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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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Tue, 09/20/2011 - 08:47 | 1688224 HedgeFun
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.

Tue, 09/20/2011 - 09:15 | 1688343 Popo
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...

Tue, 09/20/2011 - 09:19 | 1688362 He_Who Carried ...
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! ;-)

Tue, 09/20/2011 - 11:13 | 1688828 TheFourthStooge-ing
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.

 

Tue, 09/20/2011 - 08:49 | 1688227 DavidJ
DavidJ's picture

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

Tue, 09/20/2011 - 08:56 | 1688254 Buckaroo Banzai
Buckaroo Banzai's picture

Whoopee! It's a race to the bottom!

GOLD bitchez!

Tue, 09/20/2011 - 08:49 | 1688229 packman
packman's picture

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

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

Aholes

 

Tue, 09/20/2011 - 08:51 | 1688235 packman
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.

 

Tue, 09/20/2011 - 09:02 | 1688280 MsCreant
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.

Tue, 09/20/2011 - 09:23 | 1688370 gmrpeabody
gmrpeabody's picture

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

Tue, 09/20/2011 - 09:39 | 1688423 j0nx
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.

Tue, 09/20/2011 - 11:23 | 1688890 TheFourthStooge-ing
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

 

Tue, 09/20/2011 - 09:34 | 1688411 kaiten
kaiten's picture

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

Tue, 09/20/2011 - 08:50 | 1688233 doomandbloom
doomandbloom's picture

kweku, part deux?

Tue, 09/20/2011 - 08:52 | 1688238 Harlequin001
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?

Tue, 09/20/2011 - 08:53 | 1688243 Harlequin001
Harlequin001's picture

er, I guess packman does...

Tue, 09/20/2011 - 09:00 | 1688267 gmrpeabody
gmrpeabody's picture

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

 

 

Tue, 09/20/2011 - 09:04 | 1688286 Harlequin001
Harlequin001's picture

Mathman? Where is he nowadays?

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

Tue, 09/20/2011 - 12:49 | 1689254 packman
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.

 

Tue, 09/20/2011 - 08:53 | 1688239 SheepDog-One
SheepDog-One's picture

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

Tue, 09/20/2011 - 08:52 | 1688240 junkyardjack
junkyardjack's picture

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

Tue, 09/20/2011 - 08:54 | 1688247 SheepDog-One
SheepDog-One's picture

Yea, or anything else really. 

Tue, 09/20/2011 - 08:55 | 1688251 DavidJ
DavidJ's picture

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

Tue, 09/20/2011 - 09:12 | 1688325 firstdivision
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.

Tue, 09/20/2011 - 08:52 | 1688242 outsidertrader
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.

Tue, 09/20/2011 - 08:55 | 1688250 SheepDog-One
SheepDog-One's picture

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

Tue, 09/20/2011 - 09:04 | 1688284 kridkrid
kridkrid's picture

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

Tue, 09/20/2011 - 09:28 | 1688389 Harlequin001
Harlequin001's picture

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

Tue, 09/20/2011 - 09:04 | 1688287 outsidertrader
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.

Tue, 09/20/2011 - 08:53 | 1688245 scratch_and_sniff
scratch_and_sniff's picture

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

Tue, 09/20/2011 - 09:09 | 1688312 scratch_and_sniff
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...

Tue, 09/20/2011 - 08:55 | 1688248 PaperBear
PaperBear's picture

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

Oh and I am laughing my head off.

Tue, 09/20/2011 - 08:59 | 1688253 SheepDog-One
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?

Tue, 09/20/2011 - 08:58 | 1688260 wombats
wombats's picture

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

Tue, 09/20/2011 - 08:58 | 1688261 SnobGobbler
SnobGobbler's picture

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

Tue, 09/20/2011 - 08:58 | 1688265 rubearish10
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.

Tue, 09/20/2011 - 09:02 | 1688276 SheepDog-One
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.

Tue, 09/20/2011 - 09:48 | 1688453 rubearish10
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.

Tue, 09/20/2011 - 13:08 | 1689318 AustriAnnie
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.

Tue, 09/20/2011 - 09:13 | 1688331 LawsofPhysics
LawsofPhysics's picture

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

Tue, 09/20/2011 - 09:00 | 1688268 Dr. Engali
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.

Tue, 09/20/2011 - 09:04 | 1688289 SheepDog-One
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.

Tue, 09/20/2011 - 09:12 | 1688322 Dr. Engali
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"?

Tue, 09/20/2011 - 09:33 | 1688413 FranSix
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.

Tue, 09/20/2011 - 11:10 | 1688816 Bicycle Repairman
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.

Tue, 09/20/2011 - 13:14 | 1689349 AustriAnnie
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.

Tue, 09/20/2011 - 09:01 | 1688274 Mercury
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.

Tue, 09/20/2011 - 09:07 | 1688300 outsidertrader
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.

Tue, 09/20/2011 - 09:20 | 1688328 Mercury
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.

Tue, 09/20/2011 - 10:53 | 1688725 outsidertrader
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.

Tue, 09/20/2011 - 09:03 | 1688277 equity_momo
equity_momo's picture

BOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOM

Talk about desperation. I can even smell Central Banker sweat from my Igloo hideout in the Arctic.

Tue, 09/20/2011 - 09:33 | 1688410 eurusdog
eurusdog's picture

First intervention good for 1200 points, second intervention good for 140 points and its already half retraced. Looks like they really have the market very convinced!

Tue, 09/20/2011 - 10:58 | 1688747 outsidertrader
outsidertrader's picture

As far as we know there has been no intervention. The announcement of the cap cost CHF bulls 1200 points and today's rumour (not intervention) cost them another 100 points or so. How much would you need to lose to be convinced?

Tue, 09/20/2011 - 10:39 | 1688666 msmith
msmith's picture

The USD is set for higher levels once Bernanke speaks tomorrow.  EURUSD http://bit.ly/qokwK8  AUDUSD http://bit.ly/nN3SrN  USDCAD  http://bit.ly/ncvFDL

Tue, 09/20/2011 - 10:41 | 1688674 msmith
msmith's picture

The USD is set for higher levels once Bernanke speaks tomorrow.  EURUSD http://bit.ly/qokwK8  AUDUSD http://bit.ly/nN3SrN  USDCAD  http://bit.ly/ncvFDL

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