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Largest Retail FX Broker Stock Crashes 90% As Swiss Contagion Spreads
UPDATE: Knight Trading 2.0? Jefferies executive are reportedly on-site at FXCM discussing a $200 million bailout
As we first reported last night, FXCM was among the first of many retail FX brokers (and the largest) to see its clients suffer massive losses from yesterday's Swiss Franc surge following the SNB decision to unleash market forces. There are now at least 4 retail FX brokers (FXCM, Excel Markets, OANDA, and Alpari) who have announced "issues" but FXCM, being among the largest and publicly traded is the most transparent example of wjust what can go wrong when average joes are allowed 100:1 leverage. FXCM is now stuck chasing clients for money they do not (and will never) have.. and its stock is down 90%, trading a $2 this morning (down from $17 on Wednesday). As Credit Suisse notes, time is running out as regulators "tend to be impatient once capital requirements are breached."
FXCM crashes...
And the crashes some more as Credit Suisse suggests it's all over
We suspect there will be considerably more to come as CME's triple margin kicks in today...
* * *
So far 4 brokers have issues...
UK-based Alpari
From Alpari's statement:
The recent move on the Swiss franc caused by the Swiss National Bank's unexpected policy reversal of capping the Swiss franc against the euro has resulted in exceptional volatility and extreme lack of liquidity. This has resulted in the majority of clients sustaining losses which has exceeded their account equity. Where a client cannot cover this loss, it is passed on to us. This has forced Alpari (UK) Limited to confirm today, 16/01/15, that it has entered into insolvency. Retail client funds continue to be segregated in accordance with FCA rules.
This is what Alpari's CEO, James Hughes, who dubbed the SNB move as "horribly irresponsible", for obvious reasons now, said:
"I'm sure this isn't the last we'll hear on the subject and the SNB are going to be heavily scrutinised in the coming weeks for what appears to be a horribly irresponsible move on their part. For years central banks have tried to avoid days like today by being transparent and making moves like this over time while drip feeding their intentions to the markets. The SNB have shown themselves to be amateurs today and there is many people that will suffer considerably as a result."
* * *
FXCM is in trouble...
- *FXCM: CLIENTS EXPERIENCED SIGNIFICANT LOSSES AFTER SNB MOVE
- *FXCM: NEGATIVE EQUITY BALANCES OWED TO FXCM ABOUT $225M
- *FXCM: MAY BE IN BREACH OF SOME REGULATORY CAPITAL REQUIREMENTS
- *FXCM DISCUSSING ALTERNATIVES TO RETURN CAPITAL TO PRIOR LEVELS
FXCM an online provider of forex trading and related services worldwide, announced today due to unprecedented volatility in EUR/CHF pair after the Swiss National Bank announcement this morning, clients experienced significant losses, generated negative equity balances owed to FXCM of approximately $225 million.
As a result of these debit balances, the company may be in breach of some regulatory capital requirements.
We are actively discussing alternatives to return our capital to levels prior to today's events and discussing the matter with our regulators.
* * *
National Futures Association is in contact with FXCM...
“We are in contact with the firm and the CFTC and have no further comment at this time”: Karen Wuertz, spokeswoman for the National Futures Association, the futures industry’s self-regulatory agency.
* * *
And Excel Markets is done (as ForexLive's Adam Button explains)... Forex broker Excel Markets calls it quits on SNB shocker
Clients of New Zealand forex broker Global Brokers NZ Ltd, which operates Excel Markets, have been told the company “can no longer meet regulatory minimum capitalization requirements of N$1,000,000 and will not be able to resume business.” Client positions will be closed within the next hour.
Here is the statement (the emphasis, bolding and caps is theirs):
The dramatic move on the Swiss franc fueled by the Swiss National Bank’s unexpected policy reversal of capping the Swiss franc against the euro has resulted in rare volatility and illiquidity. Both our primary and backup liquidity providers became unresponsive or illiquid for hours after the event. The majority of clients in a franc position were on the losing side and sustained losses amounting to far greater than their account equity. When a client cannot cover their losses it is passed onto us.
