations in one unit of Credit Suisse Group AG reflect broader compliance problems at the Swiss bank, in an unusual public hearing to vet its request to continue managing retirement plans."
Negative rates out to 7 years....fiat, good way to feed the fireplace
Exactly...my money is so worthless, I have to PAY to give it away.
Better to get all the blood letting over with at once since the Chinese have stopped buying expensive watches for the time being.
The Chinese are 99.9% preoccupied with getting their kids into a USA school, wb. Too busy to spend time looking over those Rolexes [or is it "Rolices?"]
The Chinese are 99.9% preoccupied with getting their kids into a USA school,
Why?
The pinnacle of fucked up is the pinnacle ..........no , please why?
its ON bitchez !!
There will be no QE for the EU... Not unless they want Germany to exit the EU faster than you can say boo... So IMHO, the SNB has decoupled from the Euro to keep from being drug down with it when it dies...
Keyser, the best thing for the EU would be for Germany to exit but that would
then make their cars et al more expensive to export to Europe.
What would happen to the cost of raw materials and energy if the DM comes back or a NEURO comes into existance?
(It would fall through the floor)
Whatever happens, Draghi's ass is on the line now. That what he gets for selling his soul.
http://www.swissinfo.ch/eng/bloomberg/central-banks-show-power-to-shock-...
Great link, thank you.
Germany will announce tomorrow. It's inevitable. Euro is dead meat.
Not to worry about the price of exports if Germany exits the EU, because if it does, the EU dies... Pure and simple...
Right. Gemany cannot exit the EU. It can call it off - but not exit. The EU would vanish almost instantaneously as the fist when the hand opens.
Is that the first Korn album cover?
Nope. A selfie. Pure coincidence.
Shaka, when the walls fell.
I think the Swiss just started the ball rolling. Next: Germany and France, the sooner the better (less destructive). GET OUT OF THAT EURO MESS.
Germany needs Greece to keep their 0.1% happy with cheaper exports. Of course, with Atlas Shrugging and straining to take a dump, the Greek Grunts have tossed out the anchor on taxes. Full scale revolt, I read.
Just as the Swiss had to bite the bullet with the decouple from the Euro, so will the EU eventually tell Greece to fuck off , and maybe another PIIGS or two. I'm amazed they've hung on to Greece this long. In fact, I'm amazed the EU sheeple have ceded their sovereignties so willingly and shocked that the tent hasn't already blown over. Tenacity is the name of their game for sure. I've been wrong all along.
I have no doubt that once the 2nd std deviation panic crowd settles down, gold will be attacked again. We can take that to the mine.
And then Putin asks for his natural gas to be paid for in either GOLD or RUBLES.
... cue cold hard european bread lines...
funny how this theory persists. have a look at the trade balances between the EU and Russia. then have a look at how Russia is still courting the EU countries about trade, and even trade unions/alliances
we are talking about two partners in trade, here. despite the "embargo", which is very limited
Russia is not going to kick it's main customers in the nuts. Even that "gas through Ukraine stop" - problems might arise in Romania and Bulgaria, not the northern EU countries
face it, the EU is still more important to Russia then Russia to the EU, and the EUR is still the preferred currency between the two, and Russia imports lots of stuff from the EU. needs it
all that Russia really wants is for Uncle Sam to go away. and to take his USD with him, and, if you go down the Russian wish-list, for the EU countries to leave NATO
<<<Russia is not going to kick it's main customers in the nuts. Even that "gas through Ukraine stop" - problems might arise in Romania and Bulgaria, not the northern EU countries>>>
Ghordo, explain to me why the Russians would feel they could steamroll over everyone in the EU except those in the North?
are you hinting at a North/South divide? sorry, it's a bit more complex then that. Russia has a very complex relationship with all it's former satellites, from the Balts to Poland to an even more complex one with Hungary, Romania and Bulgaria
sometimes I have the impression - might be wrong - that for you "the South" equates to "Mexico for the US". as often, I'd wish you for knowing all those countries a bit better, and refrain from "fantasy map" strategizing à la "History Channel" rehash of WWII
Bulgaria has an even more complex relationship to Transsinistria, and the whole Novorussyia concept. A very underrated country, that one, except by the Russians
No -- my view of the South of Europe is not "the Mexico" of Europe.
