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SNB - Post-Mortem
The Swiss National Bank move to eliminate the 1.2 EURCHF Peg has proven to be a big market/media event. Follows a few random thoughts on how this story played out. Caveat - Some of this is wonkish, some guesses on my part.
The Weekly FX Flows
The FX market has two different types of risk profiles depending on what day it is. The two risk periods are:
Monday through Friday
Friday night through Sunday night
There are risks that the FX market participants face every second of the week. But the risks of the weekend roll are much higher than the Monday through Friday trading period
The developments during any given week may cause wild gyrations in FX pricing, but there is also a very active FX market to lay off, or take on risk. The FX market runs 24/7 from Monday morning in Asia until the close in NY on Friday. From Friday night to the next opening in Asia there is no market to lay off risk.
The fact that there are two different risk periods creates two classes of participants in the FX market. Short-term players who are trying to make a buck, but have no interest in taking positions over the weekend. And those who are taking a long-term view of the world, and are happy to take the risks associated with liquidity over the weekend. For every player who takes a long view there are 20 who only dance from Monday through Friday. The bulk of the actors are squared up for the weekend.
There is a very logical reason for this. Over the past twenty years the vast majority of "surprise" critical steps taken by government authorities have been taken on Sunday evenings. (Devaluations/revaluations, Fannie and Freddie going bust, TARP etc., Plaza Accord, Louver Accord) If you're in the FX Biz you pay very close attention to what surprises may have been released when the markets have gone dark. And depending on your risk profile you want to be square for the weekend.
The SNB broke the "rules". It dropped its bomb on a Thursday. It did it at a time that insured that the NY market was still asleep.
The SNB could have held off for a few days and made their big announcement on Sunday. The amount of gross positions outstanding on Sunday would have been a fraction of the positions that were outstanding on Thursday morning. Obviously, the timing by SNB was very deliberate. They acted in what I consider to be a hostile manner - the SNB was a predator to the market participants. Not very sporting at all.
If the SNB had acted in a manner consistent with how Central Banks/Government make announcements of key changes to policy, the losses incurred by the market would have been far less than what they were. The retail accounts that have been blown away this week would not have suffered anywhere near the losses they did. I would add to this that if the announcement had come over the weekend there would not have been a 20% move in the CHF. The adjustment would have been closer to 10%.
My conclusion is that the SNB deliberately screwed the market, and in the process shot itself in the foot for 30-50 billion dollars. What were they thinking?
Did the 2014 Profits Play a Role in this?
Every January the SNB produces its annual profit and loss results. The surprise in 2014 was the size of the gains the SNB reported (CHF38B) . The headline from this year's profit report:
38B Francs is a huge amount of money. This treasure chest is equal to about half of the losses the SNB incurred when it floated the franc. My question is did the folks at the SNB already know that they were going to pull the plug on the peg on January 9 when they released the profit report?
The huge profit report plays into the story, but I'm not sure if the way it was introduced allows for a definitive conclusion that the decision to float had been made six days before the actual event. My read of these tea leaves is that the SNB was, at a minimum, considering the float on January 9, but had not yet made a final decision on when to act. The "profits" gave the SNB the ammo to take the huge loss. My question - Were the 2014 "profits" pumped up so that it would be "easier" for the SNB to act? I think there is a real possibility that those big gains were largely fluff.
On the SNB communication of January 6th
A very curious element in this is that three days before the float an SNB spokesperson, Jean-Pierre Danthine, had this to say:
"We took stock of the situation less than a month ago, we looked again at all the parameters and we are convinced that the minimum exchange rate must remain the cornerstone of our monetary policy,"
What to make of this? Was Jean-Pierre lying through his teeth when he said these words? Had the decision to float already been made?
I'm 100% convinced that the decision to float was made prior to the time that J.P. spoke. In other words J.P. lied; he was part of a deliberate effort to set the market up to be short the CHF and to cause the maximum amount of pain to the market participants.
I doubt we will ever know the facts on this. However if JP was tied down and water boarded he might fess up to being the guy who deliberately set up the market. I'm as certain as I can be that good old J.P. would not have said these words without the blessings of the head of the SNB, Thomas Jordan. So it is quite possible that this critical lie was set up by the guy who is running the show.
If this is correct, it is a heinous act. I would think that there would be lawsuits if it could be proven that the SNB deliberately set up the market - billions were lost as result of the J.P. statement. (where is that water-board when you need it?)