ALL OPEN POSITIONS MUST BE CLOSED BY 5PM NEW YORK TIME OR THEY WILL BE AUTOMATICALLY CLOSED AT THAT TIME. NEW POSITIONS CANNOT BE OPENED AS OF THIS TIME.ALL CLIENT FUNDS ARE IN SEGREGATED ACCOUNTS AND NEVER USED FOR LP MARGINS. 100% OF POSITIVE CLIENT EQUITY OR BALANCE IS SAFE AND WITHDRAWABLE IMMEDIATELY.
Global Brokers NZ Ltd. STP’s 100% of order flow and has sustained a total loss of operating capital.GBL can no longer meet regulatory minimum capitalization requirements of N$1,000,000 and will not be able to resume business. Losses incurred on trades that could not be exited due to illiquidity were losses incurred directly with the liquidity provider and we do not have the ability to reimburse those. Please note the interbank market for francs was illiquid for hours after the event and no traders with an open franc position were able to close it for a significant period of time, at any broker.
News of the impact of this event on companies and traders is just beginning to come to light. As Directors and Shareholders we would like to offer our sincerest apologies for this devastating turn of events, and to thank you for being such a supportive group.
We ask that you place withdrawal requests for your account balance at your earliest convenience and allow for minor delays as our team begins to experience higher than usual service volumes.
In my opinion, any broker that uses ALL CAPS deserves whatever they get.
We’re encouraged that client funds are segregated. They won’t be the last to go under on this and we hope that everyone has been prudent with client money.
* * *
Which likely explains the carnage after the market close today in EURCHF
* * *
Canadian firm OANDA says suffered loss on Swiss Franc move...
Brokerage says client enquiries, withdrawals and deposits are being handled as normal, according to a statement on its website:
In the wake of unprecedented market events this morning, OANDA demonstrated its ongoing commitment to doing right by its clients.Despite suffering losses and vanishing liquidity in the institutional hedging market, OANDA remained true to its 14-year legacy of transparency, integrity and fairness to our clients. OANDA did not re-quote or amend any CHF cross client trades. We even took the further step of forgiving all negative client balances that were caused when clients could not close out their positions fast enough.Client inquiries are being handled normally and those making withdrawals and deposits are able to do so as normal.OANDA is proud of its strong reputation for fairness and integrity. We thank our customers for their continued loyalty and welcome new traders who want to experience outstanding service and execution.
* * *
4 down - more to come...
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Black Swan Trigger.
https://www.youtube.com/watch?v=H0m3Lfkzcw4
"I'm sure this isn't the last we'll hear on the subject and the SNB are going to be heavily scrutinised in the coming weeks for what appears to be a horribly irresponsible move on their part. For years central banks have tried to avoid days like today by being transparent and making moves like this over time while drip feeding their intentions to the markets. The SNB have shown themselves to be amateurs today and there is many people that will suffer considerably as a result."
I said that when they first pegged it.
I made two points when they pegged:
1. Their industry really needed it to avoid devastation by money coming in driving the CHF up.
2. There would be a big price to pay
Very important is the fact that even a central bank could not hold back reality forever. Guys like Ghordius kept saying, "their business, nothing to see here". But this is wrong. Moves by central banks affect us all.
The SNB saved Swiss industry for a few years, but it was through fantasy. And yet, everyone is shocked when the fantasy ends. Martin Armstrong has his ups and downs, but one point he makes is correct. It is all about confidence. Now that a central bank openly failed and Swiss business will be flogged, confidence in the whole fantasy of CB omnipotence is shaken.
Therefore, rest assured that the SNB will be horribly criticized. The reason will not be their decisions. The real reason will be that they must be criticized in order for the media/established order to cling to some semblance of feign confidence in the CBs.
The good thing about this is that a lot of stupid traders have been eliminated.
When you live by the sword, you die by the sword.
100:1 leverage? You better be very very skilled.Or lucky.
Nothing to see here.... they were just "fat" finger trades.... reversals coming soon?
That chart is showing a Green Eggs and Ham train-into-the-boat formation...
AIGFP, anyone?
Anyone think there might be some leverage behind an FX trading house?
This move by the SNB is how the owners of the Central Banks take out the competition.
Who'da thunk the Swiss would have laid the Black Swan Egg. Now we wait to see if it hatches.
