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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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Algo grudge match? Fed versus Euro?
Quick men, to the lifeboats! And get those damned women and children out of the way!!!
Any word on whether the SNB is still solvent? You know because it holds half a trillion in FX reserves and they just lost something like 20% of that in CHF terms.
Care to specculate how bad SNB would be? Bruce said they made 38B, humongus relatively.
Not "second", after SCB (Standard Chartered Bank) I hope.
Called it.
https://www.twitter.com/Intellikon/status/554347212663029760
The correct phrase is:
"Called it, BITCHEZ!"
Cut the rookie some slack.
In the alternative: "Absofuckingloutely called it, bitchez."
Bruce called it http://www.zerohedge.com/news/2015-01-11/wise-man-sinks-snb
They called it before Bruce. https://twitter.com/Intellikon/status/544310503783149568
but Bruce explained why!
Chuck Buttler also called it. He will be on fire this morning lol.
its a tsunami but come on no one is long EURCHF. apart from the Swiss National Bank
im awaiting the calculation but I bet they're losing north of 10bn EUR for sure..they've hit their stop loss
the HF are having fun...
Yesterday Jamie said the Oil move did not bother him ( something to that effect )... This might do it
on such a move the dead guys are the market makers; possibly the option market makers facing hedge funds
Got to me more than a few people taken out o the game with that move. Man, can you imagine having to wake up some dipshit hedge fund manager in NY with the news of where his 1.2000 stop got filled. Probably 0.9000 or lower. And if that person hates mornings, he's not going to like this one.
Good question about the solvency of the SNB. Should have bought Gold you wankers instead of playing games (pegs) which history proves always fail, just a matter of time.
Eat that, Satanic Tribe! I hope that prick Soros lost lots of $$$! Why is that old bastard still alive?!?!?
" Curbs in "
Soros probably front ran it.
Courtesy of William Banzai7
He goes to the same doctor as Cheney
They live off of transfusions of poor children's blood infused with ions of gold and silver.
It touched 0.85
WOW.
Switzerland is truly one of the wild cards. The last free country in the world.
Freedom in your face bitchez.
Now if only they made a press conference announcing 50 train based ICBMs pointed towards some NWO capitals...
-0.25 to -0.75% is a big move higher in price for short term debt. No wonder the speculators are diving in.
resume bent over position, the prayers have not been answered. the bitch cometh to take back what is hers. she wants her half. she will get it, cause mother econ nature always prevails. move over swiss cheese. you had your chance to do the right thing. you are nothing but another bunch of printers devaluing the ir fiat. might as well sell the gold, it is useless to your policies...
Broke my small 1000 $ Account: lesson learned. (Broker have even losses !)
Currency "market" are manipulated as ever !
1000 $ is nothing but what about those guys who invested hundred thousands or even millions of dollars or even some others their life savings o.O ?
Prepare to see some hedge funds and banks being insolvent in those coming days because it was the equivalent of a 9/11 financial attack here !
EURCHF now deactivated like the Ruble o.O !!!
Edit: Now I will stick with Gold and some Bonds much safer in this crucial years of 2015 !
First Shooting at Paris and now 9/11 central bank attack, just wow !
For once in my live........thank you SNB.
I am a countertrend trader !
EURCHF still active on FXCM.
Damn- I had a EURCHF short going up until end of 2014 and closed out to free up positions for dollar longs.
----
Also, I wonder how much money Thomas Jordan's (SNB chairman) wife made on this trade?
Nothing like 2000 pips in 15 minutes to bolster the account.
1000 $ is nothing but what about those guys who invested hundred thousands or even millions of dollars or even some others their life savings <of your money..>
- there fixed it for yah ;-)
+10,000
Whaaaaaa! We want a Bail Out AND A BAIL IN!
Fuck all!
This is why I never considered learning FX trading. You almost have to stay awake 24/7 just to keep from getting burned by moves like this, and even then that might not be enough.
It's called a stop loss.
;)
Gold punching through 1250
There are folks gonna be reaching for the Anusol Wipes
How long before it blows through $1350, Q1 or Q2?