My view of the South of Europe is millions of people, who in their eyes are "hard workers" -- but due to climate and thousands of years of history that has centered around a 10 month growing season they look at "productivity" and "money" differently than the northern countries do.
Often I have the impression - I might be wrong -- for you "Europeans" are one people, for no other reason than geography.
European Peoples, plural. Particularly in Germany, which is a federation, it's Peoples. Bavarians, Hessians, Saxons, etc. We Europeans are very tribal. And if you don't understand our tribalism, you won't understand us. And my impression is that you have not understood our tribalism, and how it effects our thinking and our poltics
I understand the tribalism -- perhaps better than you do.
I think, because, of the tribalism the EMZ won't work. You think, despite said tribalism, the EMZ will work.
you had recently an American education, which goes in the opposite direction. only because you oppose that direction (something I can well understand), does not mean you understand the other one
I'll make a simple explanation: whenever you talk about German politics, or Northern European countries, you talk as if the differences were negligible. For a Frankfurter it's generally easier to get along a Parisian then a Bavarian or, heaven forbid, with someone from Mainz. Similarly, Germans can generally cooperate better with Italians then with Swedes or, heaven forbid, with Danes
a lot of this EU "stuff" happens by having distant cousins agreeing on things instead of near brothers that can't stand each other's voice and tone
(I happen to be very conscious of this stuff because I belong to a tiny minority that always had to be very conscious about those things)
even simpler: being a smallish tribe, particularly in a smallish country (and to an extent this applies to German federated states, too), makes you... conscious of the need for alliances
Needing alliances =/= sharing a currency.
Although I hate the EU -- I am not ranting about the EU but the EMZ.
You make excellent points, and you made an excellent point for the nations for talking with eachother only when they have to and on holidays.
You failed to address whey these countries should share a currency.
why? I tought I wrote that often. August 15th, 1971 and the then forecasted currency wars. the terrier shaking the rats to death. like the Ruble, recently
look at the old national currencies as slumbering peacefully in the EUR bunker. it's not yet time for them to reawaken. the return leg hasn't started, yet
How often was the DM shaken like a rat?
In the 60 year lifespan of the DM -- it happened -- once. Even when there was the Unification no one did it because of good monetary policy. It happened all the time to the PIIGS. But why should the Germans pay (thus give up QOL) to keep the FX markets from gang raping the PIIGS central banks?
not often, but often enough for the currency grids to be a feature in German politic thinking. and why should Germany be happy to see the "markets" "gangraping" excellent customers and trade partners? at the end, it always comes to that: does Germany want to be alone or exposed with the wrong partners?
your "happy-go-lucky" "let's have a German-Russian Axis against..." is a perfect example of the thing, it would immediately sour German relations to Poland, France, Italy, Austria, Denmark, etc....
Germany does not want to be exposed in any "cowboy way" ever again. Call it the thoughtful, careful middle of the continent. Mama Germany, not "Ze Fatherland! Jawohl!"
Quit putting words in my mouth.
Being happy to watch FX's gangrape the French =/= not wanting to pay for them. Moreover, these nations (especially the Spanish and the Greeks) purchased materially MORE under the DM than today. If you factor our accumulated debt -- this trend started in 2000 (e.g., organic capital stemming from Spain -- not Spanish borrowing money from within the country or from abroad to finance their purchases). Italy and France purchased more under the DM than they do today, but not by much. Both within the margin of error. Again however, if you remove inorganic debt based purchases -- things go south for the Italians and French in 2003 and 2005, respectivly. They were excellent customers, but haven't been for about a decade now.
