Posted on 01/15/2015 5:13:21 AM PST by tcrlaf
"As if millions of macro hedge funds suddenly cried out in terror and were suddenly silenced"
Over two decades ago, George Soros took on the Bank of England, and won. Just before lunch local time, the Swiss National Bank took on virtually every single macro hedge fund, the vast majority of which were short the Swiss Franc and crushed them, when it announced, first, that it would go further into NIRP, pushing its interest rate on deposit balances even more negative from -0.25% to -0.75%, a move which in itself would have been unprecedented and, second, announcing that the 1.20 EURCHF floor it had instituted in September 2011, the day gold hit its all time nominal high, was no more.
What happened next was truly shock and awe as algo after algo saw their EURCHF 1.1999 stops hit, and moments thereafter the EURCHF pair crashed to less then 0.75, margining out virtually every single long EURCHF position, before finally rebounding to a level just above 1.00, which is where it was trading just before the SNB instituted the currency floor over three years ago.
(Excerpt) Read more at zerohedge.com ...
The EU is about to start printing unbacked money to stop deflation, so the Swiss decide they can no longer defend the peg.
In Addittion, they have raised the cost for the privilege of putting your money in the Swiss Bank from .25%, to .75%.
One thing is clear. Worldwide financial volatility has really ramped up in the last several days.
The volitility
So, what you arewsaying is; the sky has begun to fall.
Isn’t Switzerland “too big to fail”?
Cesaer’s going bankrupt, Radio Shack likely to BK this week, Target Stores pulling out of Canada COMPLETELY (just announced), UBS saying they have no idea who is exposed to the Franc for how much.
Yep, it’s become highly volatile.
But, of course, you can’t actually SAY anything but rah, rah, rah, because it could make Democrats look bad, and likely be racist, or homophobic, or sumpin’.
well, this is very interesting
I wish I could understand what must be an important event
I think there must be sanity involved at the root
I hope wiser FReepers will help me out
“Pigs get fat - Hogs get slaughtered”... still true even today!
I mentioned to somone a few days ago that markets are taking big swings in both directions, just like they did before the 2008 crash. It was in that thread that I came up with the analogy of a top wobbling just before it comes to a stop.
And the more I think about it, the more I think that analogy fits. We are living in very interesting times.
And then there is that Harbinger thing about Sept. 13, 2015.
All of this in just 48 hrs:
January 12, 2015:
“We took stock of the situation less than a month ago, we looked again at all the parameters and we are convinced that the minimum exchange rate must remain the cornerstone of our monetary policy,” SNB’s Jean-Pierre Danthine.
January 15, 2015:
“Recently, divergences between the monetary policies of the major currency areas have increased significantly – a trend that is likely to become even more pronounced. The euro has depreciated considerably against the US dollar and this, in turn, has caused the Swiss franc to weaken against the US dollar. In these circumstances, the SNB concluded that enforcing and maintaining the minimum exchange rate for the Swiss franc against the euro is no longer justified.”
The Swiss franc strengthened dramatically.
The Swiss are acting to protect themselves and their own interests - something at which they have historically been very good.
I find it interesting that they have negative interest on deposits. I thought ‘Why would anybody put their money in such a place?’. Then it hit me , this is where tyrants and others trying to hide their money from the rest of the world store it. It’s a sign of the times. Legalized thievery has become so bad the thieves themselves prefer a little loss than exposure to their fellow thieves!
Yeah, but they used to also take money from regular people who were merely well off and wanted some financial privacy and a nut beyond the reach of the US government and court system. No more--Fedzilla has made that just about impossible.
But they didn’t peg to gold in the referendum.
I need 4 months before the collapse.
pinging for further discussion/enlightenment. I don’t pretend to understand the foreign currency markets...but the market swings have surely got my attention, especially in recent weeks. We live in interesting times..
I saw a huge flock of funny looking geese heading towards Europe. I took another look and realized that they were Black Swans.
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