WHY ISN'T THE GOVERNMENT DOING ANYTHING TO HELP INVESTORS WHO HAVE LOST THIR ENTIRE DEPOSITS DUE TO THIS UNACCEPTABLE MOVE BY THE SNB!! THIS IS INSANITY! WE NEED HELP AND NOBODOY IS DOING ANYTHING!!! WTF???
upvoted.
Me too lol
Alpari and FXCM : two of the most vile operators of "desk games" out there... One has to wonder if deviousness doesn't make the mind dull as it cannot then function with clarity under pressure... Keeping a desk "solvent" actually DOES require good trading skills and skill rarely if ever accompanies deviousness -->
I'm with you, MDB! We need more democrats in control! Vote for Obama!
TRADE FOREX LIKE A PRO!
How many times have I heard that ad being harped over CNBC Europe.
How many thousands of mangled muppets are lining the curbs of our streets and highways? The horror! The horror!
http://farm1.static.flickr.com/44/138233880_7bbb221d31.jpg
http://2.bp.blogspot.com/_aYepJG1hh68/Swi2LuU178I/AAAAAAAAASQ/VPLONySWfW...
https://c2.staticflickr.com/4/3663/3319094713_9a8d65accb_z.jpg?zz=1
As Credit Suisse notes, time is running out as regulators "tend to be impatient once capital requirements are breached."
Lulz, unless you're Goldman Sachs, JP Morgan, or... dare I say it... Credit Suisse.
Then the regulators just suspend the accounting rules.
Gambling debts (which these brokers fall under in the UK) are unenforcable so good fucking luck getting any money from UK "clients".
tbtf
Some people forgot the FOREX trading rules.
1. Central Banks will *always* move a currency pair opposite the mass muppets position..
2. Central Banks have *really* good timing to do it just when the maximum amount of muppet participation is occuring.
3. Central Banks will *always* move a currency pair just enough to hammer out 95% of the stops before it bounces back.
And the formula is repeated.
The real amatuer here is Hughes at Alpari.
They allowed 100-1 leveraged bets, and when the SNB did something unexpected ( an act of fiscal sanity in the face of world-wide Keynesian idiocy ), they all lost their fucking shirts.
Screw them, and the horse they rode in on.
Vultures are already flying around FXCM, Alpari and the rest. IG Markets, Jeffreys, Tickmill. This industry will face huge consolidation over the coming months.
Tickmill is seeking to acquire client portfolios of FX brokers
Tickmill
announced today its readiness to buy client portfolios and assets of FX brokers who have run into difficulties due to recent market events related to record Swiss Franc volatility.
With a strong capital base Tickmill is looking forward to seize this historic opportunity and significantly increase its client base and market share.
The management was able to foresee recent Swiss Franc developments. As a result, the company was not affected by market moves thanks to the excellent risk management systems and Tickmill’s directors, who have over 15 years of experience in the FX industry.
Tickmill stands strong to onboard unlimited number of new clients and is also able to absorb FX brokers who lack sufficient capital for operations.
Same from IG:
LeapRate has learned from industry sources that leading UK spreadbetting broker IG Group Holdings plc (LON:IGG) is looking to buy forex brokers and/or their client lists in the wake of yesterday’s heavy losses suffered by many in the industry.
IG itself reported £30 million in Swiss Franc trading related trading losses with clients. A large amount for sure, but not all that significant in the grand scheme of things for IG – according to IG’s last results presentation in July 2014 they held over £400 million in cash reserves. IG did £370 million in revenue and £195 million in pretax profit in its most recent fiscal year (ended May 31, 2014). So again, £30 million is a lot of money but not something to be too concerned about.
Essentially, IG is looking to acquire the client list of brokers which are unable to meet their regulatory capital requirements. The first official FCA regulated broker to declare itself insolvent was Alpari UK.
We’ll keep tabs on this story, and all the Swiss Franc volatility fallout, as it develops.
Why would you say that Tickmill and IG Markets would be interested in that shit called Alpari?
One thing is for sure, these brokers will gain a lot of market share over the coming weeks as a lot of the dinosaurs like Alpari, FXCM, Excel, etc are becoming extinct.
i lost a pound off my scranny ass laughing.
financial pain by the insiders is as hillarious as it gets.
now it is whine and feel sorry for me time.
fuckem, jumpers yet?
you might suspect i have zero respect for the financial community.
a few exceptions, mainly people like cog dis, who left on his terms.
