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"It's Carnage" - Swiss Franc Soars Most Ever After SNB Abandons EURCHF Floor; Macro Hedge Funds Crushed

Tyler Durden's picture




 

"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:

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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Thu, 01/15/2015 - 13:36 | 5665541 JLee2027
JLee2027's picture

Algo grudge match? Fed versus Euro?

Thu, 01/15/2015 - 13:43 | 5665580 KnuckleDragger-X
KnuckleDragger-X's picture

Quick men, to the lifeboats! And get those damned women and children out of the way!!!

Thu, 01/15/2015 - 07:10 | 5663946 Silver Short Seller
Silver Short Seller's picture

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.

Thu, 01/15/2015 - 07:47 | 5664033 old naughty
old naughty's picture

Care to specculate how bad SNB would be? Bruce said they made 38B, humongus relatively.

Not "second", after SCB (Standard Chartered Bank) I hope.

Thu, 01/15/2015 - 07:20 | 5663963 ACP
ACP's picture

The correct phrase is:

"Called it, BITCHEZ!"

Thu, 01/15/2015 - 07:54 | 5664053 GetZeeGold
GetZeeGold's picture

 

 

Cut the rookie some slack.

Thu, 01/15/2015 - 12:00 | 5665078 NoTTD
NoTTD's picture

In the alternative:  "Absofuckingloutely called it, bitchez."

Thu, 01/15/2015 - 07:34 | 5664003 BubbleBobble
Thu, 01/15/2015 - 09:46 | 5664394 mantrid
mantrid's picture

but Bruce explained why!

Thu, 01/15/2015 - 08:38 | 5664170 actionjacksonbrownie
actionjacksonbrownie's picture

Chuck Buttler also called it. He will be on fire this morning lol.

Thu, 01/15/2015 - 07:15 | 5663949 Chat_noir
Chat_noir's picture

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...

Thu, 01/15/2015 - 07:22 | 5663969 El Hosel
El Hosel's picture

Yesterday Jamie said the Oil move did not bother him ( something to that effect )... This might do it

Thu, 01/15/2015 - 07:15 | 5663950 Chat_noir
Chat_noir's picture

on such a move the dead guys are the market makers; possibly the option market makers facing hedge funds

Thu, 01/15/2015 - 07:15 | 5663953 Calculus99
Calculus99's picture

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.  

Thu, 01/15/2015 - 07:16 | 5663955 Keyboard Kommando
Keyboard Kommando's picture

Eat that, Satanic Tribe! I hope that prick Soros lost lots of $$$! Why is that old bastard still alive?!?!?

Thu, 01/15/2015 - 07:17 | 5663959 El Hosel
El Hosel's picture

" Curbs in "

Thu, 01/15/2015 - 07:24 | 5663970 Latitude25
Latitude25's picture

Soros probably front ran it.

Thu, 01/15/2015 - 10:34 | 5664669 JRobby
JRobby's picture

Courtesy of William Banzai7

Thu, 01/15/2015 - 10:41 | 5664709 JRobby
JRobby's picture

He goes to the same doctor as Cheney

Thu, 01/15/2015 - 13:30 | 5665508 Temporalist
Temporalist's picture

They live off of transfusions of poor children's blood infused with ions of gold and silver.

Thu, 01/15/2015 - 07:17 | 5663957 AvoidingTaxation
AvoidingTaxation's picture

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...

Thu, 01/15/2015 - 07:17 | 5663960 AUD
AUD's picture

-0.25 to -0.75% is a big move higher in price for short term debt. No wonder the speculators are diving in.

Thu, 01/15/2015 - 07:18 | 5663961 new game
new game's picture

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...

Thu, 01/15/2015 - 07:23 | 5663962 GoldSilverBitcoinBug
GoldSilverBitcoinBug's picture

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 !

Thu, 01/15/2015 - 07:47 | 5664032 SpanishGoop
SpanishGoop's picture

For once in my live........thank you SNB.

I am a countertrend trader !

 

Thu, 01/15/2015 - 08:02 | 5664074 Big Brother
Big Brother's picture

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.

Thu, 01/15/2015 - 08:18 | 5664117 cnmcdee
cnmcdee's picture

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 ;-)

Thu, 01/15/2015 - 10:45 | 5664723 JRobby
JRobby's picture

+10,000

Whaaaaaa! We want a Bail Out AND A BAIL IN!