Jordan Acts Old School Style
Jordan must have read from Paul Volker's playbook. Volker was famous for his "surprises". During those years I was on an FX trading desk. We were always afraid of the "Volker Factor". Markets were under siege by the Fed. As a result positioning was kept light, and market liquidity suffered. The "fear factor" worked to Volker's advantage, but even he would would admit that he was responsible for a great sucking noise in the markets. Volker succeeded, but the costs were very high.
Central Bank communication policy has morphed over the past 20 years. The changes were led by Greenspan who established the concept of 'guidance'. The Fed became more open as a result. By communicating its intentions the Fed was able to steer capital markets in a way that suited it. The strategy of communication was designed to minimize the market shocks of unanticipated policy changes. For the most part, the policy of providing forward guidance has worked. Ben Bernanke took another leg up on the idea of communication as a means of guiding markets. Most other central banks have followed this policy.
But the SNB went entirely in the other direction. On Tuesday it said, "That will not happen", three days later it happened. Thomas Jordan and his merry men at the SNB turned the clocks back 40 years.
There was No Crisis on Thursday
When the SNB established the Peg in 2011 there was a true market crisis going on. In a short period of time the EURCHF fell from 1.5 to parity. The SNB introduced the Peg in the same manner that they have taken it off. It came as a surprise to the market, it caused an immediate 20% jump in the EURCHF. Pretty much the exact opposite of what happened on Thursday. One could argue that if the SNB went "Shock and Awe" when the peg was established, it is equally fair that they took it off with the same Shock and Awe.
BUT - There was no market panic last Thursday. There was no crisis that forced the SNB to act on that day. The EURCHF was trading above the peg, it had been for days prior. The SNB had some bids in the market to ensure that there was no move to the 1.2000 level. The intervention required to maintain the Peg in the days just prior to the float was very small - under 10b CHF.
My point is that there was no compelling reason to act on a Thursday. Therefore the only conclusion I can draw is that the SNB acted in a malicious way. It took actions with the express intent of hurting the markets. It achieved its objectives. In the process the SNB incurred losses that are 50% higher then they might have otherwise taken.
What are the Other CBs Thinking?
As of last Tursday every Central Bank on the globe hates the SNB. Not only did the SNB destroy its own credibility, it undermined the credibility of every other CB. How many headlines like this have we seen the past few day? (hundreds).
I'm convinced that the SNB move has put the ECB (Mario Draghi in particular) in a very difficult position. I expect that we will see markets converging on the ECB in the not too distant future. The empty promises of Uncle Mario are now just that - empty promises. Draghi's job has just become incredibly more difficult - if not impossible.
The Japanese CB is now quaking. They have just observed first hand what happens when CBs take a U-turn. The BoJ has made more promises than any other CB. If the markets come to doubt the resolve and promises of the BoJ then you can kiss off any chance that the BoJ will succeed. A loss of confidence means that Japan will soon slip into another lost decade.
Any CB who is now managing a fixed currency is at risk. Hong Kong, China and Korea come to mind. If (when) any of these CBs come under attack they will face the same fate as the Swiss. The reality is that the global markets are much larger and more powerful than the CBs. What happened in Switzerland will be repeated elsewhere. It's likely that these attacks will happen fairly soon.
What About the Players?
I do feel a bit sorry for those who lost big on the CHF move. I think they were set up, and lied to by the SNB. If the SNB had acted on a Sunday we would not be reading about all of the retail losses. The same is true for the big banks that got whacked (JPM, Citi, Deutsche, Barclays, and the many more will soon be fessing.
But - The losers were idiots! What were those thousands of retail investors thinking? In any market a player must think about risk and reward. The "reward" of being long the EURCHF on Thursday was maybe 25BP. This was obvious as the EURCHF had traded the last three days a few ticks away from the intervention zone. There were caution flags flying. Anyone who thought there was some free money on the table made a huge mistake. The downside risks of the short CHF was at least 100Xs what might have been realized if the SNB had not acted. YOU NEVER DO THIS! Never take a 100 to one shot. To bet $100 to make $1 is just stupid.
The retail brokers providing FX executions for retail have been buried with losses. I couldn't be happier with this result. These clowns were providing 50X leverage to unsophisticated investors who did not understand the risks? They deserve to be wiped out.
There might be a few of these brokers left standing in a week - but I promise you the the days 2% margins on retail FX are over. Want to play in the FX sandbox? Be prepared to put 20% down. There are no profits left with that leverage, so the retail FX biz will disappear for a few years. (It will come back - greed trumps logic every time.)