We bankrupted some folks.
.
No risk no reward asshat.
Leave the taxpayer alone or I will be more than happy to take your motherfucking head.
MDB's satirical intent flew right over your head, didn't it?
Automatic green arrow now whenever you show up MDB.
carpe diem MDB, your still alive
Anyone else think this is just the first shot across the bow? Or are many of you thinking this is the big deal, and it will cause the problems? I'm thinking it is just the first domino, some people get taken to the cleaners, and then when the dust settles...another currency/country has to go tits up.
Glad to hold arable farmland, weapons, a skill set, and some gold and silver.
Ok, I have decided as a longtime member of the fight club I am now throwing my hat into the ring for president of MerKa. My platform is simple. i am a believer in the KISS system and I have an answer to all questions and a solution for all problems. To everything that is a concern i say "fvk u we will bomb ya." You want QE? Fvk you we will bomb ya. Some ole granny concerned about social security? fvk you we will bomb ya. school bus has a flat tire and is holding up traffic..fvk em bomb em. Too many fat ugly dumb fvks in the line at walmart..bomb the steenkin pieces of pigshit.
Now, you damn well better give generously to my campaign.
there is one little qualification .............. the big secret is that the elites decided they had enough, and now only members of their family are allowed as president. obama actually IS a member of their family. you can tell who is pretty easily. you see guys the media keep promoting as pres candidates, some of the buffons are there to just make sure the family buffons dont look so bad.
Let me get this straight.. you are saying that the election process is rigged? I am shocked! Next thing you are going to tell me is the news on teevee is lies? I just dont think I could handle that red pill. 2 jets DID knock down 3 buildings damnit!
The plus side is that america is the new rome, and you live there. If you have a beef about ownership, why bother with that? Notice in 1492 columbus claimed the us. First dibs and all that. Look around, it aint so bad. George bush said, the constitution was just a piece of paper, I did choke on that one, but I already knew the score. santa, easter bunny, and so many more, oh well, growing up seems like the wrong term, but I think it means, over time, just seeing things as they are. Sorry I started this above, but last night zero h. had an article about doomsday and it wierded me out. Ill shake it off, https://www.youtube.com/watch?v=yR8FvDDhBv0
Is that you Hillary ?
+1 more for the ALL CAPS RANT, and the selective BOLD print. Well done.
MDB is even better after watching jim cramer in a meltdown: www.youtube.com/watch?v=SWksEJQEYVU
Same as the 2008 crisis...they don't give a shit about the little people, all they care about is their rich banker buddies. Haven't you figured that out yet dipshit?
They gave you Affordable Health Care, they're working on fixing it all, baby, fret not! (yes...sarc)
The hatch is a Corzine as "Retail client funds continue to be segregated in accordance with FCA rules." Segregated into someone else's hands they mean.
This is bullshit!! There's fucking no way that traders should have to take losses like this just because some fucking moron at the SNB decides to abandon their comittments. What the hell is this world coming to!?? It's fucking not fair. WHAT IS THE GOVERNMENT DOING ABOUT IT?
They don't have to do shit my friend. So the SNB elephant just squished a million fleas when it brushed up against a tree.
You gotta be a smarter tick..
I traded Forex for three years and become quite successful at it but on average it has a 90% failure rate, and in the end blew my account up several times. In the end if your account has 100:1 leverage you only every put up at most 5% of your equity on the table - sorta like having a big pile of chips and only playing 1 or 2$ at a time.
It's just the way it goes.
The purpose of the little guy is to be looted. Period.
He's playing.
"In the end if your account has 100:1 leverage you only every put up at most 5% of your equity on the table "
yes. but the rest, most of the 95% you are risking is, strictly speaking in our banking environment, OPM. Other People's Money
oh, that means mine and that of the other people reading here. and that's too just the way it goes
so Ghordius.....ask this, where are the lenders who lost billions yesterday? the investors who put up the 99% of the 100/1 trade? Why aren't they in the news?
investors? why "investors"? as far as I know, they are banks. megabanks, usually. perhaps we'll hear about at the next quarterly results
It's made up money. Only the banks ever owned it.
