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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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Thu, 08/04/2011 - 17:12 | Link to Comment Josh Randall
Josh Randall's picture

Run Run, Run for the Roses

Fri, 08/05/2011 - 01:49 | Link to Comment Spirit Of Truth
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.)

Thu, 08/04/2011 - 17:11 | Link to Comment ReallySparky
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.

Thu, 08/04/2011 - 17:18 | Link to Comment the tower
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.

Thu, 08/04/2011 - 17:27 | Link to Comment ReallySparky
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. 

Thu, 08/04/2011 - 21:52 | Link to Comment hardcleareye
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......

Thu, 08/04/2011 - 22:18 | Link to Comment Jack Napier
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

Fri, 08/05/2011 - 00:42 | Link to Comment Oh regional Indian
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.


Thu, 08/04/2011 - 22:23 | Link to Comment NumNutt
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.

Fri, 08/05/2011 - 07:09 | Link to Comment HedgetBedgadget
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.


Thu, 08/04/2011 - 17:31 | Link to Comment nodhannum
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.

Thu, 08/04/2011 - 18:02 | Link to Comment Whalley World
Whalley World's picture

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

Thu, 08/04/2011 - 18:02 | Link to Comment Whalley World
Whalley World's picture

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

Thu, 08/04/2011 - 18:34 | Link to Comment Praetorian Guard
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.

Thu, 08/04/2011 - 21:00 | Link to Comment bayoutrader
bayoutrader's picture

Is that Sparky The Clown?

Thu, 08/04/2011 - 20:43 | Link to Comment Freewheelin Franklin
Freewheelin Franklin's picture

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

Thu, 08/04/2011 - 17:13 | Link to Comment traditionalfunds
traditionalfunds's picture

This is Bear/Lehman replay starting not Greece drama.

Careful out there.


Thu, 08/04/2011 - 17:19 | Link to Comment mynhair
mynhair's picture

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

Thu, 08/04/2011 - 17:21 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

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

Edit:  Maybe I spoke too soon.

Thu, 08/04/2011 - 21:15 | Link to Comment MrSteve
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.

Thu, 08/04/2011 - 17:21 | Link to Comment Fieldyza
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.

Thu, 08/04/2011 - 17:23 | Link to Comment Franken_Stein
Franken_Stein's picture


Oh my God !

We are all gonna die !




Thu, 08/04/2011 - 17:24 | Link to Comment PicassoInActions
PicassoInActions's picture

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


Thu, 08/04/2011 - 17:27 | Link to Comment FoieGras
FoieGras's picture

I love EURCHF. Parity here we come.

Thu, 08/04/2011 - 21:08 | Link to Comment WmMcK
WmMcK's picture

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

Thu, 08/04/2011 - 17:45 | Link to Comment chump666
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

Thu, 08/04/2011 - 17:48 | Link to Comment CrashisOptimistic
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.

Thu, 08/04/2011 - 17:54 | Link to Comment chump666
chump666's picture

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

Thu, 08/04/2011 - 17:59 | Link to Comment Reptil
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!"

Fri, 08/05/2011 - 01:02 | Link to Comment Jorgen
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...

Fri, 08/05/2011 - 03:18 | Link to Comment ZeroPower
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.

Thu, 08/04/2011 - 18:01 | Link to Comment swissaustrian
swissaustrian's picture

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

Thu, 08/04/2011 - 18:12 | Link to Comment Strider52
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?

Thu, 08/04/2011 - 18:19 | Link to Comment rockraider3
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. 

Thu, 08/04/2011 - 18:43 | Link to Comment chump666
chump666's picture


Thu, 08/04/2011 - 19:03 | Link to Comment Curtis LeMay
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 ;)

Thu, 08/04/2011 - 19:06 | Link to Comment PulauHantu29
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.

Thu, 08/04/2011 - 19:17 | Link to Comment zorba THE GREEK
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. 

Thu, 08/04/2011 - 20:00 | Link to Comment rockraider3
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.

Thu, 08/04/2011 - 20:44 | Link to Comment hedgeless_horseman
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.  

Thu, 08/04/2011 - 21:22 | Link to Comment pods
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.


Thu, 08/04/2011 - 22:23 | Link to Comment Jack Napier
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.

Fri, 08/05/2011 - 00:41 | Link to Comment unununium
unununium's picture

> Read The Creature From Jekyll Island. 

Hell, read the Fed's disclosures.

Thu, 08/04/2011 - 21:33 | Link to Comment IBelieveInMagic
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.

Thu, 08/04/2011 - 19:20 | Link to Comment GovernmentMule
GovernmentMule's picture

Check AUD/JPN...Nuf said

Thu, 08/04/2011 - 20:15 | Link to Comment chump666
chump666's picture

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

Thu, 08/04/2011 - 20:05 | Link to Comment rockraider3
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.

Thu, 08/04/2011 - 20:49 | Link to Comment Curtis LeMay
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.

Thu, 08/04/2011 - 20:08 | Link to Comment rockraider3
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.

Thu, 08/04/2011 - 20:27 | Link to Comment MAGICWIZARD

well you can wire money that get's posted, atm it, and transfer funds post date.....

Thu, 08/04/2011 - 20:30 | Link to Comment ghostzapper
ghostzapper's picture

Everyone needs to settle down.  Maybe Becky Quick and Joe Kernan will talk about a potential Facebook IPO tomorrow morning and everything will be fine.  Facebook and NFLX will save the global economy. 

Thu, 08/04/2011 - 21:31 | Link to Comment pods
pods's picture

Speaking of Netflix, has Robo finished throwin up yet?

He will reply tomorrow that he was out early last week on Netflix, second mortgaged the house, shorted Dendreon heavily last night and bought the VIX before it shot up.

Now he is kicking back in the Caymans pondering which Greek island to buy.



Thu, 08/04/2011 - 21:12 | Link to Comment caerus
caerus's picture

larry k...breakin da newz

Thu, 08/04/2011 - 23:33 | Link to Comment notadouche
notadouche's picture

Did anyone happen to see the fellow on CNBC this afternoon when the Dow went from 390 to about 350 proclaiming we were about to have a "melt your face off rally, it's happening right now!"  Within less than 2 hours the dow was down 500.  Did anyone get his name and wonder if he will be on tomorrow to see HIS face or his ass because I would have to assume he had his handed to him.  Of course I think it was his famous last words.  Funny all the same, 

Thu, 08/04/2011 - 23:46 | Link to Comment tom a taxpayer
tom a taxpayer's picture

"As to what Sarkozy has up his sleeve" = Christine Lagarde.

Thu, 08/04/2011 - 23:48 | Link to Comment AlephZero
AlephZero's picture

Looking forward to seeing reality finally re-assert itself in the most junked-up market of 'em all.  Dow 7,000, here we come.

Fri, 08/05/2011 - 00:01 | Link to Comment eurusdog
eurusdog's picture

66 points is nothing for this pair. it does that for snacks!

Wed, 09/14/2011 - 04:48 | Link to Comment chinawholesaler
chinawholesaler's picture

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