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Allowing speculators to use borrowed money (or margin) maximizes potential profits (hence its called "leveraging") and maximizes the fees collected by the exchanges and traders.
So the system is put at risk? Don't worry, Auntie Janet will bail it out, and the public treasury is always available if things go really pear-shaped. In the meantime, the profits and bonuses are huge, and large profits have to be generated so politicians and regulators can be "managed".
Betting more than you can afford? Not a problem when betting with OPM.
Rules of common sense? The manipulated/QE massaged markets are so divorced from fundamentals that BTFD is wisdom.
Could it be that the SNB had to choose between Swiss retail and economy, and the Swiss insurers? They may have decided that the retail economy can survive having a few fingers cut off but the insurers are bleeding from a neck wound
But they obviously delayed this until after the gold vote which is sneaky, underhanded, and par for the course for CBs
Up arrow, Bruce. Thanks.
Hildebrand was just trying to make Gordon Brown look good.
Very interesting. Thanks Bruce.
Who were the winners on the other side of the trade?
If the SNB could make considerable profit in a hostile period, I guess they could have when they made the shots.
They would have been stupid not to take advantage of it.
We will see how much. Don't believe the rumors about their losses.
Apple computer has a 750 BILLION DOLARES MARKET CAPITALIZATION.
WHO CARES ABOUT THE SWISS FRANC?
Everyone wants to blame Draghi for nuking the euro? Like he's not acting on orders? Bwhahahahaha.
You're going to get a massive inflation in Europe...indeed they have one already as the bulk of the refining business gets taken out save for I imagine in the Netherlands given the collapse in oil prices.
Yet again..."the Goldman Way prevails."
Germany is crazy to be in on this scheme...but hey, "thats the way the cookie crumbles.". Good luck competing against that ruble.
"So it is quite possible that this critical lie was set up by the guy who is running the show. If this is correct, it is a heinous act."
Yes, central banks can lie to us, but never to each other.
Retribution for forcing Swiss Banks revealing secret accounts, money laundering and tax evasion. Call in Metropol
Sometimes people just dont like each other. When given that once in a lifetime chance to fuck someone, they take it.
In life, sometimes its the simple things that make you happy.
The first guy out takes a beating.
The second guy out....????
In other words, whether the SNB decision was a smart one or not will not be known for a few weeks yet.
Time will tell.
They have some smart financial folks. They weighed the possibilities and made their move. Loved those WWII movies about them, smart wiskey dogs. Everyone of them a marksman.
Long term no exchange rate 'peg' has ever held. Never. It is a question only of when and the magnitude of the 'adjustment'. FX traders are by and large crazy idiots; that is, expecting what is a 100% probablity event to never occur, and then feigning shock when it happens and pointing their fat short fingers at the lying SOB central bankers as if they never lie. "I'm shocked, shocked I say that there is gambling going on here in Casablanca ..."
Very very interesting !!!
Why did the SNB turn hostile to the other central banks ?
This is what I'd like to know.
To me, those crooks used to work hand in hand.
Could it be that Mr Jordan is in fact... a hero ?
The money didn't vaporize. It was transferred from one hand into another.
Herein lies, perhaps the truth...
may be the profit was never there to start with; hence the intent was ...
Much of what you, Bruce, said is interesting and important, but
if Thomas Jordan & the other top SNB leaders wanted to keep
their major policy shift a secret from the other central banks,
then it seems logical that their spokesperson did not have
a need to know about the change. As far as the spokesman
knew, policy had not changed.
More importantly, I don’t believe that the Swiss clumsily shot
themselves in the foot. If the other central banks are upset
with them, then the Swiss deliberately & intentionally took
an action which made it more difficult for the other central
banks to pursue policies that Swiss judge to be misguided.
I agree with the Dead Bear that Mr. Jordan may be a hero.
I don't think the SNB turned hostile. It was the other way around. What was (at the core) the SNB policy objective prior to Thursday?
Simple. They were trying to create an economic edge for the Swiss. But they did that at the expense of their neighbors (Spain, Italy and France). You don't make friends when you have a rigged currency and the other guy is paying the cost.
Substitute 'Swiss' for 'US' or 'Federal Reserve'... My god, it is so unbelieveable that a supposed-to-be responsible market participant would do something in the name of self preservation, abusing the advantage their positions enjoy at the expense of others. Sounds familiar.
Why has CHF been volatile (and appreciating absent intervention) since the beginning of the financial crisis? It's because of speculators and safe-haven seekers who ABSOLUTELY ZERO NEED for CHF in their personal or business lives.