HAHAH, cool day today.
Any huge news on CNN,BBS like Swiss defolt any time? i think so,pathetic....
LOL!! Gosh, I don't remember such a violent move as this one before!! But anyways it was in the direction of the trend which has been bearish since 2007 so I doubt professionals lost money. I don't trade this pair but if I had a position it would be short. Anyways thats a good lesson for the wanna be traders. Don't play with fire kids!!
July 31st, 2011 - The last time the SNB intervened.
I don't understand the headline. Surely every 'bet' on currencies has two sides? So the guys who were short lost to the guys who were long, and then those nimble enough to short the top and ride it down cleaned up on the longs. For every loser, there's a winner, right?
Actually, it reminds me of FCOJ futures action in the documentary "Trading Places".
I've just consulted my various stochastic volatility models, and every single result reads – please excuse the techinical jargon – shit's gettin' real!
http://www.youtube.com/watch?v=uvqJ1mTkEuY
More like....
https://www.youtube.com/watch?v=stdi-1tIUhM
Nice use of 'stochastic volatility models'.
Is that fancy talk for 'random shit outcomes'?
I have small losses but I hope George Soros is margin called and dead, bitchez.
wait til we see his huge trades....yesterday. just in time. he'll be called "prescient"
Is that you, Elvira?
http://johnhelmer.net/wp-content/uploads/2014/12/1569b.jpg
gold just spiked 25 $
wonder if it will tag 1300. by dawn
Phys to da moon
UBS not quoting CHF !
Yeah, but I bet they just got a shitload richer.
I doubt it... But then again, all the big Swiss banks were telling clients to go long EURCHF. Maybe the banks didn't hedge and took the other side.
I doubt it... But then again, all the big Swiss banks were telling clients to go long EURCHF. Maybe the banks didn't hedge and took the other side.
Swiss bankers were afraid of Euro cratering and had to get out of the peg as it was costing them too much to sustain it... sudden but desperate move! Not a good sign even for the Swiss to act like this...
Gold going higher but not for long as $ index almost back to 92 after crashing after announcement...
So... double-whammy of Grexit and Gazprom move (no gas for 6 EU countries) are rattling the Euro?
This is what a STRONG currency policy looks like. Deflation in Switzerland will be huge. good! I see Migros and Coop starting lowering proces. Diesel? 15% discount on top of the 50% discounted Brent.
I'm astounded that Household are winning and the tribe is loosing.
2015 fireworks!
BNS will loose 75B, but made 40B in 2014 + they sure frontrunned their own moove.
The collateral damage is by the bye.
The real question is why did the SNB make this move and why did they make this move now?
See other relevant article about gas shut off to EU. Wouldn't want to be pegged to a dying currency.
That could be an explanation.
Are the SNB required to issue an official explanation for this move?
But Lithuania just joined the party! Don't spoil it for the latecomers.
Interestingly, Poland declined the EURO in 2014... foresight?
define dying currency. in the downward leg of a currency war, the "winners" are those that can devalue... moar. particularly when without causing damage to their balance sheets
in other words, if the EURUSD goes down enough, the whole reasoning for QE loses potency
the article about gas shut off is bullshit. a lie really.
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.
The vault of the SNB is stuffed with EUR denominated garbage anyway, from the last 3 years. Yet gold falls 13% in CHF.
Ponzi scheme.
Gives a 13% discount for gold in CHF that will not last.
Then Putin comes out and ask for natural gas to be paid for in either GOLD or Rubles.. Maybe someone in the swiss central bank was simply preparing for economic warefare....
Putin should demand payment in gold only, the Ruble is shit for a couple of years.