Fuck all!

Thu, 01/15/2015 - 08:55 | 5664219 Blano
Blano's picture

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. 

Thu, 01/15/2015 - 18:14 | 5666995 MrButtoMcFarty
MrButtoMcFarty's picture

It's called a stop loss.

;)

Thu, 01/15/2015 - 07:20 | 5663965 Buck O Five
Buck O Five's picture

Gold punching through 1250

 

There are folks gonna be reaching for the Anusol Wipes

Thu, 01/15/2015 - 07:57 | 5664061 Keyser
Keyser's picture

How long before it blows through $1350,  Q1 or Q2?

Thu, 01/15/2015 - 07:21 | 5663967 kowalli
kowalli's picture

HAHAH, cool day today.

Thu, 01/15/2015 - 07:24 | 5663971 kowalli
kowalli's picture

Any huge news on CNN,BBS like Swiss defolt any time? i think so,pathetic....

Thu, 01/15/2015 - 07:27 | 5663975 Platypus
Platypus's picture

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!!

Thu, 01/15/2015 - 08:10 | 5664098 Big Brother
Big Brother's picture

July 31st, 2011 - The last time the SNB intervened.

Thu, 01/15/2015 - 11:05 | 5664824 FrankDrakman
FrankDrakman's picture

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". 

Thu, 01/15/2015 - 07:30 | 5663977 Tinky
Tinky's picture

I've just consulted my various stochastic volatility models, and every single result reads – please excuse the techinical jargon – shit's gettin' real! 

Thu, 01/15/2015 - 07:59 | 5664069 Keyser
Thu, 01/15/2015 - 12:38 | 5665272 noben
noben's picture

Nice use of 'stochastic volatility models'.
Is that fancy talk for 'random shit outcomes'?

Thu, 01/15/2015 - 07:27 | 5663979 GoldSilverBitcoinBug
GoldSilverBitcoinBug's picture

I have small losses but I hope George Soros is margin called and dead, bitchez.

Thu, 01/15/2015 - 08:28 | 5664146 onewayticket2
onewayticket2's picture

wait til we see his huge trades....yesterday.  just in time.  he'll be called "prescient"

Thu, 01/15/2015 - 07:28 | 5663983 mt paul
mt paul's picture

gold just spiked 25 $

wonder if it will tag 1300. by dawn 

Thu, 01/15/2015 - 07:27 | 5663984 Latitude25
Latitude25's picture

Phys to da moon 

Thu, 01/15/2015 - 07:29 | 5663986 Ikea nesting in...
Ikea nesting instinct's picture

UBS not quoting CHF !

Thu, 01/15/2015 - 07:36 | 5664009 medium giraffe
medium giraffe's picture

Yeah, but I bet they just got a shitload richer.

Thu, 01/15/2015 - 08:34 | 5664157 Ikea nesting in...
Ikea nesting instinct's picture

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.

Thu, 01/15/2015 - 08:34 | 5664158 Ikea nesting in...
Ikea nesting instinct's picture

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.

Thu, 01/15/2015 - 07:28 | 5663988 falga
falga's picture

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...

Thu, 01/15/2015 - 12:44 | 5665293 noben
noben's picture

So... double-whammy of Grexit and Gazprom move (no gas for 6 EU countries) are rattling the Euro?

Thu, 01/15/2015 - 07:29 | 5663989 AvoidingTaxation
AvoidingTaxation's picture

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.

Thu, 01/15/2015 - 07:30 | 5663990 Irishcyclist
Irishcyclist's picture

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?

Thu, 01/15/2015 - 07:31 | 5663998 Latitude25
Latitude25's picture

See other relevant article about gas shut off to EU.  Wouldn't want to be pegged to a dying currency.

Thu, 01/15/2015 - 07:35 | 5664004 Irishcyclist
Irishcyclist's picture

That could be an explanation.

Are the SNB required to issue an official explanation for this move?

 

Thu, 01/15/2015 - 07:41 | 5664021 Brazen Heist
Brazen Heist's picture

But Lithuania just joined the party! Don't spoil it for the latecomers.

