Swiss Franc Plunges On Rumor EURCHF Peg To Be Widened To 1.25

Tyler Durden's picture

To anyone short the USD/EUR-CHF who just went to the bathroom a minute ago, our condolences. The rumor is that the SNB will expand its EURCHF peg to 1.25 tomorrow. Completely unfounded of course. It may just as easily be another forceful intervention round. Or just plain and simple central planner rumor mongering: as noted, Swiss August exports plunged and Hildebrand will take any help he can get.

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HedgeFun's picture

I was indeed just in the bathroom using dollar bills to save money (its cheaper than traditional toilet paper).  Thank you for the update.

Popo's picture

Any bets that another "rogue" trader at UBS just blew himself up on this move? 

Please Dear Lord,  let UBS implode today...

He_Who Carried The Sun's picture

BAH, they're just trying to create some cheap buffer for what is about to hit the market as early as tomorrow.

To make the pair move through rumours is a lot cheaper than actually buying/selling.

Sorry for the shakeout guys.I suggest all stay in the bathroom until next week! ;-)

TheFourthStooge-ing's picture

I was indeed just in the bathroom using dollar bills to save money (its cheaper than traditional toilet paper).  Thank you for the update.

Rumor has it that the new hundred dollar bills will be two-ply, softer, and more absorbent.


DavidJ's picture

Lost some money on my EUR/USD shorts! D*mn you rumors!

Buckaroo Banzai's picture

Whoopee! It's a race to the bottom!

GOLD bitchez!

packman's picture

M******* F*********

Being that I own a bunch of CHF - thanks a friggin' bunch.



packman's picture

Guess I should have seen it coming, given all the other manipulation that's been going on. 

Note to self - even the Swiss cannot be trusted.


MsCreant's picture

There is no where safe from manipulation. Barter with neighbors and friends, build value there? I just don't know. I would just save and be done with it, but knowing what I know about what they do, it keeps me engaged in trying to avoid being stolen from. I hate it.

gmrpeabody's picture

I can't even break even when bartering with neighbors and friends.

j0nx's picture

Most Americans in major cities have neighbors who don't speak English. GL building relationships with disparate cultures, certainly not happening in my hood. We've been screwed 6 ways from Sunday. There is no safe way out.

TheFourthStooge-ing's picture

There is no where safe from manipulation. Barter with neighbors and friends, build value there? I just don't know. I would just save and be done with it, but knowing what I know about what they do, it keeps me engaged in trying to avoid being stolen from. I hate it.

Just give it a little time. Within six months after the big collapse, your dumber neighbors and friends will have either starved, killed each other, or cheerfully boarded the bus to the government "freedom camps."

Just keep your head down during the turmoil and, to avoid raising suspicion, stand in line for any free food handouts (you don't necessarily have to eat it). If you have to interact with anyone you don't know and trust, just act as poor and stupid as everyone else.

"Act like a dumbshit and they'll treat you like an equal." - J. R. "Bob" Dobbs


kaiten's picture

I said before it would happen, and the ultimate goal is 1.30-1.40

Harlequin001's picture

and the great swathes of fiat money continue to move through every asset class on its inevitable way back to gold and devaluation.

so who gives a shit?

gmrpeabody's picture

And Hedgefun.... he was actually in the process of giving one...



Harlequin001's picture

Mathman? Where is he nowadays?

Probably still waiting for gold to fall back below $1,000...

packman's picture

er, I guess packman does...

It's not a huge amount, but still.  One would like try to do something with one's money, rather than stuffing it in a mattress - which is a sure loser due to devaluation.  PM's are great of course but only so liquid, plus I'm a fan of diversifiction (and plus as we all know - PM's themselves are not free from manipulation).

So yeah - I've been playing the FX markets some; not day-trading by any stretch - I've been playing long-term, short the US$, due to the obvious erosion of fundamentals.

Bottom line is - it just stinks to once again see TPB short-circuiting fundamentals, and doing so in a realm that many believed was relatively safe from such manipulation.

On the flip side - certainly this is why gold is up big today.  So I'm not frowning too much.


SheepDog-One's picture

WOW so the Big Fat Greek Default is here, but now its GOOD NEWS! Freakin amazing!

junkyardjack's picture

You'd have to be insane to trade currencies right now.

SheepDog-One's picture

Yea, or anything else really. 

DavidJ's picture

I do it anyway.  It is only a small percentage of our total assets.

firstdivision's picture

I was paper trading some currencies to try out a strategy, and good thing it was paper trading, I would have blown myself up. I'll stay out of FX until the over-manipulation ends.  Even Soros would get owned in this environment.

outsidertrader's picture

When will you give up on this idea that the SNB cap will fail? The last time they capped the currency (vs the DMark in 1978) it worked and it will work this time too. Switzerland is experiencing deflation and is ideally placed to print and sell as many CHF as they need to. This rumour may well be unfounded but if they wanted to move the cap they could.

SheepDog-One's picture

The War of the Currency Printers! Yea it'll all work out fine I'm sure....

kridkrid's picture

currency wars lead to trade wars which lead to real wars.  There is some overlap.

