The man who trades freedom for security does not deserve nor will he ever receive either. – Benjamin Franklin
– Swiss Franc Is Tumbling, Retraces 60% Of SNB Move (ZeroHedge, Feb 18, 2015):
Is the SNB buying Euros to keep the mirage alive that Grexit is “managable”? EURCHF is up dramatically in the last 2 days, retracing 60% of the Swiss Franc’s valuation surge against the USD…
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– Swiss Shocker Triggers Gigantic Losses For Banks, Hedge Funds And Currency Traders (Economic Collapse, Jan 19, 2015):
The absolutely stunning decision by the Swiss National Bank to decouple from the euro has triggered billions of dollars worth of losses all over the globe. Citigroup and Deutsche Bank both say that their losses were somewhere in the neighborhood of 150 million dollars, a major hedge fund that had 830 million dollars in assets at the end of December has been forced to shut down, and several major global currency trading firms have announced that they are now insolvent. And these are just the losses that we know about so far. It will be many months before the full scope of the financial devastation caused by the Swiss National Bank is fully revealed. But of course the same thing could be said about the crash in the price of oil that we have witnessed in recent weeks. These two “black swan events” have set financial dominoes in motion all over the globe. At this point we can only guess how bad the financial devastation will ultimately be.
But everyone agrees that it will be bad. For example, one financial expert at Boston University says that he believes the losses caused by the Swiss National Bank decision will be in the billions of dollars…
“The losses will be in the billions — they are still being tallied,” said Mark T. Williams, an executive-in-residence at Boston University specializing in risk management. “They will range from large banks, brokers, hedge funds, mutual funds to currency speculators. There will be ripple effects throughout the financial system.”
Read moreSwiss Shocker Triggers Gigantic Losses For Banks, Hedge Funds And Currency Traders
– Everest Macro Hedge Fund Blows Up After Nearly $1 BIllion In Swiss Franc Losses (ZeroHedge, Jan 17, 2015):
Yesterday, when we got the first news of huge P&L losses at various publicly-traded banks not to mention the collapse of several retail brokers culminating with the bailout of FXCM by Jefferies, we reminded that seconds after the SNB shocker, we tweeted what was quite obvious to anyone who realized that speculators were most short the CHF since the summer of 2013:
The SNB just blew up countless macro hedge funds
— zerohedge (@zerohedge) January 15, 2015
We also added that “We have yet to find out just which hedge funds were blown up yesterday”, for the simple reason that unlike public banks who have an obligation to reveal news, especially bad, to their shareholders, hedge funds PMs hope to avoid the LP firing squad until the last second. Alas, there is only so long that the day of reckoning can be delayed.
Read moreEverest Macro Hedge Fund Blows Up After Nearly $1 BIllion In Swiss Franc Losses
– The SNB’s Wake-Up Call: Keynesian Central Banking Is Destroying Money And Markets (David Stockman’s Contra Corner, Jan 17, 2015):
It seems everyone was short the franc (CHF) as a matter of taking monetarism at face value. In other words, it amounted to believing the central party line about the economy and normalcy despite the fact that markets have been increasingly pessimistic about it all and actively and aggressively betting against it. Goldman Sachs is just one of many:
– Deutsche, Interactive Brokers, Barclays Lost Hundreds Of Millions Due To Swiss Franc Volatility (ZeroHedge, Jan 16, 2015):
Yesterday, in the aftermath of the Swiss shocker, we tweeted what was quite obvious to anyone who realized that speculators were most short the CHF since the summer of 2013:
The SNB just blew up countless macro hedge funds
— zerohedge (@zerohedge) January 15, 2015
We have yet to find out just which hedge funds were blown up yesterday, but we already do know that numerous retail FX brokers did get blown up and as reported earlier, the largest retail broker FXCM is trading down 90% in the pre-market.And now, thanks to Dow Jones, we start to learn just how much pain the bank themselves suffered:
– Largest Retail FX Broker Stock Crashes 90% As Swiss Contagion Spreads (ZeroHedge, Jan 16, 2015):
UPDATE: Knight Trading 2.0? Jefferies executive are reportedly on-site at FXCM discussing a $200 million bailout
As we first reported last night, FXCM was among the first of many retail FX brokers (and the largest) to see its clients suffer massive losses from yesterday’s Swiss Franc surge following the SNB decision to unleash market forces. There are now at least 4 retail FX brokers (FXCM, Excel Markets, OANDA, and Alpari) who have announced “issues” but FXCM, being among the largest and publicly traded is the most transparent example of wjust what can go wrong when average joes are allowed 100:1 leverage. FXCM is now stuck chasing clients for money they do not (and will never) have.. and its stock is down 90%, trading a $2 this morning (down from $17 on Wednesday). As Credit Suisse notes, time is running out as regulators “tend to be impatient once capital requirements are breached.”
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Got physical gold and silver?
– Global Currency Wars Sees Swiss Franc Devalue 8.5% Against Gold In Week (ZeroHedge, Sep. 9, 2011)
The German constitutional court decision has effectively ruled out Eurobonds which has massive ramifications for the European monetary union and the euro. While promoters of Eurobonds suggest that Eurobonds may still be possible – most objective analysts believe they are now highly unlikely.
