EURCHF Crashing After Hours On Italian Bank Run Concerns

Tyler Durden's picture

Less than an hour ago, Larry Kudlow tweeted the following: "Sources tell me Italy has to restructure bonds.Deposit run on Italian banks.EU will have to mount Tarp rescue.Big stress on interbank loans." Basically, this is the worst possible combination for Europe which means that another bailout is not only imminent but has to happen tomorrow. Incidentally Reuters is reporting of an emergency meeting between Sarkozy and Merkel and Zapatero on "the markets" which can only mean damage control following today's disastrous Trichet performance. Too bad the markets won't buy it any longer absent some actual actions to back up the deeds. Yet what we are more concerned about is whether or not there really is a bank run in Italy which would be the end of the euro. For that we went to the most trustworthy indicator for European "bankrunnyess" the EURCHF. To our surprise, the pair just plunged nearly 100 pips after hours, after dropping over 200 pips from intraday highs following yesterday's SNB intervention. Will this force the SNB to intervene again? Find out shortly. AS to what Sarkozy has up his sleeve, we will just have to wait and see when the European markets open in about 10 hours.

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Spirit Of Truth's picture

Normally, you stop a bank run with a sovereign guarantee.  But of course, the problem is precisely that the sovereigns are not in any position to be making guarantees. (This was also the problem with Credit Anstalt, the Austrian bank whose failure in 1931 triggered a wave of bank failures worldwide, including the second banking panic that really made the Great Depression, well, not-so-great.)

ReallySparky's picture

All this mayhem is kinda fun to watch.  Thank God for zerohedge and the education provided to me over these few short years.  I am safe and so is my family.  Thank you Tyler.

the tower's picture

No-one is "safe" for what's coming. Don't worry though, we're returning to a sane way of living. I just hope you didn't buy a lot of gold, it's gonna be pretty much worthless. Then again, you would have blown it on other useless stuff anyway.

ReallySparky's picture

I am not worried.  The reason for the feeling of safety is because I am aware of what is going on, and the possible outcomes and therefore prepared.  I welcome a return to sanity, for my childrens sake.  They should not have to bear the burden of their grandparents thoughtless political abdication though eternal tax slavery.  Not sure that I agree with your Gold comment, right about now Gold seems to be standing up pretty well against the market.  My hopes are that there will be more liquidations/buying opportunites before the blast off.  At least people that own gold will be able to sell it/trade it to someone even if the circuit breakers have the markets/banks/internet totally closed. 

hardcleareye's picture

I do not share your view that what is to come will be a "return to sanity".  I see great political instability and all that comes with it, including the increased potential for a global war.

With regards to gold: well to have it worth anything you have to have physical possession, which means you have to be capable of "protecting" it, this also means that when you go to use it people will be aware you have it.....  reading about the economic collapse in Argentina it was advised to get lots of gold rings etc, small things you can trade, easy to carry, that do not draw attention.

I have lived on a sail boat, off the grid, for several years in the Caribbean/south america, and at other times on a remote island off grid.  I know what it takes to be "self sufficient" and not attract the attention of thieves(including the ones with uniforms and guns, I kept the liquor cabinet well stocked for those boys), but I am getting older, female and my physical strength is not what it was 10 years ago. 

I am not looking forward to this......

Jack Napier's picture

Gold is good, but silver is better; the unique properties, the rarity, the manipulation. It's a no brainer. A bird in the hand is worth 10 in the bush. Plus you get the added bonus of crashing JP Morgan, but the Red Shields have already put their eggs over in the new Hong Kong Mercantile Exchange anyway.

Obviously Larry knows what will happen when this tweet hits the net. What ever happened to going to the media with info?

Who's ready to beat the rush? Metals FTW

Oh regional Indian's picture

Agree with Silver being better than gold. But for a while, it's better for one's own health if one is on the buy side of the PM market, because selling is going to hurt a bit.
Overall, all down together, USA Dollear as flight to safety(!!!), like that, till the joke is on the bag-holders.


NumNutt's picture

you are living my dream, lucky I just got the final details on my boat taken care of. If need be I could split tomorrow, south pacific sounds good. But  am going to hang around for a while longer save up more cash and what ever else I can use to barter with. I think going off the grid and being mobile will be a good hedge for what is about to come.