Thu, 01/15/2015 - 09:34 | 5664354 MarkAntony
MarkAntony's picture

Interestingly, Poland declined the EURO in 2014...  foresight?

Thu, 01/15/2015 - 08:20 | 5664119 Ghordius
Ghordius's picture

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

Thu, 01/15/2015 - 11:24 | 5664940 weburke
weburke's picture

the article about gas shut off is  bullshit. a lie really.

Thu, 01/15/2015 - 07:35 | 5664002 Haus-Targaryen
Haus-Targaryen's picture

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.  

Thu, 01/15/2015 - 07:46 | 5664028 AUD
AUD's picture

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.

Thu, 01/15/2015 - 07:52 | 5664049 CHX
CHX's picture

Gives a 13% discount for gold in CHF that will not last.

Thu, 01/15/2015 - 08:22 | 5664125 cnmcdee
cnmcdee's picture

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....

Thu, 01/15/2015 - 09:01 | 5664244 headhunt
headhunt's picture

Putin should demand payment in gold only, the Ruble is shit for a couple of years.

Thu, 01/15/2015 - 12:18 | 5665147 Cpl Hicks
Cpl Hicks's picture

Putin will probably ask for payment in young Greek lads.

Thu, 01/15/2015 - 08:17 | 5664113 Ghordius
Ghordius's picture

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

Thu, 01/15/2015 - 08:21 | 5664126 Haus-Targaryen
Haus-Targaryen's picture

The banker's comments seem crazy, until you realize they are likely masocists, thus it makes perfect sense.  

Thu, 01/15/2015 - 08:32 | 5664155 Ghordius
Ghordius's picture

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

Thu, 01/15/2015 - 13:49 | 5665616 Uncle Remus
Uncle Remus's picture

.

I have to be exquisitely polite, in real life.

 

Good God - that explains why I am so tired at the end of the day. Polite is hard work.

Thu, 01/15/2015 - 08:08 | 5664092 holgerdanske
holgerdanske's picture

"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??

Thu, 01/15/2015 - 07:36 | 5663991 medium giraffe
medium giraffe's picture

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.

Thu, 01/15/2015 - 07:40 | 5664015 clade7
clade7's picture

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!

Thu, 01/15/2015 - 07:47 | 5664026 medium giraffe
medium giraffe's picture

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.

Thu, 01/15/2015 - 08:50 | 5664207 25or6to4
25or6to4's picture

It's always a good day to be a giraffe when there is no more low hanging fruit.

Thu, 01/15/2015 - 07:46 | 5664029 Global Hunter
Global Hunter's picture

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!

Thu, 01/15/2015 - 07:49 | 5664041 medium giraffe
medium giraffe's picture

A disturbance in the farce!

Thu, 01/15/2015 - 09:14 | 5664283 HardlyZero
HardlyZero's picture

The Great Un-wind...before Reset.

It's all good.

Thu, 01/15/2015 - 13:16 | 5665453 Buckaroo Banzai
Buckaroo Banzai's picture

That, sir, is the comment of the day.

Thu, 01/15/2015 - 07:30 | 5663994 Calculus99
Calculus99's picture

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... 

Thu, 01/15/2015 - 07:31 | 5663995 Peter Pan
Peter Pan's picture

Perhaps the Swiss are having their revenge on the USA for being bastards towards the Swiss banking system.

Thu, 01/15/2015 - 07:50 | 5664045 Tinky
Tinky's picture

collateral schadenfreude

Thu, 01/15/2015 - 08:40 | 5664181 AbbeBrel
AbbeBrel's picture

Freud was an Austrian BTW - so he must have given them (the SNB) the "slip"!

Thu, 01/15/2015 - 08:51 | 5664208 holgerdanske
holgerdanske's picture

"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!;-)

Thu, 01/15/2015 - 09:09 | 5664264 Peter Pan
Peter Pan's picture

Appreciate it !!!

Thu, 01/15/2015 - 07:35 | 5664000 Brazen Heist
Brazen Heist's picture

Well that escalated quickly.

QE is on its way.

Could the Euro hit parity with the USD this year?

Thu, 01/15/2015 - 07:36 | 5664007 Latitude25
Latitude25's picture

Or next week?