Putin will probably ask for payment in young Greek lads.
excellent comment, Haus. that is really the question
except that whenever I thought this way, for some reasons markets behaved in the complete opposite way, so I am really at loss, there
there is this "bad news are good news" thing regarding leveraging/deleveraging that seems to throw a wrench in all that linear thinking, isn't there?
just recently I listened to a couple of bankers and investors from the other side of the pond that felt that a eurozone QE would make them more... exuberant was the word they used
The banker's comments seem crazy, until you realize they are likely masocists, thus it makes perfect sense.
the comments came from the "investors", which were previously bankers, and then for a while hedge fund managers
the problem at arguing with those people, at least for me, is that they made... you seriously don't want to know how much they made by making such calls and being right
as a reminder, I make stuff. just a small producer, me. real life isn't like commenting on a blog and being able to shout "you damn bastards, I hope you..."
I have to be exquisitely polite, in real life. though except for the regret in such occasions, it's a policy I would always advice
.
Good God - that explains why I am so tired at the end of the day. Polite is hard work.
"The collateral damage is by the bye.
The real question is why did the SNB make this move and why did they make this move now?"
Simple, you don't tie your boat to a sinking ship.!
Those poor bastards, should have gone for gold, when thy had a chance.
Anyone with an export business, that voted against gold, because they were stupid or shit scared has now been double whipped by the national bank they voted to support.
jumping out of windows, anyone??
Topped up my short on the Euro about 20 minutes before this hit. Couldn't believe what I was seeing on my trade when it happened. No, I didn't call it, that was just pure luck. Thankfully I've stayed away from the CHF, didn't see the point of trading the EUR/CHF and felt that USD/CHF moves were irrelevant as they were better expressed on the Euro. Swings and roundabouts I guess - I still have painful memories of taking one in the ass from the BoJ some years ago.
Congratulations...that was a great action on your part...i couldnt sleep either, was up and everything looked all green and stable, dicking around on the Caesars thread, then, Bang! All of a sudden things got exciting!
Thx, it's a good day to be a giraffe today, but we'll probably see more and more of this nonsense and I just know it's gonna catch me out sooner or later. Wonder what stop slippage was like, - guess it was pretty horrible.
It's always a good day to be a giraffe when there is no more low hanging fruit.
I have been getting up every couple of hours the last 2 nights to check on the news, ya could just feel it couldn't ya?
+1 to the Giraffe for admitting he didn't call it and it was just luck, perhaps you are being overly modest though and your sub-conscious took command and called it for you!
A disturbance in the farce!
The Great Un-wind...before Reset.
It's all good.
That, sir, is the comment of the day.
Look where your Central Bank scare tactics got the Swiss re the Gold vote?
Gold no good they said, dreadful asset, so trust us with being long billions of Euros and short billions of Swiss. Gold offers us little 'flexibility', better to trust the mighty Euro.
They've got guns in Switzerland, better go Red Alert at the SNB, probably bring out the Tanks as well. Again, this is all for your 'benefit', trust us...
Perhaps the Swiss are having their revenge on the USA for being bastards towards the Swiss banking system.
collateral schadenfreude
Freud was an Austrian BTW - so he must have given them (the SNB) the "slip"!
"Perhaps the Swiss are having their revenge on the USA for being bastards towards the Swiss banking system."
Perhaps the Swiss are having their revenge on the USA for being bastards.
Fixed for you!;-)
Appreciate it !!!
Well that escalated quickly.
QE is on its way.
Could the Euro hit parity with the USD this year?
Or next week?
this month
Effect on Swiss r/e? Anyone know how that world is trending?
Don't know about their r/e but I think I'll put in my online order for a couple of Swiss Army knives that I've been eyeing before prices are adjusted.
better start figuring that $/Euro parity is in the cards perhaps earlier than anyone expected...
Hi everyone!
Since before the London session opening something was amiss. There was VERY little movement throughout all currency pairs. And more than half an hour after London opening the prices inched just some 12-15 pips, xxx/JPY pairs included. Around 09:30-09:40 CET it was clear that something was going to happen. All big players were probably out of the FX market. Don't know about hedge funds/investment banks and such, but the CBs surely knew this was coming.
hroerekr
Its a day for popcorn and beer!
Burn you motherfuckers.
While most of the world starts to freak out and are forced to come to terms with reality, I suspect this is going to be a really fun day today for myself and most other ZH readers.