My idea of a "happy-go-lucky idea" Russian-German axis is again, something I have *never* said. I have advocated over and over and over again for a NEURO. Not a NEURO+Russia, not a NEURO with just Germany, a NEURO with the Germans, Austrians, Fins and Dutch. I am sure the Danes and Swedes would follow suit, and believe it or not -- the Polish and the Czechs could come into the fold based off of national savings rates, consumption per consumer vs average income, etc., etc., Talk about a stick in Russia's eye, would be bringing Poland even closter into the German fold, but as I explained to you earlier this week -- the Polish aren't interested in coming any closer to the EU by adopting the EUR because they would start paying out as a creditor country almost immediately. Same goes for the Czechs, Danes and Swedes. But you know all this. You habitually deny this to be true, for no other reason than it offends your "happy-go-lucky" all Europeans are best friends and can do everything together forever, because EVERYTHING IS AWESOME!!!!! EVERYTHING IS COOL WHEN YOU'RE PART OF A TEAM!!!! ( https://www.youtube.com/watch?v=StTqXEQ2l-Y ) type of world-view.
Fuck you junkers. Reply and comment or gas yourself.
Ignore them pal. Most of the vets on ZH get it and know what this news means. As Bruce Krasting said today, "We’ve just taken a huge leap into chaos. The linchpin of the capital markets has been the trust in the CBs. The market’s anchors have now been tossed overboard."
GOLD Bitchez?
Strategic policy and sovereign decisions are the business of every Sovereign. They are made with respect to the best interests and also the best survival potentials for every state. Merkel said at the recent G20, that the EU partners believe EU arrangements and values are the difference between war and peace.
i.e. IT'S A STRATEGIC CHOICE
Its also about the gas pipes, the north of the EU gets it via NorthStream and the south via Ukraine.
The way things are going, no advance payment from Kiev for Jan gas, it looks like they are going to have to steal the EU's gas to survive the winter.
That is what will cause the shortage in the south and a huge EU?Ukraine argument.
"Bulgaria has an even more complex relationship to Transsinistria, and the whole Novorussyia concept. A very underrated country, that one, except by the Russians"
I only know one thing about Bulgaria. It's an old Russian joke: "If you see a Bulgarian in the street, beat him. He will know the reason why."
That one cracks me up every time.
If Germany exits the EU, it will join the BRICS / Eurasian Customs Union... Excuse the expression, but Merkel doesn't have the balls... She will have to be ousted before this happens... With the way Germans is leaning anti-islamic and considering Merkel embraces them, this move could be sooner than we think... Again, all just wild speculation on my part...
Majority of Germans are afraid of being labeled "Nazis" and have the same opinion as Merkel. She holds the majority in that sense. What will get Merkel ousted is when teh economy collapses due to a mass currency crisis. The SPD will see its chance, and go for the neck.
The wild card is the AfD which will be the only political party which would get a TON of votes when this happens.
http://www.independent.co.uk/news/world/europe/paris-march-tv-wide-shots...
that's not the majority of Germans. that's a small minority of Germans. and this is a fact that can be checked on
further, "With the way Germans is leaning anti-islamic..." - utter crap. What is making the news is the city of Dresden, which is leaning hard on the right since a while
bloomberg is hard at work building up a case of "whole Germany leaning anti-islamic" which is utter bogus, and neglects the facts around the Turkish populations in Germany
You think the minority of Germans agree with Merkel in tolerance for Islam?
"Majority of Germans are afraid of being labeled "Nazis"..." wrong. Majority of Germans agreeing with Merkel regarding tolerance for Islam, correct
note the word: tolerance. Does not mean "liking it" or "pandering to it"
ahhh, semantics misunderstand there.
You hit the nail on the head, and there is a material difference between being tolerant of something and "pandering to it" -- something we in the US have yet to grasp. Also, Bündis 90/die Grünen also fail to see the difference.
I would also say a German's biggest fear in a political discussion is saying something and being labeled a Nazi. In that sense I do believe you are correct.
I'm stuck on his assertion that the majority of Germans are pro-islamic... Germans are not stupid and see what the numpties from Brussels have done to Europe... That's right, Europe, not the EU... Mass immigration and the lack of tolerance or assimilation by the emigrants, i.e. muslims, is coming to a head in the EU, or has Ghordius not been watching the news lately...