This is the first time in years I've seen MDB post twice in the same thread (s/he exhibits remarkable self-discilpline by never responding to zealous attackers) AND posting a thread in ALL CAPS. Thank you MBD for brining a smile to my face more times than I can count.
Amen to that.
I'm waiting for the sarc off…
Thumbs up MDB, I haven't seen you around for a bit...
Damn MDB, twice in one day and thread? Almost better than sex.
I think you need a new partner my friend
Agreed. Or perhaps Kama sutra and a good scotch.
Miffed
Who are you, and what have you done to the real MDB?
I've heard this same 'tone'...in a book, by a lovely lady in the 1950s. You just need a gold dollar sign my friend, to make this complete!
dude you're my hero... especially the "not fair" part... they do sound like my kids after I catch their ass doing something they aren't supposed to be doing... lol perfect
I've learned something from that:
NEVER TRUST CENTRAL BANK AND POLITICIANS MESSING UP WITH FREE MARKET FORCE !
We have now a proof of an epic fail in economic statism and Keynesian policies on biblical proportion.
Lesson learned for life.
I've learned something from that:
NEVER TRUST CENTRAL BANK AND POLITICIANS MESSING UP WITH FREE MARKET FORCE !
We have now a proof of an epic fail in economic statism and Keynesian policies on biblical proportion.
Lesson learned for life.
Would this leverage even be possible if it weren't for the FED and the debt/money creation process?
This is not a rhetorical question....who is the lender of the 99% in a 100/1 leverage trade? or 40/1...or whatever?
the loans are not real--they are credit --(borrowed zeros) tansfered from balance sheets that use "mark to fantasy" priced rehypothecated collateral.
the money is only real when you open an account with your operating capitol or they take your deposit on margin call ---
I wpould say the SNB has looked after it's own country first by de pegging the CHF , they must see that there is a currency crash coming and they want thier currency not to be affected a great deal when it happens so the swiss economy we keep functioning when all others do not , a smart move .Deal with a month or two of pain and then sit back with some swiss pop corn and whatch the rest of the world fall appart.
Any Participant @ 100:1 is neither Skilled, nor can rely on Luck.....
Rather Fool, Gambler and Arrogant come to Mind......
Leverage and and its excess is akin to driving down a bumpy road full of Nitro; you hit many bumps and nothing happens, but the one blows it all up......
You have to be a Sorcerer to win ...
http://youtu.be/TqNY3KXbgi4?t=2m5s
Stupid question.......If all these people lost all this money, who won it? Where did it go?
The winners were the people who took the other side of these bets.
When you go long on a currency at 100-1 leverage, and the currency drops 1%, your position is sold, and all your assets have to be taken to cover the shortfall.
When you go short on a currency at 100-1 leverage, and the currency rises 1%, your position is sold, and all of your assets are used to buy enough of the shorted currency needed to pay back the people that lended you that asset to short.
Futures and stock markets try to pair up long and short investors so that one wins, the other loses, and the house remains solvent. If there is a bettor imbalance, or the house is betting as well, the house can go bankrupt. This is when people like Hughes at Alpina start whining for bailouts, and accuse the SNB of being somehow amateurish.
Always place your stops first.
Not rocket science and not difficult.
"Where will all the good paying jobs come from now????"
As of yesterday, FX hedge funds companies employed thousands of people across the world., a number that’s more than tripled from a decade ago, but as Bloomberg reports, thousands of FX hedge fund workers are now getting their pink slips as the Swiss franc have surged to less than 1.2 CHF to a Euro. "For the hedge fund industry, it’s scary," explains one wonk, adding "I was blind to the ups and downs associated with the industry." Can we blame him, watching business media and one could be forgiven for believing this surge is "unambiguously awesome."
As Bloomberg reports
Stunned by the sudden surge in the price of the CHF, FX hedge funds have increasingly resorted to layoffs to cut costs since yesterday, shocking a new generation of workers, like Osakwe, unfamiliar with the industry’s historic boom and bust cycles.
Workers who entered the holiday season confident they had secure employment in one of the country’s safest havens now find themselves in shrinking workplaces with dimming prospects.