IF the SNB move was calculated as you posit (very un-Swiss) -- MOAR POWER TO THEM. They fucked bankstas gambling with OPM, and people who have no business in F/X to begin with. If the SNB's action drives some of the paper players out of CHF -- it serves the national interest (and the single mandate of stability in the NBA, for the few bankers who still care about the law), as the increased marginal cost to sizable participants of hedging real economic activity is far less than the aggregate societal cost to all those who use CHF as a daily medium of of exchange.
If the speculators and paranoids hadn't initiated a Hank Johnson F/X tsunami there NEVER would have never been a CHFEUR peg. Doesn't the FRB (or the G5 going back to Plaza) rig USD currency for the benefit of moneyed US interests at the expense of the rest of the world?
@Bruce: note, on the FT of today, Wolfgang Münchau's "please ECB, do QE, plenty of it" piece on the commentary section (real title: "eurozone: a strained bond", then he still smarts for not getting his EuroBond)
he writes there "If the ECB, as I expect, opts to keep the risk on the national balance sheets..."
another completely misguided and whacky narrative. the ECB has nothing to say about the national balance sheets. Each EU country has it's own parliament for that. That's fiscal policy, and it's a completely no-go for national banks
what the members of the ECB have, is own balance sheets, the national banks balance sheets
take the Banque of France, as example. it has it's own gold, it's own FX reserves, it's own operations as a fully fledged national bank, it even issues two currencies for African countries and manages their pegs to the EUR, it has it's own SDRs and relations to the IMF and it's own accounts at the ECB
the funniest thing about commentaries on the EuroSystem is how many assumptions are made based on the "it's the same as the FED"
do you know what could prevent the Banc of France or any other member of the ECB to buy national debt, it's own or that of their EuroSystem partners? nothing
do you know what could prevent them to issue a national currency on the side, with or without collaboration of the national treasuries? nothing
nothing except for how flabbergasted many investors, speculators and other market participants would be, after many years of being lulled by the "dogmas of the FED", lulled by neo-liberal practices of the FED of giving "forward guidance" and "trust the FED", which started actually as "don't fight the FED"
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the EUR is now a mature currency fit for the global currency war. what if - caution, here starts speculation - ECB partners decide to float a new French Franc or a new Italian Lira? Imagine the chagrin, the gnashing of teeths in the pits of the FX world... until possibilities are back in their minds
imagine a Bank of Italy buying up some of the Italian sovereign debt using it's own balance sheet or even with freshly issued... Italian Lira. temporarily pegged to the EUR, similar to the French African currencies. Imagine someone selling this EUR debt and wanting the new/old currency, up to the situation we just had with the CHF. Remember that the whole financial computer landscape is even still programmed for those currencies. If the kids... pardon me, FX market participants want more balls to play... well, the old national hags... pardon me, NCBs are perfectly able to provide for balls
what is the best way to prevent some moves? preemption. watch the Germans suddently realizing they are the one of the "major three" without a national currency on the side. Watch them discussing their need for one, and how a national currency in this globalized world would have to be a currency by nationals for nationals, set up in a national frame of needs. perhaps up to EU polities restarting that old discussion of gold-backed national currencies which was thrown out of the window on August 15th, 1971
Awesome post Ghordious. The game is afoot.
you are welcome. careful with that "The game is afoot", though. This "game" is old
The USD was born in 1913, transformed itself in 1933 , aquired global dominance in 1946 and re-transformed itself in 1971
The EUR was born in 1999, but it's components are generally speaking two centuries old, the EuroSystem's NCB's average age
The Banque of France, for example, was set up by... yes, Napoleon, and re-transformed after him through a nationalization
All of these conspiracy theories are well and good but many especially here look for complex theories when a simple problem smacks them in the face. The SNB depegged because of the ruling laid down by the Europen Union Court. This will allow the ECB to print and the SNB could not afford to print to keep up with the ECB's QE with thier peg to the Euro. It is that simple. Nothing more nothing less.
The SNB could not tell the ECB because they would spread the word to EMU countries that may well be playing the forex game. This would definitely been passed to the big American banks and those in the know and they would have bet against the SNB. So it was done by surprise. Good for the SNB bad for those placing bets in the forex community.
I imagine the decision was made back when the German courts ruled on QE. This is all smoke and mirrors. The ruling was so vague and QE may not happen at all as the Germans may stop it. After all there were no guidlines set forth in the ruling and the court handed that off to the sovereign courts to decide for now.
