Ignorance Is No Defence

[Jack o'Clubs]

Typical gloating I told you so - smart alek approach.


One must ask the question - was the pain avoidable. Could this have been better handled? What other options were open to SNB?

The fact that QE has been on the table and spoken of for so long and then SNB to claim this was seriously discussed considered and acted upon is a freaking remarkable joke.

Many businesses big and small as well as individual lost money and it is typical of you CV - coming out with something like this now.

I told you (so)! = Said when something bad happens after you warned someone that it would happen


Considering SNB confirmed supporting policy two days before and certainly gave no warnings - Abuse of position and power imo.


I do think and believe arrogance and conceit knows no boundaries like stupidity.


Enjoy!

Thanks Atilla. When I first read C_V's post I thought he was making some helpful comments, with interesting supporting links, but now I realise he was just being an evil, gloating, after-timing b'stard.

 

[Splitlink]

It is sad for the people who lost heavily on the SNB announcement. Its your own personal choice whether you criticise them for reckless risk-taking / wilful ignorance / naive optimism - any and all could be true and these guys are easy targets now anyway. I have no feelings for them one way or another, the market chews people up like a wood chipper and next time I could be in there getting shredded.

But I do feel cheated in that I'm not hearing of traders who anticipated the SNB move but also got on the right side (or even just went flat) before the announcement.

Its one thing to say you wouldn't have done a foolish thing. But please stand up and be counted if you took the opposite side and made a profit.

You can rest assured that if I had made a profit I would have been gloating like hell over the lot of you! Sadly, though, I was not in the market, at that time.

 

[Atilla]

Atilla, you and me get along but I disagree with you on this, as far as forex traders are concerned.

I have learned that a lot of Spaniards took out Swiss franc mortgages when it was fashionable to do so. At the time, these people thought they were being smart. Did they not think that they were taking out a loan that could last up to twenty odd years? Should the Spanish Government try to help them out by giving them a tax break of some kind? I think not.

Should forex traders who made large amounts of money be asked to reimburse those traders who have negative balances? I think not.

Is the SNB responsible for looking after its own interests and those of Switzerland? I think so.

How can a strong currency, like the Swiss franc, be tied to a sick euro, which has been falling since I can't remember, without having to call quits at some point?

Are there unscrupulous dealers about? Yes, there are.

This is a jungle. A lot of people read this forum and think that trading is easy. There are so many threads on this site about the Swiss franc that one would think that newbies would be put off trading forever. Unfortunately, they won't be, though. The next currency crisis will bring on a new wave of posters protesting about unfair dealing practices.

I'm sorry for them, but it's their fault.

I'm not disputing the move was correct just the way it was delivered and handled.

Central Bankers are there to guide and direct the economy. Not spring surprises.

Yes with long term investment in any foreign denominated property or investment carries currency, inflation and interest rate risk. Same for mortgages. Agree.

 

[Jack o'Clubs]

I'm not disputing the move was correct just the way it was delivered and handled.

I'd argue the opposite actually. The peg was a bad idea to start with, and they had alternatives to just dropping it (read Krugman, Buiter et al).

But once they had decided on that course of action they had no option but surprise. The alternative would be to guide, and get raped by the Soros's of this world. The Fed can get away with guidance because no speculator can take on the US$, but the SNB would have been crushed like the BoE was in 1992.

 

[Atilla]

Thanks Atilla. When I first read C_V's post I thought he was making some helpful comments, with interesting supporting links, but now I realise he was just being an evil, gloating, after-timing b'stard.

Those SNB central bankers are such wonderfully helpful people too but you know how it is traders in the markets are such useless greedy bustards.

I guess comprehending the spoken word depends on one's mental capacity.


Enjoy your weekend reading and do come back and tell us what nuggets you have found on those helpful links.


Thanks

 

[Atilla]

I'd argue the opposite actually. The peg was a bad idea to start with, and they had alternatives to just dropping it (read Krugman, Buiter et al).

But once they had decided on that course of action they had no option but surprise. The alternative would be to guide, and get raped by the Soros's of this world. The Fed can get away with guidance because no speculator can take on the US$, but the SNB would have been crushed like the BoE was in 1992.

Well this is taking us to the other blogg where we were considering why was it correct course of action back then and not now? From my perspective 2008/9 was the eye of the storm. They implemented this course of actions in 2011 to help th economy etc. However, on serious point QE for ECB has been on the table sometime. So they could have scaled out way in advance by dropping notes like if the ECB opts for QE then we may have to re-appraise.