I think the majority of Germans (living here and dating/almost engaged to one)
1) Welcome migrants that assimilate.
2) Tolerate/pander to migrants that fail to assimilate. Those that tolerate them (those that fail to assimilate) would rather have them go home, but can never say such a thing outside of family or close friends. Else, you are labeled all sorts of right wing names, and many write off your opinion as stupid/racist/Nazi, etc., etc., There are a few dillusional people here that believe in GhordoS' "Its a Small World After All" view of humanity. They are the minority, but they are excessivly loud and run 2 parties (die Grünen und die Linke), and have strong congress' in another 2 (SPD and the Union).
There is a smaller minority of Germans (I'd say less than 2%) that want to pack up and send all brown people back to where they came from. There is even a smaller minority that want to deport all foreigners, but we are talking about fractions of a percent.
It takes all types I suppose.
a majority of Germans are very tolerant of the Turk population in Germany. which happens to be mostly very moderate, in it's religion
being tolerant is not the same as being pro-Islamic, or pandering to extreme fundamentalist
And in general, Germans know that the Turks were allowed in before the EU was even founded
GF's family is from Berlin -- well for quite a long time. Her older sister told me she went to a friend's apartment in Kreuzberg 15 years or so ago. They were on the balcony, and there was a goat tied to a tree in the Hof. A guy came out of his house, and slit the goat's throat right there in the Hof and walked off -- letting it bleed out before picking it back up a few minutes later. They called the Police, but the Police told them that is pretty common and they should be more "tolerant" of other cultures.
In many ways the Turkish population here is much more "western" than the North Africans in France -- however, there are some very non-western traits that are unacceptable in our society. Germans, or anyone else for that matter should feel free to call out people for doing stuff our culture looks at is wrong, that their cultures looks at as correct -- when "they" live in "our" culture. Right now I don't think the state of political correctness in the West provides for such freedom. This is what I am talking about.
Gee ghordo I wounder when Islamic countries are going to be tolerant of religious minorities in their countries? Why import people who have no concept of tolerance yet demand everyone be tolerant of them in their adopted land?
note the word: tolerance. Does not mean "liking it" or "pandering to it"
Bullshit - in this context and given recent events, it means precisely that.....
the 'embargo' is not limited, it is savage and extensive. and that was before the drop in oil. russia will give europe a very cold shoulder for an extended period of time, until europe comes back to the trading table honestly and without uncle sams imperatives
i respect your analysis, Ghordius. but the trade balances need to be kept in the perspective of national debt ratios, of which russia has a clean shirt and the EU looks like that guy who fell through the toilet seat in slumdog millionaire
"... all that Russia really wants is for Uncle Sam to go away. and to take his USD with him, and, if you go down the Russian wish-list, for the EU countries to leave NATO ..."
Not going to happen though, the best that will occur is EU develops an independent spine and puts the US on the back burner and asks it for occupy a less objectionable role in EU policy.
i.e. far fewer US bases (get rid of all US nukes out of Europe for a start and then Brits and French act as backstop, with the US as the back-backstop), and far more EU bases to go with that, as clearly the EU will have to stand up to Russia and resist all forms of coercion or aggression. So the EU MUST play a two-way strategic bet, while developing trade (and at least the beginnings of a cultural understanding) with Russia and central Asia.
The Americans will not freakout, because if they are serious about their own defense then they had better accommodate some serious changes, that will work much better from here, or Europeans will eventually demand they leave, due to becoming a bigger downside threat, than an upside security improvement.
And the Eastern European States will HATE that, unless the big EU states get actually serious about replacing the Americans with sufficient EU force levels and readiness.
Getting the Americans (mostly) out has always been too hard, but this must change or we all go back to cold war arsenals facing off.
FUCK THAT!~
Guess what? The old Eurocrats get their long-term dreams come true.
I was agreeing with you until you said "EU bases."
Could you define what you mean by "EU bases" please?
That won't happen as it would mean that the Europeans would have to actually start paying for a functional military. Ever since the end of the cold war, most of the EU countries have been reaping a big bonus for not having to pay for their own military and relying on the US for their security.