As the following anecdotes illustrates, more than a few hedge wonks are becoming greatly disillusioned...
Sean Gross, 35, was over the moon when he secured a job in March last year at SuperDuperLeveraged Hedge Fund Ltd., the world’s 25th largest FX hedge fund. He’d been laid off from a technology company and saw the FX business as his salvation.
“I was happy. My life was starting to take shape. Life was really, really, really, really good,” he said. Now I'm scared.
By yesterday, Gross said talk was spreading through his NYC office about people losing their jobs “left and right.” Old-timers were suddenly retiring. Yet Gross still thought he’d be okay working in information technology far from the boiler room.
As a newcomer to the energy industry, he didn’t realize how surging CHF prices would ripple through the company. He’d made it through another unsettling day and was in the parking lot, buckling on his motorcycle helmet for the ride home, when he looked up to see his boss running after him. “Hey Sean, I need to talk to you in my office.”
“Oh God, here I go again,” Gross recalled thinking as his boss delivered the news that he was getting laid off.
There’s no firm number yet on how many FX workers are losing their jobs, or how many more cuts might be coming... some are well known like ‘Leverage Unlimited’ and ‘FX 'R Us’ but other companies have announced layoffs, but many are making the cuts without public fanfare.
As the following comments from FX sector executives notes, things do not appear to 'stabilizing'
“We are constantly in the process of trying to right-size our company,”
“We do anticipate a continued downturn in domestic hedging activity.”
...will continue to make adjustments to its workforce “based on current business conditions,”
“While these reductions are difficult, we believe they are necessary to work through this challenging market,”
* * *
Still unsure whether to 'believe' - here is some data... it's not just about the FX sector workers... they are the highest paid workers of the new normal and the multiplier effects are clear...
As the CHF started to surge, Switzerland was the first to show decoupling from the broad worldwide picture. Then as the surge accelerated, both NYC and the other major financial hubs saw big surges in initial jobless claims. This is now bleeding over into the broader US jobless claims data...
We leave it to industry workers to sum it all up:
“When the CHF price goes up, everything happens quickly,” Beaton said.
As industry analysts and consultants increasingly predict that high CHF prices could linger for years, laid off workers face a workplace where their chances of getting rehired by an FX trading company are remote. Many don’t plan to even try.
“I’m pretty much decided I’m not gonna do this FX thing again,” Brewer said. They were mean to me.
"Unambiguously bad"
awesome rewrite
About which bit though?
http://www.zerohedge.com/news/2015-01-15/thank-snb-truth
The Rothschild shills said the same thing when President Jackson took the US Central Bank out behind the Capitol building and shot it.
Tao 4 the Show, I don't understand your point there: "Guys like Ghordius kept saying, "their business, nothing to see here". But this is wrong. Moves by central banks affect us all. "
I simply defended the right of the SNB of having that floor, and pointed out the disadvantages of leaving it, while pointing out the reasons why it had it. Now I defend their right to take it off
Of course what central banks do affect us all. As Nixon was paraphrased: "it's our currency and your problem". And a big problem, by that
"The real reason will be that they must be criticized in order for the media/established order to cling to some semblance of feign confidence in the CBs."
I agree. and yet... I maintain that's an American problem, specific of the FED. in Europe we have a different CB tradition, more similar to that of the SNB
Well then, maybe I misunderstood and we agree on this. However, the complexity of the world excludes the idea of one bad guy (e.g. your "American problem"). I can go along with loads to criticize there, but come on, psychopaths the world over are on the march. Have you followed the UK elite pedophilia news? No, it is not related to the subject at hand, but it does show the level of corruption the world over.
I know you are a big Euro cheerleader. However, there too lies corruption. No need to argue about it now. Maybe we can get together for a beer when all sorts of currency chaos hits. Who knows what we will buy the beer with or if there will even be a beer to buy.
corruption is everywhere humans are. the question is how much
"...confidence in the whole fantasy of CB omnipotence is shaken " - I completely agree, and yet... no european I know of was ever beholden to a fantasy of CB omnipotence
for criminy, we banded our national banks together because they were not "potent" enough, alone. the ECB is practically a proof for our belief that they aren't omnipotent
Is that you, Soros? Who wanted the Euro? Who wins? Please expound.