Well word has come from contacts close to the diablo lovers 2015-2016 the year it all goes shitski! Look for more exciting events! Worst part about it all the mid and high level managers know whats goin on and are scared shitless or hoping that they can sell their fellow man out to lucifer for protection! Get that bunny rabbit killer Ar15 cleaned showered and dressed in its favorite prom dress u will be needing it soon. Real men carry Kalashnikov btw so hedge accordingly!
Almost, here are my corrections:
1. FED, led by hyper-socialist academics, will continue ZIRP and bond buying using proceeds from maturing bonds intact until AFTER obola leaves office so that economic impact of rising rates will fall upon republican administration.
2. Girls use AR's, teenage boys use AK's, and real Warrior Men use M1A's and M21's.
+ 1 on the m1a
Central banksters hot happy about dissent
Empire and Philly Fed headlines being revised
A few more bright earnings reports and futures will be green by open
Look at this for comparison of CB policies :
https://twitter.com/ReutersJamie/status/555316782517727232/photo/1
The only question.
Why has the SNB done what it has done, and why now.
My guess is that the Swiss have made the calculation that it's currency can't be tied to the Euro. Why has it come to this conclusion? If that conclusion is right what has informed the Swiss view? Do they think that the Euro is going to undergo some fundamental change and that it is better to decouple now? I wonder how this decision was received at the ECB?
Meaning and Purpose of intelligent life is to convert energy into knowledge.
- Money - is primarily a mechanism to evaluate the expression and labor (work).
- Employment in turn, is a process of expenditure energy.
From which it follows that money and currency - a "Promissory notes for energy."
Energy - it is a physical phenomenon that exists in nature and the universe, regardless of humanity. Money (more correct currency) - it is only way of humanity, as the mechanism of definition and expression a quantifying energy.
In goods-money exchange, energy spawned goods and money and currency too - as a means of exchange of goods, works and services. It is obvious that the energy in the goods-money exchange, located above and goods and money / currency. Since it is the energy and generates first and second.
Thus, when we speak of "goods-money exchange" between the seller and the buyer, we are actually talking about the exchange of energy in the form of goods, for promise to return this energy, which expressed in the form of money/currencies.
That is, goods - is an energy that was embodied in a particular goods form.
A money-currency - is a bills for return this energy in future, like a promises, that this energy will return back in the future in the one or another form, that the owner of money can choose at their discretion.
Conclusion:
1. Energy - is money in their highest form.
2. Anyone who owns energy, may issue a bill on energy, that is will recognized by all the world as world currency.
Source RUS: http://www.kdggold.com/ru/information/energiya-eto-dengi-v-ih-naivysshei...
The foundation of the economic model of the EU - is the transformation of energy in various forms of trade. The entire economy of the EU is based on the transformation of energy in the form of industrial and agricultural goods.
Restricting access to cheap energy - is undermining the foundations of the economic model of the EU. Lack of energy will destroy the EU economy. Expensive energy, will make all European goods uncompetitive and also will destroy the EU economy.
Thus the EU will be destroyed as a rival to the United States and that the main purpose of the United States will be successfully achieved.
Nope. This is pure hubris.
Intelligent life has exactly the same meaning and purpose as non intelligent life.
Gold trading above platinum. Are we going to see a break out?
Gold trading above platinum.
Crap.......not again!
It's math.....it shouldn't be doing that.
"Gold trading above platinum.
Crap.......not again!
It's math.....it shouldn't be doing that."
Ha, aha!
https://www.youtube.com/watch?v=SXx2VVSWDMo
Common Core math......makes my brain hurt.
Now a large CHF/Rouble Swap pegged on oil prices at $40/bbl or on Gazprom deposits......could get interesting if SNB starts playing SCO currencies to develop a non-Euro future
after signing south stream, and with possible AAA-threatening QE, would Austria leave EZ? I remember putin visiting bunga-bunga at 3AM a while ago. and gas through greece, hmmm.... bottle of red for lunch.
"It is a terrible day for corporate Switzerland,"
and a great day for Swiss wage earners!
Ya, if they still have a job!