For the US, having the EU actually commit to and follow through on military improvements and getting back to creating their military forces would be good financially, but bad for their ability to influence the EU.
possibly. yet last year, the eurozone spend twice the Russian military budget and the EU spent three times it. if paying alone would "be it"...
the US military budget can't compare. literally. to nothing. it equates the whole rest of the world. that's why Dr. Krugman conjures a Martian Invation
The US prints the money that the entire world uses. Europeans recognize this, and undoubtedly have figured out that its smart to let the people who print that money pay for the defense of ALL the people who use that printed money.
Why on earth would Europe pay for its own defense under those circumstances? The situation won't change until the USD is no longer used as the world's money.
Not that simple, Ghodius pointed out the EU is spending far more on defense than Russia. Though it does have to budget for MENA as well. It's the US that's the odd one out here, insisting on rediculous levels of weaponry. The blaming others for not going all in for weapons as well. Weapons, and waving them around a lot creates tensions and then arms-races. I can't imagine why the biggest arms merchant in the world would wants that to happen.
.
A false flag. SNB has been under severe critique for its money printing. In order to get the politicians to beg for it, kneelingly, SNB had to demonstrate what would happen if it let go. SNB will continue printing no matter what. It had to erase the predictability of its idiotic policy, though.
You are misusing the term "false flag". But the rest of what you say makes sense. The SNB is doing a "crazy Ivan".
You are right. Apologies.
Yesterday's European Court of Justice advisor saying that OMT falls within the mandate of the ECB could have given the last straw on the Swiss camels back. This means the ECB will print trillions. So they pulled the plug (last chance before Draghi and Greece).
I'll hazard a guess, there. It won't be the ECB. Not directly. Indirectly, through the national banks of the EuroSystem, the so called NCBs
I expect, if my guess is right, that we will talk a lot about the Banque of France, the BankItalia, the Belgian National Bank (cue in "mistery buyers" of old rumours), etc. etc.
This needs a soundtrack. https://www.youtube.com/watch?v=l8YjVw_2Lok
Perhaps it has something to do with this as well:
Breaking news: Russia will completely stop the delivery of gaz through the UkraineSurprised ZH hasn't picked up on this yet. Things are heating up; as D. Orlov said, this is a "go to hell" moment.
Zerohedge had an article on it last night.
That's perfect music for a Jason Bourne movie... right before he sets up down the road from the Swiss central bank offices.
Keep up, that's yesterdays news and it is 5 years away.
:-(
I read this, Yesterday's ruling on Eur QE would lead to longer problems to continue peg. Get out of peg now, later would be worse. This will relieve some pressures, on west a bit short term. I think if a few larger economies drop dollar peg now, could toast the dollar.
We've seen another chess move now...
Euro QE AND prep for WWW III flight to safety.
Swiss are considered "neutral".
Fact is, paying 75 basis points to hold money in a strengthening Franc is better than sitting in your local currency that is being devalued by 30-50% or having your cash confiscated by a bail in all together.
meaning that they must KNOW that this is going to happen FOR SURE instead of just the usual propaganda bullshit ? or not - who the fuck knows
EUR being bought furiously.
Are the boys playing well in the sandbox anymore?
Or are they not?
EUR destined to come apart. Volitility galore!
Why now, you ask?
Not tho' the trader knew
Someone had blunder'd:
Their's not to make reply,
Their's not to reason why,
Their's but to do and die
(variation to "Charge of the light Brigade", Alfred, Lord Tennyson)
Simple, the telephone lines to the Bürkliplatz in Zürich just were burning since this monday. Forget about Greece. Probably a Mr. hing yung wahh was asking for a bid for 250 bil of EUR. SuperMario will come with 1 to 2 tril in order to push EUR/USD to 0.90, we were there a couple of years ago and the Swissie will go thru the roof again. Funny, that Switzerland is not buying 10 to 20 % of the top EU companies, Jordan doesn't have guts
sounds good to me!