Oh I'm SHOCKED so SHOCKED! /Sarc
I'm already disgusted, in advance, of the media rethoric that will build in the coming days.
/gone boating with my gold
"Their industry really needed it to avoid devastation by money coming in driving the CHF up. "
The Govenment allowed, and the Banks took, the foreign money in.
The Swiss govenment did not have to allow it in and the Swiss Banks did not have to take it in.
Bureaucrats and Banksters did what was best for them and the rest of the Swiss economy be damned.
What is so hard go understand about that?
OOOPPPPSSS!!!!
CPI drops most since 2009 recession:
http://www.forexfactory.com/#graph=57894
You best start believin' in deflation; you're in it!
Shit gets cheaper? I don't have a job contingent upon exponential growth? Excellent.
Bring it on.
I know, right? all that cash I have on hand can buy more shit now and I don't have to eat risk chasing 8+% YOY returns just to tread water? oh woe is me...
Wont last. The Treasury and the Fed will not tollerate deflation. It makes the US Debt too expensive.
Nowhere is price deflation evident at the moment. Even fuel has nothing to do with deflation and is strictly a supply and demand issue. Homes still high, food still high, electronics still the same price as last year. Cars are more expensive. There is absolutely no evidence of lower prices for the consumer anywhere nor imo will there be. Too many hands on the levers to allow it.
Here in France we start to feel Gasoline deflation and let me tell you something: it's good, very good, consumer are happy.
We all knew it was only a matter of time before something cracked, card fell, domino dropped, what ever metphor you want to use, this shit show is going down.
Nah, this is just a prelude. The real show will start later after deflation impacts and draws significant blood. Then the CBs will ride in on a paper horse and make it mf'ing rain. They cannot give up and let this all boil over. They will try and try until there is no more ink.
They will continue to do things that push us further and further away from reality, so that once we crash back to reality, it will likely be too late. 2008 was our big chance to adjust how we do things and soften the landing. Instead, we have had more and more malinvestment shoved down our throats and have gone higher than we initially were rather than softening the landing. What happens when the status quo gets more and more costly to maintain, and you fail to adjust by abandoning the status quo? You burn up all of your capital, and despite warnings that what you are doing is unsustainable, everything looks like it can keep on going, then you hit a Seneca cliff, from which you cannot recover because all of your capital is gone.
Wonder how much of this is tied up in derivatives?
Dude. That is ugly talk. One crisis at a time.
Ain't like this stuff is related. I'm sure there is a firewall...or contagion protection team to keep it from going zoonotic.
Full extent of the damages embedded in forwards/derivatives won't be known for years...
The big news about the SNB move is this:
Reality has not been canceled
Well that FXCM ad is one less ill ad I'll see on these pages
SNB was a symptom and not the cause
THANK YOU! All this bullshit about how the SNB was "irresponsible" is complete horse shit. SNB didn't have a retail forex margin trading busnisses model. SNB didn't cause political instability in the EU. SNB didn't influence UNPRECIDENTED ongoing central bank interventions on an ever increasing scale. Interventions, pegging, operation twist ect. are all failures in principal because you can not control what other CB's do to counter act what you do. This is why the whole "they should have signaled this move" is bullshit. In combat sports that is called telegraphing. It gets you knocked out quickly. Imagine central banks like light switches that control one light. You have control over one switch. There are 5 switches. They all start down. Some one wants the light on so they flip thier switch up. You want it off so you switch yours up. The light goes off. U,U,D,D,D. Now remember you want the light OFF. But you only control one switch.
Damn those "anti-social" Swiss.
/s
Crashes 90%
Is it 91% that qualifies for "blood in the streets"?
Blood in the streets is when you're supposed to buy. Are you buying?
Not that crap......not yet.
Been buying gold for decades though.....figured I'd beat the rush.
How soon can we get an S&P chart to look like this?
We could get one that looks like that, or we could get one that is that chart upside down. Either way, it would be a crash. Or we could get that followed by an inverted one. A double-whammy crash.
At least the word crash has been used correctly here. This is not minus 2.6% or minus 15%, no minus 90%.