HedgetBedgadget's picture

I'm glad you bought gold.

I plus some of my friends from Eastern Europe, willing to "do whatever it takes to survive" will be waiting for you when you'll head to the market with your gold to buy a loaf of bread for your family. AK47 are cheap, we have plenty of them and lots of bullets. Plus we don't give a shit about americanz with gold and a family to feed. You people consumed the 70% of the oil on the planet for cheap during the last 40 years.

I hope that with the gold you bought, you also paid for some M16 fire use and martial arts self defense classes. And better bring some friends too. Better not have more gold than them, you know the "Sierra Madre" effect.

Anyway, dear American, nice to know you think you are safe with your gold. Easy prey.


nodhannum's picture

@the tower, kan i has some of yo pretty much worthless gold?  I see you are 420 friendly but watch how much you smoke.

Whalley World's picture

In the words of Tom Vu "You are a loser!"

Whalley World's picture

In the words of Tom Vu "You are a loser!"

Praetorian Guard's picture

I agree 100%. Why all the negative points for "the tower" telling the truth? I can tell you this CoG, Contingency, and CooP are ALL COMING in the not too distant future. The shit is about to get real... as in real bad.


ReallySparky - ...and what will you purchase when JiT is gone and goods are as rare as hens teeth? Total collapse, ie total govt shift/control is coming. Everything moves into transition, and this will be a very bad time. Seriously, if you have not preplanned a method to get out of urban environments within 3-6 hours from initial "trigger point" your hosed. Store food, weapons, maps, skill sets, etc. Collapse has always taught nations a lesson - the only difference this time is the method of death - population expansion based on oil, and artificial use of chems for food, mass extinction weapons, etc. - and how prolific it will be.

Freewheelin Franklin's picture

I'd buy chickens, but, I got a thing about chickens.

traditionalfunds's picture

This is Bear/Lehman replay starting not Greece drama.

Careful out there.


mynhair's picture

OMG, did someone from MarketWatch get to touch ZH servers?
What happened?

hedgeless_horseman's picture

Europe will be fine...Heidelbergs are quality machines.

Edit:  Maybe I spoke too soon.

MrSteve's picture

The quality of the press has only a little to do with making money in printing if your market turns to dust.

Which many markets have done: real estate, banking, reference book printing, book printing period, newspapers, magazines, etc, etc. Printing is either packaging or marketing and when all the manufacturing goes overseas, the package printing follows it. This recession -er, depression, has seen small business trim its print spend a LOT, along with corporate print ad budgets. Magazines are so thin the Post Office is going broke.

So the presses are idle while the lease payments are burning a hole in cash flow.

There have never been so many repo'd presses in the used equipment market as there are today. At the big trade shows in Chicago, the press companies have been staying away from the convention floor.

How easy is it to move your Heidlebergs to China or Vietnam? Fine machines, indeed. You must be invested in big iron! Hint to all Looky-Lou's:   keep on looking for opportunity elsewhere.

Fieldyza's picture

I too enjoy watching chaos unfold.

Fortunately I am going on holiday for a few days, so the chaos will just have to happen without my knowledge.

I'll find out all about it when i get, thanks to zerohedge. That is if the world hasn't melted down by then.

Franken_Stein's picture


Oh my God !

We are all gonna die !




PicassoInActions's picture

don't worry guys and gals, BDM will save us


FoieGras's picture

I love EURCHF. Parity here we come.

WmMcK's picture

PT/AU (temorarily) down to 1.04 as well.  BTFD.

chump666's picture

Which will lead to Spain...if the EUR collapses through supports, greece will be told politely to F*** off out of the EZ

CrashisOptimistic's picture

Greece has collected one hell of a lot of money and that money clearly bought nothing for the EU, which was the only reason it was given.

chump666's picture

Greece told to back it's bags is Sarkozy last option, once France's CDS spread blows out to hell

Reptil's picture

what an entertaining play so far!


we've seen act #1 "nothing going on but the rent"

this just now was act #2 "the Lehman routine"

now for act #3 "the banker, his wife, and the printer"

and then after a short recess act #4 "blood and toiletpaper"

followed by the grand finale "hey, look; it's a newborn currency!"