Sure, it was obvious for serious analysts (incl. this site). Look at the development of foreign reserves in the SNB balance sheet over the last few monthz. And then negative rates didn't stop this flow at all. Greek elections and an eventual Grexit and the SNB would have had all EURO's in circulation in their accounts.
PS: CHF 1000 francs bills in circulation are exploding (this for negative rates on CHF accounts).
Damn! I wish I was as smart as you. I don't even grasp what you said, but it sounds right. I can't keep up with central bank antics past the QE bit and interest rates!
On the bright side....we all just learned that the SNB has some degree of credibility since this SHOCKED the trading world. The trading world on this side of the ocean doesn't get shocked with all the insiders at the FED and the USTreasury.
Gold, 'the canary in the coal mine, was definitely chirping loudly this early morning (US PST time)
Too bad for all the muppets sleeping soundly & missing out on all the fun.
Hmmm . . . maybe I'll wake up the girlfriend for some morning wake up luvin'
Swiss National Bank statement to other Central Banksters around the world.....
https://www.youtube.com/watch?v=YxYvzVxJtYM
Did that lady just flip him the fat finger?
Margin calls a good way to bring in money from the sidelines
I got all my stuff in Bitcoin.
So I'm ok.
Oh, and Putin's got my back!
Reminds me of the old Jesse Livermore dictum...."expect the unexpected".
Meh that's like the "There are knowns and known unknowns and unknown unknowns..."
I prefer Yogi Berra
"A nickle ain't worth a dime anymore."
"In theory there is no difference between theory and practice. In practice there is."
And for the PhD Keynesian Economists:
"You better cut the pizza in four pieces becuse I'm not hungry enough to eat six."
And one more that may be most appropriate for masters of the monetary universe:
"If you don't know where you're going you might wind up someplace else."
I had breakfast with Yogi once a long time ago in San Diego. Sadly, I was so fried from the drive over from out-of-state I don't recall it. My son enjoyed it though.
What he said...
They should move to some trade weighted dirty floating. Grexit funds will go directly to Switzerland. So wait for some huge sums flowing around FX markets.
I rather eat shit and puke on some diplomate's pants.
Got an early USA pacific standard time alert on the PMs and I wondered WTF?! was going on.
It's always nice to hear the PMs aren't soaring because WW3 has been launched somewhere . . . yet.
Thats coming.
It'll either be Ukies invading the Krim and the Russians kicking the shit out of them, and the Polish doing something stupid -- or -- some old cold war era American Naval vessel getting blown up in the Black Sea.
Meanwhile at various hedge fund offices around the world...
https://www.youtube.com/watch?v=LUaxyhRfqyk
I'm wondering if this is as simple--for the time being--as a Grexit just ahead.
The BVerfG must now accept the ECJ ruling for it to become law. It has yet to become "law." So there is that, could take a few weeks to months. We'll see if the Cardnials in Karlsruhe bend over and take it, or if they fight back.
Grexit fears + Germany killing off the OMT, if both happen at the same time, could be the double whammy that finally breaks France, which would be the final straw to go.
So if that does come to pass, SZ retains its credibility as a bastion of deep financial knowledge. Just thinking ahead to post-reorganization dayz to come.
With "No gas for you!", the Ukies are now the tired, huddled masses.
It's always nice to hear the PMs aren't soaring because WW3 has been launched somewhere . . . yet.
The night is young.
I see that "they" were able to get the handcuffs back on gold after a $30 rise. Good for them, hope they enjoy the control while they still have it.
I said it before and I'll say it again: this is what you Swiss get for rejecting gold and trusting in your central bankers. now deal with it.
Madame L'orange caught with her knickers down & titties in a knot.
This is getting comical!
http://goldsilver.com/video/imf-guard-lagarde-surprised-she-was-not-contacted-by-the-swiss-national-bank/
C'mon double 7's
lagrade has reason to be pissed, as a elite, she was due the courtesy of front running in her personal account. expect her to work to make a living..cold day in hell
Your wife already gave me my bonus
We gnomed some folks.
I can picture him in his ice cream suit saying that.
Best day of the year so far, banked 1080 pips :)