Moar like a Black Pterodactyl at this point!
And no, It's going to be REAL blood this time.
Who knew markets had risks???
It's not fair. The CBs are just supposed to keep printing. Everyone knows that!
BTFD. Said in jest but loads of muppets will be doing it!!!
Get SRTY.
I didn't cry when Ceaser's Palace got in trouble, so why would I care about this casino? they are all run by mobs that have no moral compass.
Just a trial run here folks. The next central bank to bust loose won't be giving any warning either. Makes shearing the sheep that much more efficient.
When ze Germans pull ze plug from ze system...bowels will loosen all over ze world. Ja!
One word sums up this article: OUCH
typical marriage sex chart...
You do know the two are mutually exclusive..
charts and sex?
me and the mistress get busy on my desk with charts everywhere, so no, not that.
No, The other two.
But f charts and sex sex go together for you.. There's a problem.
That steep downslope... that's when menopause kicks in...
Nope, childbirth. Menopause can kick off horny times, hence the need for Viagra after your penis has finally given up fighting the good fight.
Gambling w OPM is a bitch, margin calls abound
Well, I do my bank run later today.
Also Swissquote in trouble:
25 million CHF provisions....
The question is: Is that a certain percentage that they don't expect to get back from bankrupted clients? What would be the total "negative balance" of "the clients"??? 100 million CHF? 250 million CHF? Interesting...
And put 25 million CHF provision in context with 145 million CHF "record" revenues and pre-tax profit of 28 million CHF for 2014...
http://www.swissquote.ch/sqw-group-resources/doc/pdf/press/press_release...
Call Jon Corzine ASAP.
spread contagion spread!
Those f*****s must have been mightily levverrred up.
Credit up the wazzoo!!!
THE DANSE MACABRE OF THE CURRENCIES HAS BEGUN.
begun? that dance has a new tune since 1971
Buckle-up !!
Double-0 bitchez...they do come along every now and then.
they'll be coming for the livingroom set next.
Lots of stuff to get repoed.
Of course, Bill W was a high-flyer, and the Depression caused him to abandon hootch and form AA, so maybe something + will happen.
I am sad for them, becuase they were doing God's work and provided so much to the economy.
Exactly. Investors around the world are extremely unhappy about SNB's actions but not one of them is concerned with future generations of Swiss that would have had to pay to buy Draghi's new QEEUROS.
It seems we are all going to die.. It was nice hanging out with you guys but now starvation has become a concern so i must ready my long pig pit cooker in the back yard. Bankers taste like chicken once you render off the 300 pounds of lard.
Chicken huh? I would have thought the pigmen tasted like pork.
The pigmen don't eat pork. Chicken flavored bagel after the rot and fat is rendered. The longer and slower/painful they die also makes the flavor better.
According to all accounts that I have ever red, homo sapiens taste like pork. One of the cannibal tribes ate 'longpig."
How many times does it take for peoplke to learn there are NO one-way "safe" trades. Maybe now they'll listen to common sense, but I doubt it. I hear J. Corzine is available to all of these firms for "consulting" advice.
www.traderzoo.mobi
I went short on them yesterday at another broker.
Hope that one holds.
I wonder how many calls are going to voicemail today...
That's going to leave a mark.
Megatrillions in matched book FX derivatives suddenly become unmatched. Oops.
The suffering has only just begun.
Bullish for Guido's gambling collections bizness !
Gee ...who would have guessed you can lose your shirt trading currencies ?
It's almost as if moar chaos were part of some grand plan.... almost.
FXCM traded 2x volume the day before SNB, prob due to the metrics they released, but still, makes one want to wonder ;)
FXCM traded 2x volume the day before SNB, prob due to the metrics they released, but still, makes one want to wonder ;)
they clearly advise their client to make that trade ...
https://www.youtube....Zs3LpCKxw#t=205
To bad ... They said "short chf/eur cause BNS will buy euro because they do not validate the réfereundum on gold " Sick fail ...One would think that stock markets would be crashing big time because these investors should be selling stocks to cover their margins but that doesn't seem to be the case. Sounds like a bunch of deadbeats.
What if Ole Yeller is the one who actually owns the stawks?
Would she sell in a panic?