So certainly this move could have been staggered with heads-up comments. Then let the market judge. Then if traders still get burnt yes it's their fault.

Moreover, the SNB have them selves indicated 1.10 so this could have been a very good and strong signal directing the market whilst avoiding the 30-40% excesses we saw.


I'm a little puzzled as to why you (someone's pov I respect) insists this is the ONLY move they could have done after 3 days announcing adamantly it was the pillar of their policy?

 

[Splitlink]

I'd argue the opposite actually. The peg was a bad idea to start with, and they had alternatives to just dropping it (read Krugman, Buiter et al).

But once they had decided on that course of action they had no option but surprise. The alternative would be to guide, and get raped by the Soros's of this world. The Fed can get away with guidance because no speculator can take on the US$, but the SNB would have been crushed like the BoE was in 1992.

I can remember John Major and Nigel Lawson swearing to defend the pound as long as necessary. I was not a forex trader but I had cash in a currency fund. I rang them up, that afternoon and put it all in DMs. There was no problem, at all, and because UK was in the snake, I could see no risk. I did it with only two hours to spare before UK left the snake.

 

[highbury fx]

I'd argue the opposite actually. The peg was a bad idea to start with, and they had alternatives to just dropping it (read Krugman, Buiter et al).

But once they had decided on that course of action they had no option but surprise. The alternative would be to guide, and get raped by the Soros's of this world. The Fed can get away with guidance because no speculator can take on the US$, but the SNB would have been crushed like the BoE was in 1992.

SNB dithered for too long to either confirm their intentions correctly or begin to lower the support level in a more controlled manner. they capped the swiss for 3 years and waited until a week before draghi announced a major round of QE to pull it. thats shockingly poor management. the ECB had hinted for weeks that further QE was on its way.

SNB left themselves with no option but to do it in one fail swoop and they've been made to look like a laughing stock. They've done so much damage and we all agree they should have reacted far sooner (months) than they did.

The ECB hinted for weeks that they were going to turn the printing press on again and thats what central banks should do. Drip feed policy so the market can manage itself in a more stable environment. Central banks want stable currency in and out flow and understand that one way to achieve that is to make sure the market has a trusted flow of information to maintain that. The SNB didn't do that and when they did give their final bit of information it was a lie.

 

[Jack o'Clubs]

I'm a little puzzled as to why you (someone's pov I respect) insists this is the ONLY move they could have done after 3 days announcing adamantly it was the pillar of their policy?

- and also to HighburyFX

Rather than badly paraphrasing I'll just link to a short article in The Economist which runs through the arguments - worth reading, it's only a few paras:

http://www.economist.com/blogs/economist-explains/2015/01/economist-explains-13

On the subject of changing policy three days after reconfirming it, I may be wrong here and happy to be corrected, but I thought it was a fairly peripheral member of the SNB talking at some fringe event, ie not someone who would necessarily know exactly what the SNB core were thinking. It's worth remembering the SNB structure is materially different to most other central banks', not least the representation of the cantons.

 

[highbury fx]

- and also to HighburyFX

Rather than badly paraphrasing I'll just link to a short article in The Economist which runs through the arguments - worth reading, it's only a few paras:

http://www.economist.com/blogs/economist-explains/2015/01/economist-explains-13

On the subject of changing policy three days after reconfirming it, I may be wrong here and happy to be corrected, but I thought it was a fairly peripheral member of the SNB talking at some fringe event, ie not someone who would necessarily know exactly what the SNB core were thinking. It's worth remembering the SNB structure is materially different to most other central banks', not least the representation of the cantons.

Hi Jack

I just think it was clearly something the SNB had been considering for some time and they were forced in to taking such a drastic measure because they knew (like we all did) that draghi was about to increase QE which would have meant more euros pouring in to switzerland and more chf pouring out and they had to stop that.

i get that but its how they pushed themselves in to a corner which i think is disappointing. they should have been more experienced and acted in a more responsible and professional manner.

i'm not disagreeing with you or anyone on here, this is an excellent thread.. just my tuppence worth.

 

[tar]

ATILLA..........three letters....................ERM



http://news.bbc.co.uk/onthisday/hi/dates/stories/september/16/newsid_2519000/2519013.stm


Sorry but i have zero sympathy, its always someone else's fault but the muppet that put the trade on......Believe it or not, this is a business.

