Posted on 01/16/2015 7:05:52 PM PST by Lorianne
Europe is deflating….The Swiss banking established, normally always a pillar of private property and free capital movement have decided to stop pegging their currency which has been an affront against free markets.
Hedge Funds piggy banking off government manipulation and mostly short the currency were taken out to the woodshed and shot as the currency shot up 30% in minutes.
Love it that those arrogant bastards in charge of forex trading at numerous banks just took it in the chops. The only chaps who got it right, believe it or not, were those who were long the Swiss ETN and short the Euro ETN.
And good on them! Yr hmbl srvnt did NOT partake in this trade (dammitall!), but these guys did simply fantastic.
Euro, or as I've called it since its origins, the Fishwrapper, is finally playing out to its garbageness, and may now be entirely uninsured against a further dive (as it was from 2002 through 2013).
Ah, well, trading dep'ts in banks and such have to clean house fr/time to time. Preferably without 8- and 9-figure losses (see: Bank of America and Paribas), of course.
Cheer up. These losers with the fancy degrees and even fancier non-mathematical skills will doubtless turn up another job.
1. Where does Soros stand in all of this?
2. Do all those dead bankers have anything to do with this?
Seriously, can one of you folks explain to a layman just what the heck the Swiss have done?
This is not an area I know anything about but would lie to learn.
I have preferred the Larry Kudlow term “europeso”.
This is not an area I know anything about but would lie to learn.
Freudian slip?
2) Almost surely not. The last great banking fiasco having anything to do with the cocoa mkt was that nonsense in the 1970s with Paul Erdman (the late author, but formerly a banker) and the 'Lee' boys, Kurmerle and Zuhmerle, who at one time took a position of owning over half the world's cocoa, and lost their arses, resulting in Erdman checking into the famous Graybar Hotel for a time.
Were I a conspiratorial type, I should say that, given the bankers incredible overgearing in certain markets having gone wrong, the suicides had been given by their bosses the old 'for the good of the service' choice that used to be offered to military incompetents and/or traitors.
I have never failed in my investments.
Aluminum, Steel, Brass, Machinery, Carbide Cutters, Promotions, Beer. None have ever failed me.
From what I can tell, the Swiss kept the value of their currency lower than what is is actually valued at by using something called a ‘peg’ to the Euro and this involved the Swiss buying tons and tons of Euros.
They ended that policy today, rocketing the Swiss Franc to its true value, which is high, and crashing the Swiss economy because deflation kicks in.
Its a sign that Switzerland is anticipating a huge influx of money from somewhere and wants to head it off by increasing the value of their own currency. It may be they see the crash ahead and dont want a million Euro-zoners trying to jump on Switzerland’s liferaft.
I hope Soros took it in the chops
and will be further unable to fund "Ferguson" and the "Occupy .." socialistic programs.
just tired!
The Swiss have rockets!!??
This episode is pretty simple. A couple of years ago, the Swiss (who have an economy based on 1) banking and 2) exports) became alarmed (duh!) at the incompetence, malfeasance, and mismanagement of the ECB.
The Swiss determined that further Euro declines against the Swiss franc were dangerous to their economy as well as being highly likely. So, the SNB (Swiss Nat'l Bank) did what every institutional idiot does: they tried to control prices by 'pegging' the Swiss currency to the Euro, by setting a 'floor value' of SF 1.20 to Euro 1.00.
Only took 2 years or so for this, as all price controls sooner or later, to become fantasy, and the top blew right off the pot yesterday. The Swiss, having little choice and finding it ENORMOUSLY expensive to maintain their Euro 'floor' simply said, "Fuck it, we quit."
And so the entire currency trading dep'ts of several banks -- incl. the clowns at Bank of America -- were fired, wholesale. Two of the largest forex trading firms are now toast. AT LEAST 3 large hedge funds are, or will be next week, history.
This being my business, I can go on for QUITE a while on the topic. However, I suspect that you, like most FReepers, are quite intelligent and can read between the lines, even if not specifically informed in certain areas. No conspiracy theory here, at bottom, just the wishful thinking and general Pollyannish thoughts of central bankers. Well, and a good solid dose of asininity.
FReegards!
Ok. I get that.
But is the damage to the Swiss economy a short term thing?
If not, haven’t they just shot themselves in the foot while trying to protect themselves?
My only guess is they made a calculation, and it was worth it to do this. Due to the severity of what just happened, I doubt the Swiss stock market will be recovering anytime soon.
Besides, Fishwrapper allows one to do a good parody of the old Mills Brothers song, Cab Driver, heh heh heh.
"Fish-wrap-per, once mo' roun' da block
"Nev-ah min' de tick-in' of da clock
"Jus' fo'-get de E U is a crock
"Fish-wrap-per, you in fo' a shock."
Thanks FRiends.
What do you think are the short term and the long effects on the world economy? If its too complicated feel free to decline an answer.
But it really is fascinating as I know so little about this.
How about copper...any of that?
Also, it's all nice and tidy to make 0.75% on everyone ELSE's deposits, no?
There's a reason that the Swiss republic has been both prosperous and generally unmolested since the 1200s, and it is NOT their great chocolate.
Well said, m'FRiend!
I’ve always like The Vice Fund (now called The Barrier Fund). Gambling, liquor, tobacco and maybe a little porn thrown in there for good measure. These are the things people NEVER do without, even in down times.
I’m a total contrarian investor. Always expect the worst from people and you’ll never be disappointed! :)
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