The SNB decision to peg the Swiss franc to the beleaguered euro, thereby effectively devaluing the franc, stunned currency and wider financial markets.
It is one of the most significant currency interventions in modern history and led to violent volatility the like of which have never been seen in foreign exchange markets.
Incredibly and not widely reported the Swiss franc fell more than 7% against the euro, dollar and gold in just 15 minutes (putting gold’s relatively minor recent price fall into context).
Such volatility in currency markets was not seen during 911, the Lehman’s collapse or for any other major macroeconomic or geopolitical event in modern history.
The collapse of the Swiss franc in minutes greatly surpassed the collapse of sterling seen on “Black Wednesday” in 1992, when the British pound fell by 2.7% against the German mark on one day.
Read moreGlobal Currency Wars Sees Swiss Franc Devalue 8.5% Against Gold In Week
– Dollar Falls on Fed’s Pledge to Maintain Key Interest Rate at a Record Low (Bloomberg, Aug 9, 2011):
The dollar tumbled the most in at least 40 years against the Swiss franc after the Federal Reserve pledged to keep its key interest rate at a record low at least through mid-2013 to revive the flagging economic recovery.
The greenback declined versus the majority of its most- traded peers as the Fed said growth was “considerably slower” than it expected and it’s prepared to use a range of policy tools to boost the economy. The meeting came a day after economic weakening and a Standard & Poor’s U.S. credit-rating cut spurred a global stock rout. Commodity currencies recouped losses sustained just after the meeting. Stocks and gold surged.
Just wait until (Black?) Monday!
– Dollar Tumbling To Record Low Against Swiss Franc, New Lows Against Yen (ZeroHedge, Aug 7, 2011)
For an early look at the risk aversion gripping the market look no further than the USDCHF and the USDJPY, the first of which just took out 0.75, and the second now almost at BOJ intervention levels. Ironically, since the math Ph.D.s have still not recalibrated their models, it is very likely that the collapse in the dollar will lead to an explosion in ES courtesy of the inverse correlation, which will once and for all confirm that global capital markets and now nothing but a robotic circus.
USDJPY:
USDCHF:
Cross currency:
– Swiss National Bank Intervention Epic Fail #2 (ZeroHedge, Aug. 03, 2011):
Remember when way back at 3am EDT, the SNB “intervened” to keep the “massively overvalued” franc lower? Yeah, that lasted about 7 hours.
– Swiss Parliament to discuss gold franc (Market Watch, July 8, 2011):
ZURICH (MarketWatch) — The Swiss Parliament is expected later this year to discuss the creation of a gold franc — a parallel currency to the official Swiss franc, with the fringe initiative likely triggering a broader debate about the role of the precious metal in the Alpine nation.
The initiative is part of “Healthy Currency,” a campaign sponsored by politicians from the right-wing Swiss People’s Party (SVP) — the country’s biggest — that is seeking to capitalize on popular fears about global financial turmoil and inflation to reverse the government’s current policy on gold.
“I can imagine that this will spark some sort of debate about gold and there may be some pressure to accept the parallel currency,” said Dr. Gebhard Kirchgaessner, an economics professor at St. Gallen University. “But it won’t have any real effect on the economy. It seems incredible to imagine that there are people out there willing to buy millions of these things.”
Switzerland, which in 2000 became one of the last countries to decouple its currency from gold, is not the only place to contemplate a change in the precious metal’s role amid controversy over government involvement in the economy. In March, Utah became the first state in the U.S. to legalize gold and silver coins as currency, while similar legislation was considered in Montana, Missouri, Colorado, Idaho and Indiana.
“I want Swiss people to have the freedom to choose a completely different currency,” said Thomas Jacob, the man behind the gold franc concept. ”Today’s monetary system is all backed by debt — all backed by nothing — and I want people to realize this.”
– Dollar Drops To Record Low Against Swiss Franc (ZeroHedge, June 28, 2011):
It may not be gold, but it is the closest substitute to the shiny metal in the fiat space (where comparative devaluation is the name of the game once again). While the Swiss Franc has yet to retest recent lows against the euro, the USDCHF just touched an all time record low price of 0.8287, as today’s theme is once again wholesale shorting of the funding (note, not reserve) currency. In the meantime Swiss exporters continue to pretend that margin compression is something best left for the comic books. And after all, Tim Geithner made it all too clear at all recent G8 meetings that it is every country’s patriotic duty to welcome DXY 0 with open arms.
U.S. one hundred dollar bills are displayed for a photograph in New York on Dec. 30, 2008. Photographer: Daniel Acker/Bloomberg News
Dec. 31 (Bloomberg) — The dollar fell, heading for its worst annual decline against the yen in more than two decades, on speculation a U.S. report this week will show manufacturing shrank at the fastest pace since 1980.
The currency was also poised for a third annual loss versus the Swiss franc on bets the Federal Reserve’s zero target lending rate will weigh on demand for the greenback. The euro was set for the largest annual gain against the British pound since its 1999 debut on speculation the Bank of England will keep its main lending rate lower than the European Central Bank’s rate.
Read moreDollar Declines Against Euro, Heads for Biggest Drop Versus Yen Since 1987