Thu, 01/15/2015 - 07:47 | 5664039 kowalli
kowalli's picture

this month

Thu, 01/15/2015 - 07:34 | 5664001 Infinite QE
Infinite QE's picture

Effect on Swiss r/e? Anyone know how that world is trending?

Thu, 01/15/2015 - 07:51 | 5664043 HardAssets
HardAssets's picture

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.

Thu, 01/15/2015 - 07:36 | 5664008 falga
falga's picture

better start figuring that $/Euro parity is in the cards perhaps earlier than anyone expected...

Thu, 01/15/2015 - 07:39 | 5664014 hroerekr
hroerekr's picture

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

 

Thu, 01/15/2015 - 07:42 | 5664019 RealityCheque
RealityCheque's picture

Its a day for popcorn and beer!

Burn you motherfuckers.

Thu, 01/15/2015 - 07:46 | 5664022 Global Hunter
Global Hunter's picture

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. 

Thu, 01/15/2015 - 07:44 | 5664025 FallenOne
FallenOne's picture

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!

Thu, 01/15/2015 - 08:08 | 5664072 Prober
Prober's picture

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.

Thu, 01/15/2015 - 08:12 | 5664107 stant
stant's picture

+ 1 on the m1a

Thu, 01/15/2015 - 07:51 | 5664037 Baby Eating Dingo22
Baby Eating Dingo22's picture

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

Thu, 01/15/2015 - 07:52 | 5664046 falak pema
falak pema's picture

Look at this for comparison of CB policies :

https://twitter.com/ReutersJamie/status/555316782517727232/photo/1

Thu, 01/15/2015 - 07:53 | 5664048 Irishcyclist
Irishcyclist's picture

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?

 

Thu, 01/15/2015 - 08:05 | 5664078 silvermail
silvermail's picture

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.

Thu, 01/15/2015 - 10:11 | 5664525 css1971
css1971's picture

 

Meaning and Purpose of intelligent life is to convert energy into knowledge.

Nope. This is pure hubris.

Intelligent life has exactly the same meaning and purpose as non intelligent life.

Thu, 01/15/2015 - 07:55 | 5664054 PirateOfBaltimore
PirateOfBaltimore's picture

Gold trading above platinum. Are we going to see a break out?

Thu, 01/15/2015 - 08:13 | 5664095 GetZeeGold
GetZeeGold's picture

 

 

Gold trading above platinum.

 

Crap.......not again!

 

It's math.....it shouldn't be doing that.

Thu, 01/15/2015 - 08:16 | 5664114 holgerdanske
holgerdanske's picture

"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

Thu, 01/15/2015 - 08:29 | 5664151 GetZeeGold
GetZeeGold's picture

 

 

Common Core math......makes my brain hurt.

Thu, 01/15/2015 - 07:55 | 5664057 Sandmann
Sandmann's picture

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

Thu, 01/15/2015 - 08:03 | 5664076 morning
morning's picture

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.

Thu, 01/15/2015 - 08:06 | 5664079 Nussi34
Nussi34's picture

"It is a terrible day for corporate Switzerland,"

 

and a great day for Swiss wage earners!

Thu, 01/15/2015 - 08:10 | 5664099 Diet Coke and F...
Diet Coke and Floozies's picture

Ya, if they still have a job!

Thu, 01/15/2015 - 08:18 | 5664116 GetZeeGold
GetZeeGold's picture

 

 

Is it still legal to work over 29.5 hr/wk in Switzerland?

Thu, 01/15/2015 - 09:44 | 5664390 basho
basho's picture

you don't know much do you? lmao

Thu, 01/15/2015 - 14:18 | 5665753 swiss chick
swiss chick's picture

FUNNY

Thu, 01/15/2015 - 14:17 | 5665741 JR
JR's picture

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.”

Thu, 01/15/2015 - 08:05 | 5664080 tiaaots
tiaaots's picture

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.

Thu, 01/15/2015 - 09:14 | 5664280 tiaaots
tiaaots's picture

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 ?

 

Thu, 01/15/2015 - 09:23 | 5664306 PirateOfBaltimore
PirateOfBaltimore's picture

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.

Thu, 01/15/2015 - 08:07 | 5664085 Ghordius
Ghordius's picture

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

Thu, 01/15/2015 - 08:52 | 5664211 Haus-Targaryen
Haus-Targaryen's picture

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. 