Jorgen's picture

CHF will have its (big time down) day under the Sun, too. There are lots of mortages denominated in CHF in Poland and other Eastern European countries - and
As of this writing CHF:PLN is 1:3.75. The ratio went up almost 18% in less than two months. Polish unemployment rate stands at almost 12% - and taking into consideration the average Swiss banks leverage of 1:29 - - and $200 billion Swiss banks exposure in Eastern Europe - - it ain't gonna be pretty when their loans start going bust there because of very strong franc...

ZeroPower's picture

1) The Polish dont believe in default, and 2) if you think THAT is one of the problem's for a grossly over-valued CHF then you defintely need to look over some macroeconomics 101.

swissaustrian's picture

The only logical step to calm the markets down is to let greece leave the eurozone and go through a bankruptcy.

Strider52's picture

I'm afraid to post a reply - ZH servers also experiencing a slight meltdown. HFT algo's trying to short-squeeze ZH?

rockraider3's picture

What Europe really needs is Harry Reid and John Boehner to fix this mess.  And by fix, I mean exaserbate the problem and claim it was a victory. 

Curtis LeMay's picture

By the way, ZH was shown on NBC Nightly News tonight. Maria Bartiromo was doing a guest interview and during the piece ZH's web-site was shown on the screen, as was Tlyer's name.

Congrats, I guess ;)

PulauHantu29's picture

As another ZH poster wrote awhile back:


"You may not want Armageddon, but Armageddon wants you."


That guy (or gal) had (has)  foresight.

zorba THE GREEK's picture

You can bet your bottom dollar [and I assure you it will be your dollar if you are U.S. citizen]

that Bernanki will back door bail out EU. He did it before and he will do it again, even if it means

sending EU banks trillions. Still most people don't understand mission of the Fed. It is to protect

the money of the super rich of the world, not just of the U.S. 

rockraider3's picture

I don't think he can, even if he wanted to. The debt ceiling was only raised minimally to begin with, I believe TD posted somethign about this a day or so ago.  Like $400B or something.  Bernanke doesn't have enough firepower to do anything substantial for Europe right now, in fact, he'd have to wait until after the "Super Congress" does their thing in Sept/Oct before he could even do any substantial QE here in the US.  I think Europe will need to figure this one out on their own.  Or they could always call China... that is what I am expecting.

hedgeless_horseman's picture

FAILLACY ALERT!  The Fed's balance sheet has little or nothing to do with the debt ceiling.  The Bernank is not constrained by congress. He can and will bail out European banks at the expense of American citizens. Read The Creature From Jekyll Island.  

pods's picture

Correct.  Wasn't it like 16 TRILLION that I saw that the FED floated in 08?  They can print up and "loan" whatever they want. Only thing on the line is their credibility.

Congress is constrained by the debt ceiling, not the FED.


Jack Napier's picture

That doesn't even count all the 400 oz gold plated tungsten bars floating around on their undeclared gold swaps. The Basel Bank of International Settlements is where the central banker's ball is held.

unununium's picture

> Read The Creature From Jekyll Island. 

Hell, read the Fed's disclosures.

IBelieveInMagic's picture

Not quite -- he will do whatever it takes to prop the existing system which vastly benefits the US in terms of consumption way beyond what we are putting into the trade pool... This system has given us about 40+ years of relentless consumption (whether it is ultimately good for us is yet to be determined) although the benefits had been unevenly distributed.

GovernmentMule's picture

Check AUD/JPN...Nuf said

chump666's picture

great ready for a EUR sell  ping pong trade on Asian indexes

rockraider3's picture

Can anyone confirm Kudlow's tweet as being accurate?  or semi accurate?  I've been digging around the internet for an hour trying to find some sort of validation but have come up empty handed.

Curtis LeMay's picture

Not on Kudlow's tweet per se, but I did come across other sources stating interbank lending in Italy essentially frozen.

rockraider3's picture

And since when do people do a bank run in the middle of the freaking night? Even if this is institutional money being transfered out, these wouldn't even be processed until the European/Italian banks open in the morning, I would think.