Is it still legal to work over 29.5 hr/wk in Switzerland?
you don't know much do you? lmao
FUNNY
Small businesses and countries are dying trying to compete with bank-connected multinational corporations while the standard of living of wages earners around the world succumb to plantation wages being forced upon them by the TBTFs. These multinational giants, feeding off trillions in QE and in secret monetary transfusions from the central bankers, then use fierce undercutting-price-wars to destroy the profits of once self-sustaining small businesses in order to bleed them to death by forcing them to lower their prices.
When the carnage is over the multinationals use their monopoly to raise their prices.
It’s time to for nationalism to take on globalism and kill the beast before it grows larger.
Professor Werner Sombart, a German economist and sociologist, in his work Die Juden und das Wirtschaftsleben (The Jews and Modern Capitalism) sums up today’s situation as he did Europe’s in 1911:
“If we want to make clear in one sentence the direction in which the modern political economy is moving we can say: the stock-exchange agents of the banks are becoming an ever-increasing measure the dictators of economic life. All economic happenings are more and more subordinate to the decisions of finance. The question whether a new industrial undertaking is to spring up or an existing one to be developed; whether the owner of a shop or a store is to get the means to extend his business, all these questions are decided in the offices of Banks and Bankers.
“In just the same way the sale of products is becoming, in an ever greater degree, a problem of finance. Our greatest industries are indeed already just as much financial associations as industrial undertakings.”
Professor Sombart in 1911 recognized that this perversion of order in which leadership among the financial, industrial and commercial interests were merged into powerful groups that had secured “a monopoly in the creation of national credit and these groups, being internationally organized, have only to be left free in order to dominate the earth.”
If CHF is a "safe haven" currency and its cap has just been removed....doesn't this mean that those seeking a safe haven will buy CHF and competing gold should go down. But gold has shot up. I know this is a dumb question to you guys ....but can someone spell out the answer for clueless over here please? I'm in gold BTW.
Got it .....if CHF/EUR strengthens suddenly, CHF/USD also strengthens. USD is weaker so gold price increases.
If, as some have commented, this move is in anticipation of EUR Q.E., then when that happens, US/EUR will strengthen and gold will be in a tension between being pushed down by stronger USD and being pushed up by buy AU sell EUR.
What do you say ?
My read is CHF's safe haven status is irrelevant currently. What you're seeing is equilibrium being reached that was originally out of whack from interventions and the euro peg. It was unappealing to own CHF with the Euro floor in place, so now it is relatively more attractive to own CHF.
Gold's price move is a function of a distaste for USD (in which gold is priced) relative to CHF, now that it is more appealing to own CHF sans Euro baggage.
LOL. I like & symphatize with Hayek's statement: "Words fail me...". Or a Swiss commentator on one of their major newspapers: "the speculators have won..."
well, for all the Germans that wish a return of a DM, this will be a wonderful showcase, won't it?
the strangest thing about this (for me) completely unexpected move is that inadvertedly made me a damn huge bundle. but I'm sure I'll have a lot of collateral damage yet to pay
well, the CHF ball is back in the courtyard, have fun, kids. I already see some shorting shitstorms on the Swiss stocks coming in
as usual, the real losers of this kind of battles are the Small and Medium enterprises, which aren't on that hedging FX stuff too much. already had four calls about prices for this year
Switzerland is going to prove or disprove a lot of theories, this year. Wish you luck, you dour Gnomes
Yes, because Poland (which is a much better analogue to Germany than Switzerland is) is doing so poorly.
https://www.google.de/search?q=scarier&oq=scarier&aqs=chrome..69i57j0l5....
You always pick your facts in a way I cannot figure out.
Cognitive dissonance is the aim.
1700+ pip movement on CHF/JPY.
This should also be a VERY interesting day in the PM markets. I am looking for another pop higher as trading on the Crimex opens up in the US this morning.
I Bet that wife of the SNB is MAKING LOADS OF CASH!!!!!! BIIIIIIIATTTTCHHHHHHHHHH
We shocked some folks
-SNB
-1. The use of Obama's catch phrases has become old and tiring to the point of irritation.