Harlequin001's picture

yes, and real wars lead to fighting which leads to hunger which leads to the fridge. Have a beer and chill...

outsidertrader's picture

My point is simply that the SNB is better placed to print money with less risk than any other major central bank since they are experiencing deflation.

scratch_and_sniff's picture

In at 1.2120 but highly suspect, finger on the trigger should denials surface...

scratch_and_sniff's picture

Looks like that was a rumor to hunt those topside stops above 1.2190, im not sticking around to find out...

PaperBear's picture

Quick someone bring the popcorn, the fireworks are about to start.

Oh and I am laughing my head off.

SheepDog-One's picture

It's now just a hillarious sideshow watching all this....UTTER INSANITY! Total chaos as the standard for Western World economic policy...well all bets are off I guess anything can happen now that we've jumped any and all sanity barriers. Buckle up and try to make it out the other side what else can you do?

wombats's picture

What does this do to the price of Swiss Cheese or chocolates?

SnobGobbler's picture

Square peg.... Same money filled Black-hole... "seriously, 1.25:1 no-call-backs-period".

rubearish10's picture

Can't trade stocks, can't trade crosses, can't trade gold, can't trade bonds. Can't trade, period. No more fun. No more opportunity in an illegitimate world of financials.

SheepDog-One's picture

Yep, we've crossed the Rubicon into the totaly insane dimension...WTF Im just watching from the nosebleed seats now with my best raingear on to protect from this shitstorm coming.

rubearish10's picture

What sucks is, you spend years of schooling and then you work in the industry even longer gaining experience. You understand the mechanics of how and what makes financial instruments move up and down. You also put longer term ideas in place to at least have a chance for survival and at least a moderate to better than average lifestyle. You also, use some side money to entertain yourself using ETS's to make some some winning trades without listening to what they called a stockbroker. Now, all that is virtually over and we find ourselves gathering food, shelter and weapons for what we know believe in some kind of inevitable MAD. man, things are very different than what my mother told me.

AustriAnnie's picture

Then again, its the same as it has always been.  Some watched this country go into the Great Depression, seeing it all coming, and saying the same thing.  The problem is, too much time went by, and people forgot to distrust the game.

From tulips to today, not much has changed when you think about it.  But it still pays to be the one paying attention when things start to spiral out of control.  Better to be aware that "things are different than what my mother told me" than to just be a sheeple, assuming things are just the same.

LawsofPhysics's picture

Yep, next up; "when goods and services stop crossing boaders, troops do" - some french dude.

Dr. Engali's picture

Man that's a big move. I'll bet that blows up a couple robots and makes some fx traders shit their pants.

SheepDog-One's picture

Well I hope it blows something up, because obviously there are no sane people in charge anywhere to put a stop to it all, one financial priest just more crazy than the next, it apparently will just keep growing and spinning more out of control until complete and total implosion of everything...maybe thats what they want.

Dr. Engali's picture

I have no doubt they want to blow it up. They are probably scratching their heads right about now thinking" shit why won't this system blow up"?

FranSix's picture

They're probably having a hard time pinnning delta one losses onto the rogue trader they already caught and having the same difficulty trying to find somebody else to pile the excesses on.

Bicycle Repairman's picture

I doubt the SNB views traders/speculators as friends.  In fact I bet the SNB would like to f#ck them up.  And it appears they can.

AustriAnnie's picture

"obviously there are no sane people in charge anywhere to put a stop to it all"

The people "in charge" aren't the ones that put a stop to their own madness.

Its the people they don't want to be in charge who eventually do.  (People like you who refuse to trade how they want you to is the reason its spiraling out of control)  Chaos is good, it means traders aren't playing in their manipulated markets in the way they want them to.  The act of manipulation itself changes the game.  

They aren't "sane".  And they aren't as "in charge" as they (or we) think they are.  IMO.

Mercury's picture

The Swiss might want to think about printing money and buying gold with it. I have to think about this some more but at least for a while that should ameliorate their currency appreciation problem and build up national wealth reserves (insurance) at the same time.  But even if that having-it-both-ways thing doesn't work out they should take advantage of their currency appreciation and buy up gold anyway (and/or other hard commodities), hunker down and watch the fiat world implode around them.  I mean, Fortress Switzerland is more or less their national core competency - don't go all wobbly now!

  I understand that this could kill their export businesses and outstanding loans to foreigners (if it causes the CHF to rocket further) but in the long term there are surely much worse outcomes that could easily result from yoking themselves to sinking ships captained by foreign central bankers and desperate politicians.  The SNB could later pay out a gold (now much appreciated) or other dividend to its citizens most adversely affeceed by this defensive policy to ease the pain. 

I can think of much worse strategies and I'm sure Goldman Sachs would be willing sell them some.

outsidertrader's picture

All the SNB needs to do is print CHF and sell them, and then use the newly acquired FX reserves to buy gold (if they want to). This will not cause their currency to rocket. Rather it will reinforce the cap.

Mercury's picture

Just printing and buying EUR is what they're doing now. Instead, print and by gold (or other hard stuff) so when the existing currency/monetary system goes  *kaplooie*  the Swiss are sitting on a big pile of real money/resources.  They could then open up infrastructure banks and other venture capital conduits and start lending the stuff out to their citizens. 

Even if that doesn't fly they could spend a couple of generations burning through all that wealth like an Arabic oil principality while they think about what comes next.

outsidertrader's picture

Buy EUR first (in order to reinforce the cap) and then buy the gold. They still land up owning gold but maintain the CHF cap too.