I imagine when Japan has completed its QE and announces it is done then the ECB will start printing in earnest. After all we cannot have all the big CB's printing at the same time. Notice how Japan took over from the Fed!
GCT
I imagine when Japan has completed its QE and announces it is done then the ECB will start printing in earnest. After all we cannot have all the big CB's printing at the same time. Notice how Japan took over from the Fed!
how prescient!
good comment, but I don't agree with the narrative of "someone prints" and "everybody follows cues from the FED". note how the ECB balance sheet has shrunk in the last two years, by one cool trillion
how do you call that? un-printing? de-printing? there isn't even a word for such an unprecedented, nearly unreported move in the ballpark of 1'000 billions, or one million millions EUR
begin rant: "Jordan must have read from Paul Volker's playbook" and "Old School". sure
two sides of the pond. on one, one mighty, unified FED. on the other, dozens of national banks. with a long and complex history of currency wars, currency alliances, currency grids and currency unions
but of course a Jordan has to steal a FED chairmen's playbook. this ties in with the narrative that it's the FED that sets up how a central bank has to behave, what they are and what to expect from them
sure. rant end, read again this part and think a moment... how much of what ZH talks about CBs is actually specific of the FED?:
"Central Bank communication policy has morphed over the past 20 years. The changes were led by Greenspan who established the concept of 'guidance'. The Fed became more open as a result. By communicating its intentions the Fed was able to steer capital markets in a way that suited it. The strategy of communication was designed to minimize the market shocks of unanticipated policy changes. For the most part, the policy of providing forward guidance has worked. Ben Bernanke took another leg up on the idea of communication as a means of guiding markets. Most other central banks have followed this policy.
But the SNB went entirely in the other direction. On Tuesday it said, "That will not happen", three days later it happened. Thomas Jordan and his merry men at the SNB turned the clocks back 40 years. "
+1, UR. But there is a deeper issue, a veritable rot in the way "players" of the financial systems are thinking, nowaday. See here:
"So it is quite possible that this critical lie was set up by the guy who is running the show. If this is correct, it is a heinous act. I would think that there would be lawsuits if it could be proven that the SNB deliberately set up the market "
"a critical lie", "a heinous act", followed by... "lawsuits". That's the neo-liberal language of TTIP, particularly the "IP" part of it
forget about a CB like the SNB being founded on a Swiss national law, operating in that jurisdiction, issueing it's "own product" with a national purpose
the narrative of the "IP" is that who has the credit/money has a right to expect national policy providers to stay put, or stage a lawsuit. this narrative says "if I invest in "country X" I have the right to expect that country not to change any laws, not to do any executive decisions that might effect my profit... or face lawsuits... best at non-national "arbitration" courts (for all matters... private courts)
in this narrative, there is no such thing as national interest, only the interests of the market participants, to be catered to by (non-)national policies totally subservient to the market participants
so of course as long as the CHF was temporarily not made available to "play with", the criticism was on "when can we play with that ball again?" and now that the ball is back in play, the criticism is centered on "did the referee lie to us? can we sue him?" of the kind of "where is the level playing field?" followed by a "which nobody is allowed to change?"
it's a narrative that treats all "markets" as "the Markets, the mighty Markets", completely forgetting that all markets are different, and that the market for CHF has a natural market maker, the issuer of this product or service called CHF, and that market maker is the SNB, and it's policies are operated in the Swiss jurisdiction and under the Swiss national laws, serving the interests of the Swiss polity
It pains me to write this, but (for anything other than lying in its published accounts or sworn testimony before regulators) suing a central bank would represent the pinnacle of corruption of the legal system by the corporatists.
International Trade Law has been going to shit for 30 years now. The Powers That Were should have Vince Foster'd Bill Clinton, or at least never let him out of the Arkansas trailer park. WTO and NAFTA really started the global corporatist supra-sovereignty ball rolling.
In terms of blood lines that need to be extincted - I would put the Clintons somewhere between the Bushes and the Windsors at #1 (the other branches of Saxe-Coburg and Gotha I don't have any beef with, other than ideological). But Clinton - after reading and hearing Carroll Quigley's Bullshit at Georgetown about the fantasies of the elite (natural persons), became the ultimate Manchurian Candidate for the other elite (juristic persons)and triangulated his way into a path they should only have been able to fantasize about... greatly facilitated by all sides were getting more than their fair share when sitting around the negotiating table and no one stopped to ask why? or how is this possible?