"We______some folks."
"If you like your _______you can keep your_____."
I respect that anyone who signs on can post here, that's not the problem. Its just the worn out use of that bastard's words in an attempt at humor
We irritated some folks. ;)
Wow - Swatch got swatted!
You won't get the time of day today from these folks:
https://www.google.com/finance?q=SWX%3AUHRN&ei=da-3VOnoM4KgwwOqvIHYDg
"and one after another retail FX brokerage has commenced "Rubling" the Swissy and as CHF pair as suddenly not available for trading."
At this point, I'd be happy to be able to log into the account... LMAO.
Interesting indeed. My broker just send me this message by mail:
Dear Client,
Due to today’s exceptional market movement in CHF crosses, we have been filling client orders and positions in an extremely illiquid market.
Once we are better able to establish true market liquidity, all executed fills will be revisited, and will be revised and amended to more accurate levels. This may result in a worse execution rate than the originally filled level.
Yours sincerely‚
Have we forgotten the PPT's mandate?
So used to them propping markets up on an almost daily basis, we may have forgotten its these exogenous events that the live for
Europe now well ingreen and almost green in the "safe haven" US stock market
Principles of International Political Economy: All curreny controls will eventually be rendered ineffective.
Also, negative interest rates are just theft. You might as well hold on to gold.
Carnage has become carnations
If ever you wanted confirmation that these wankers have a clue what they're doing, today should put your mind at rest.
They play games. They don't do what they officialy say they do. They just play. And they know that we know. It's part of the fucking game. Welcome on Earth. Fuck.
Everything commenced with de "BIG BANG" and everything its going to end with the "BIG BANK"
Checking around I can see a lot of people with NEGATIVE balance on their brokers!! Gosh!!! That will be interesting to see how it will turnout. People don't realise untill is too late that SL and TP can only be fulfilled when there is a market for it. If your SL triggers a buy for the CHF at a certain price but the market is selling 2000 pips above it, or not selling at all.....GUESS WHAT !!
Same for TP. You may saw a killing on virtual profits but was unable to close your position. Guess what? you can only bank several pips above it.
And the bubble continues to burst...
http://www.globaldeflationnews.com/anatomy-of-a-bubble-how-the-federal-r...
terrible day for corporate Switzerland!!!
no, terrible day for CH banks. this peg was mostly in their interest.
...and who the h*ll thinks that the CH could maintain such a peg with a currency that is plain dogs*it is very naive.
Jordan just said in the press conference that the international monetary policies are "just too different" and it seemed to them the right moment to do it now, rather than wait for doing it later and just doing a "month by month monetary policy"...
Pretty crazy stuff!!
Looks like my Rolex watch just became more valueable......I wonder if the Swiss people now wish they had voted for the gold standard????
Anyone who lost money on this deserves it. NO central bank can control the markets, at best only for a fleeting moment. This should be a lesson the those idiots thnking that the FED can control the US markets. Look for the same action in the treasury market when people realize that the US goverment is broke and just a 0.5% increase in interest rates will crush bond values.
Remember, the first one out wins.
Good Luck
Yep, it works until it doesn't. Years of price fixing can be undone in under 10 seconds as the Swiss proved.
Yet the sheeple always seem to cry out for their government's to 'help them' and to 'do something'. Yeah, they might 'do something' all right but it won't be for your benefit.
In times like this I always like to quote to people Milton Friedman's famous quote -
"If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand'.
The "Control Illusion" indeed:
IGNORANCE by those who Believe it; ARROGANCE by those who Think it.......
Why would these dumbasses have been short the CHF? That was an unnatural peg that was clearly going to get crushed eventually. My only thought is that the hedgefunds were trying to help out with the manipulation; similar to what they're doing with gold... and which, of course, will be met with a similar fate.
Because it's free money to short the CHF as long as the SNB has the other side of the trade.
Until they don't.
I'm heading out to the airport to see what CNBC has to say about this.
Word up there dawg....I was walking through the airport and looked up in astonishment.....Wolf Blitzer is still alive?