 

Thu, 01/15/2015 - 13:22 | 5665477 Fractal Parasite
Fractal Parasite's picture

Cognitive dissonance is the aim.

Thu, 01/15/2015 - 08:09 | 5664097 Diet Coke and F...
Diet Coke and Floozies's picture

1700+ pip movement on CHF/JPY.

Thu, 01/15/2015 - 08:12 | 5664103 DirkDiggler11
DirkDiggler11's picture

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.

Thu, 01/15/2015 - 08:14 | 5664109 Nana
Nana's picture

I Bet that wife of the SNB is MAKING LOADS OF CASH!!!!!! BIIIIIIIATTTTCHHHHHHHHHH

Thu, 01/15/2015 - 08:19 | 5664120 Brazen Heist
Brazen Heist's picture

We shocked some folks

-SNB

Thu, 01/15/2015 - 10:36 | 5664683 Buster Cherry
Buster Cherry's picture

-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

Thu, 01/15/2015 - 14:10 | 5665707 siklidkid
siklidkid's picture

We irritated some folks. ;)

Thu, 01/15/2015 - 08:20 | 5664122 AbbeBrel
AbbeBrel's picture

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

Thu, 01/15/2015 - 08:23 | 5664127 Diet Coke and F...
Diet Coke and Floozies's picture

"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.

Thu, 01/15/2015 - 08:26 | 5664139 Gaengphed
Gaengphed's picture

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‚

Thu, 01/15/2015 - 08:28 | 5664140 Baby Eating Dingo22
Baby Eating Dingo22's picture

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

 

 

Thu, 01/15/2015 - 08:37 | 5664149 Catullus
Catullus's picture

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.

Thu, 01/15/2015 - 08:30 | 5664152 Baby Eating Dingo22
Baby Eating Dingo22's picture

Carnage has become carnations

Thu, 01/15/2015 - 08:33 | 5664160 Rip van Wrinkle
Rip van Wrinkle's picture

If ever you wanted confirmation that these wankers have a clue what they're doing, today should put your mind at rest.

Thu, 01/15/2015 - 16:47 | 5666505 Bioscale
Bioscale's picture

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.

Thu, 01/15/2015 - 08:35 | 5664165 The central planners
The central planners's picture

Everything commenced with de "BIG BANG" and everything its going to end with the "BIG BANK"

Thu, 01/15/2015 - 08:38 | 5664169 Platypus
Platypus's picture

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.

Thu, 01/15/2015 - 08:38 | 5664174 Ewtman
Thu, 01/15/2015 - 08:39 | 5664177 mantrid
mantrid's picture

terrible day for corporate Switzerland!!!

Thu, 01/15/2015 - 09:41 | 5664368 basho
basho's picture

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.

Thu, 01/15/2015 - 08:49 | 5664203 Bernoulli
Bernoulli's picture

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!!

Thu, 01/15/2015 - 08:50 | 5664206 youngman
youngman's picture

Looks like my Rolex watch just became more valueable......I wonder if the Swiss people now wish they had voted for the gold standard????

Thu, 01/15/2015 - 08:51 | 5664210 Let The Wurlitz...
Let The Wurlitzer Play's picture

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

Thu, 01/15/2015 - 09:19 | 5664298 Calculus99
Calculus99's picture

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'.

Thu, 01/15/2015 - 13:23 | 5665478 Livermore Legend
Livermore Legend's picture

The "Control Illusion" indeed:

IGNORANCE by those who Believe it; ARROGANCE by those who Think it.......

 

Thu, 01/15/2015 - 08:54 | 5664216 constantine
constantine's picture

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.

Thu, 01/15/2015 - 13:23 | 5665482 Buckaroo Banzai
Buckaroo Banzai's picture

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.

Thu, 01/15/2015 - 08:57 | 5664224 Smuckers
Smuckers's picture

I'm heading out to the airport to see what CNBC has to say about this.

 

Thu, 01/15/2015 - 09:10 | 5664268 GetZeeGold
GetZeeGold's picture

 

 

Word up there dawg....I was walking through the airport and looked up in astonishment.....Wolf Blitzer is still alive?

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