You and I had some sharp exchanges on the Swiss peg back in 2011/2012. You stated it was unsustainable. I said the Swiss could hold it as long as they wanted to hold it.
The Swiss were taking hostile actions against the Fed (from whom all QE flows) and the Obama administration (forcing them to open their records) when they institured the peg. It was a very big "Fuck You." to both parties.
The Swiss sent another BIG "Fuck You." to Mario Draghi by removing the peg without the least warning.
Think he got the message?
"You don't make friends when you have a rigged currency and the other guy is paying the cost."
AHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAH!!!
After all the SHIT the Federal Reserve has done - that's hilarious!
Besides ... nations have interests, not friends.
"The Swiss sent another BIG "Fuck You." to Mario Draghi by removing the peg without the least warning. "
interesting narrative, but a bit... unfunded. the ECB never commentated that floor too much. and that floor helped them for certain policies and might help them for others
you could as well say that the SNB has said "Fuck You" to gold, by being again available as "safe haven", and so as alternative to gold
Interesting tangent - you've launched yourself AWAY from Bruce's point and my point in order to say what you wanted to say, but it would have been far easier to make your statement in seven simple words:
CHF is now an alternative to gold.
Now to clarify what you have needlessly muddied.
Bruce's point to which I was responding:
"I'm convinced that the SNB move has put the ECB (Mario Draghi in particular) in a very difficult position. I expect that we will see markets converging on the ECB in the not too distant future. The empty promises of Uncle Mario are now just that - empty promises. Draghi's job has just become incredibly more difficult - if not impossible."
Putting Draghi into the fix Bruce is referring to IS a BIG "Fuck You." from the SNB.
What the ECB said or didn't say about the peg is entirely irrelevant.
The SNB does NOT want the ECB to go down the QE path because it is a POLITICAL move which is FINANCIALLY stupid.
It WON'T help the FPIIGS (the F is silent) and it WILL HURT the Swiss and Germans.
I do find your's and Bruce's points and tangents interesting, and yet... yes, I think you are putting too many eurozone considerations in what was primarily a Swiss move for Swiss reasons, both three years ago and now. and that's was why I found, "oh, well, you can as well throw gold into the fray"
I maintain that the SNB was watching closely two non-eurozone countries during the whole floor years: Hungary and Poland
In Poland, there are still 700'000 houses that have a CHF-Mortgage
In Hungary, the deadline for the state mandated bank conversion from CHF to HUF mortgages is... February 2015
having a million or so of mortgages denominated in CHF blowing up would not have helped anybody
When countries feel threatened..they do things to shore themselves up and prepare for..well. they prepare. The Swiss have been around the block a few times..and I think they are now looking out for themselves.
So the question is: What is the threat?
What is the threat? That the ECB does QQE - and it fails. The Swiss have no interest in being too entangled with the Euro. They have always relished their neutrality and independence.
Not only that, it appears that Mr. Putin has positioned himself to clean up if the EU is shattered. Marine LePen is very very pro-Putin. Russia wants both the EU and NATO gone. The Russians are careful chess players, and they may be able to game events so LePen gets elected in France, and others of the same ilk get elected elsewhere in Europe.
Powerful insight. So the Swiss did this as theey expect Euro QE...or why else?
Ever heard of thieves falling out?
The SNB as an inflation fighter.
Bwhahahahaha. That's a good one.
These 'rules' they are talking about, I want to see them because the law of the jungle needs to be published....
This whole FX market is based on bullshit - central banker omnipotence in creating money bullshit. The Swiss know that and decided to escape from the inevitable collapse that everyone knows is coming. Now all the testosterone-driven masters of the universe, including this guy Krasting, suddenly have become big cry babies because they got slapped in the face. Go get a real job, Bruce, like farming, or welding. Try building something real, instead of your ego.
Yep.
Sorry Bruce, I enjoy your writing, but this piece smacks of sour grapes.
FX Traders are like a bunch of ants riding an elephant, and making side-bets on which way the elephant will turn next.
Last Thursday, the elephant surprised all the ants by deciding to lay-down and take a nap.
Too bad, so sad, for all the ants who were wrong; deal with it.
You make money betting on events? Take the losses when your bets are wrong...
I agree with you. Everyone seems to think that all this unwinding can be done painlessly. Kinda like the reason why dodge-ball is banned from schools: Somebody might get their feelings hurt and that's bad for "self-esteem". Yeah. Maybe the price for actual price discovery in markets is now apparent. And this is just the precursor of the upcoming pain. Let's get this show on the road!