This page has been archived and commenting is disabled.
Spot the difference...
Chart: Bloomberg
- advertisements -
Contact Information:
Tips: tips [ at ] zerohedge.com
General: info [ at ] zerohedge.com
Legal: legal [ at ] zerohedge.com
Advertising: ads [ at ] zerohedge.com
Abuse/Complaints: abuse [ at ] zerohedge.com
Suggested Reading:
Make sure to read our "How To [Read/Tip Off] Zero Hedge Without Attracting The Interest Of [Human Resources/The Treasury/Black Helicopters]" Guide
It would be very wise of you to study our disclaimer, our privacy policy and our (non)policy on conflicts / full disclosure. Here's our Cookie Policy.
It´s clear, the Suiss Franken is absolutely overvalued now. If it stay at 1:1 to the Euro for longer the Suiss economy will be dead.
some one had inside info last week when it comes to the DAX otherwise Germany and Europe would've been in the water today
Wolferl - Yes, big hit to the Swiss economy. But I see it as an enormous shake up, not a death blow. The Swiss are diligent people in their own way, but also massively oriented towards vacations, high salaries, and an easy life. This will hit hard.
All over CH, there is construction and real estate investment. Everyone was looking through rose colored glasses. Now, they voted the way the SNB wanted (on the gold referendum) and then days later got screwed by the very same central bankers. Count on fear and gnashing of teeth.
But how will the CHF go back to the 1.2 level or something similar? It took a central bank to hold it there. What will hold it there now, especially when the ECB may monetize? Devaluing the CHF will have to wait for the repercussions to the Swiss economy. That will be the signal for people to take money out of the CHF.
CHF has been stronger than the dollar for a long time. I don't buy the argument that a strong currency is bad. You have more purchasing power, their exports are not competing with low priced crap but rather the high end niche. I think they'll be just fine after the shakeout.
But we'll see, I haven't picked a winner in years despite my fancy book learnin.
The Swiss high end manufacturers that I know were crying that the peg was only 1.2 (when it was set) and were squeezing every franc to make that work.
Sadly, there is much cocaine in the sewage around CH. Probably the amount of blood pressure meds will go up now, too.
"Now, they voted the way the SNB wanted (on the gold referendum) and then days later got screwed by the very same central bankers "
I'm not sure about that. the Swiss gold initiative was about a harder Franc. Well, it just became harder, didn't it?
note one thing: psychological levels. The CHF switched from parity to the USD to parity to the EUR. I suspect that this first market "psychological rebalancing" will keep being persistent
meanwhile... europeans don't believe in the omnipotence of their CBs, and don't expect them to be... reliable (like the FED). I'm not that sure about that "ECB monetization" thing. Last time, everybody expected QE and Draghi presented LTROs
I am not sure about the ECB monetization either, especially not on Jan. 22. Let's see in the months ahead.
I happen to know some Swiss professionals. My sense is that they feel afloat in their non-Eurozone position, while still clinging ferociously to independence. There is a sense of fear in the air as economic matters have generally gone well for them amidst the surrounding problems. Voting against the gold initiative was, IMO, hanging their hopes on the authorities.
But this SNB move will hurt - seriously. Swiss tourism, for example, is already hurting for various reasons. They have lost many European customers due to economic problems and less disposable income. Now CH is a more expensive place. I have a feeling the population is shaken badly at this point and will wait for another chance to talk to my Swiss friends to verify.
too true Tao. Was in lago di Orta. (3hr drive from Zurich) Luxury hotel was packed w/ Suissie's for the w/e all complaining about things from their Suites and biggest BMW's n Benzes i've ever seen while the Mrs and I in our Econolodge driving a Fiat Uno
the upside: ITALY WINNING!
It's only been a day. I don't think anyone, including the SNB knows how this is going to turn out.
I prefer to gauge gains and losses between currencies and stock markets with reference to how much gold could be bought before and after. Therefore the Swiss can buy more gold with the latest move in their currency so who gives a shit about what the DAX has done.
DAX such a powerhouse it is madness. No pure oil energy plays in the index, therefore big car sector, big industrials, export driven, weak currency, low yiel enviroment. This index is the place to be and I told everyone already.
Yeah - but WHO THE HELL CAN THEY SELL IT TOO?
The one question you NEVER ask - because you are not logical, but indeed are proposing a one sided trade for your own convenience.
Will hit 20k in 2016. George knows best!
Maybe. I had a cat that was old and became sick and just when I thought her hours were numbered, she started to eat. My hopes that she would get better but sadly she died. Moral to the story what may appear to be hope in the rally the envitable outcome will still be death...knowing exactly when is not predictable.
I feel sorry for your loss. However we are talking about the powerhouse that the DAX is, and not an old and sick cat.
It was merely an analogy, obviously you could not see that. I could care less if the DAX goes to 20k as it is just a matter of time till it implodes.
Germany has too much overcapacity and global demand is too low.
Where his economics comes from - HE DON'T NEED NO DEMAND - lol!
Who will Germany sell to? No one to buy = no exports = game over for industrial powerhouse. The Oil price should tell you something.
Oh yea? Well my piece o paper is worth more than yours! How can I prove that? I got fancier writing on it plus a sweet picture of a tuna!
Hey Switzerdumbfucks......if you want to devalue your currency just start printing it and handing it out to your citizens...like 1000 Francs each at a shot until it is at the exchange rate you like. Hello?
No wonder the fed makes the dollar trend down.
Why tank your markets for a strong currency
For those who don't get it:
The Swiss index was correlated the DAX because of the EUR peg. Now that the peg is gone the two indexes are independant again. The DAX shows how good its going to be for Germany and its exporters once the EUR crashes next week. The Swiss index shows how f*cked Switzerland's economy and exporters are now that the Franc is going to go thru the roof.
So why is this chart even being shown? Or do they think the DAX is supposed to catch down to the Swiss index? That will only happen the day after the Greek elections.
bullshit
Wow, thats an intelligent response. Why don't you GO FUCK YOUR MOTHER, YOU RETARD CUNT.
Who cares? DAX is priced in Eurubles EURUB
When did debasing a nations currency at the expense of huge unpayable debt become a good thing and maintaining the value and trust in your currency become a bad thing? Congratulations to the Swiss for stepping off the crazy train to hyperinflation.
They certainly have taken a beating for their surprise announcement this week but they are not the first to make such announcements. Japan, China, and Russia are a few in recent months. What makes the Swiss decision such a bad one... because it tanked the Euro. Makes QE for the Euro a much harder sell now with it at 11 year lows against the dollar.
Central bankers would have an easier time convincing the US to come out with QE4 and buy European asset backed securities. Could we see a surprise announcement to that effect? Well SURPRISES seem to be in vogue these days.
Who thinks we stand a chance at paying back that 18 trillion + anyway?
p.s. QE only works when it actually stimulates the economy. All it has done is created a huge wealth gap. That stimulus should have gone towards investing in infrastructure, homes, clean energy, education, training and the future of the nations citizens. Instead it went to the banksters who gladly doubled down. How can this not end badly?