If you bought the EUR/CHF on anticipation that it has a floor at 1.20 that doesn't make you an idiot , maybe if you lost 10sK in an eye blink you will have a different opinion .
SNB's actions are a classic example of what they call "amateur hour" . At that poor performance anyone of us can replace them , seriously its not that hard hmmm ok a floor at 1.05 , you know what nope i've changed my mind no floor , oops i guess i will rise rates 50 bp instead c'est la vie .










You know what , we will cut IR by hmmm lets say 50-75 bp !

 

[Pat494]

The Greek elections tomorrow should be interesting, talking of Euroland. A Socialist Govt is expected to be returned. Sacking 40,000 cleaning ladies wasn't exactly the move of the century to be popular. A Wealth Tax would have done better imho. Those shipping magnates are rolling in it.

The advantages of short time frame trading with stops was made abundantly clear over the SNB fiasco.

 

[Jack o'Clubs]

The Greek elections tomorrow should be interesting, talking of Euroland. A Socialist Govt is expected to be returned. Sacking 40,000 cleaning ladies wasn't exactly the move of the century to be popular. A Wealth Tax would have done better imho. Those shipping magnates are rolling in it.

I don't disagree, but there's a lot of rot spoken about what's going on in Greece. Tax revenues have fallen off a cliff because everyone has stopped paying expecting a tax amnesty from Syriza. This includes 'the little people' as well as shipping magnates.

And those 'cleaners' ? 600 'worked' for the finance ministry alone. 600 cleaners? A lot of these were phantom payroll jobs where a well connected friend or family adds you to the payroll and you never even turn up. While the Germans were happy paying the bills no-one cared.

But I agree on one thing: Monday could see those Force Majeure clauses being dusted down again

 

[Fintrader]

 

[counter_violent]

]If you bought the EUR/CHF on anticipation that it has a floor at 1.20 that doesn't make you an idiot [/COLOR], maybe if you lost 10sK in an eye blink you will have a different opinion .
SNB's actions are a classic example of what they call "amateur hour" . At that poor performance anyone of us can replace them , seriously its not that hard hmmm ok a floor at 1.05 , you know what nope i've changed my mind no floor , oops i guess i will rise rates 50 bp instead c'est la vie .










You know what , we will cut IR by hmmm lets say 50-75 bp !

Well actually it does make them idiots.

1.20 was a level being defended by SNB at unsustainable cost.

How does defending a level translate into...there can only be upside from that level ?

Only in the minds of the terminally stupid...I respectfully submit.

 

[Atilla]

I reckon the SNB are idiots and have been for some time. Playing GOD syndrome. We can do this and we can do that. By that I mean something like - we'll save our exporters a little adjustment pain now but inflict much more 2 years later.

We'll also having boosted our reserves buying euros and stop supporting our exporters we can inflict even more damage on our reserves by another 30% as the euro tanks.

In fact we can maximise that damage if we do it now as the ECB is about to announce QE which they have been talking about for the last 4/5 years as an option. Yanks and the Brits have already done this and they are scaling back. But the ECB - wow, great opportunity to maximise damage like never before.


Ok answers on a postcard, why didn't we see this coming?

Who thought it was a good idea not to call it out first?

Hey - if we don't mention this to our own government why should we tell the market.


My late dad had a good saying I've mentioned it here before... He said "my son, if you drown in a pond - people will laugh at you. If you drown in a big ocean - they'll say he was a brave courageous man."

Right now the SNB have drowned and they have effectively chose to drown in the ocean creating a tsunami effect instead of choosing to drown quietely in a pond - with shame, choosing to create ripples.


imo This is the cliquey bankers, financial analysts and press ganging together to save face. Call a spade a spade for goodness sake.

 

[tar]

Well actually it does make them idiots.

1.20 was a level being defended by SNB at unsustainable cost.

How does defending a level translate into...there can only be upside from that level ?

Only in the minds of the terminally stupid...I respectfully submit.

So i gather you were short big time ? or not ...

 

[counter_violent]

So i gather you were short big time ? or not ...

No not at all...I have avoided anything CHF since the peg was introduced.

 

[tar]

The advantages of short time frame trading with stops was made abundantly clear over the SNB fiasco.

I don't see how , as stops aren't guaranteed , so easily one could have been happily daytrading long USD/CHF then boom ! Not to mention when you daytrade with a tight SL you tend to bet bigger . Lets face it its a dangerous game no matter what , unless you trade options - long only - .

http://www.trade2win.com/boards/general-trading-chat/116962-catastrophic-event.html

 

[karmit]

Which currencies are NOT part of any pegging nowadays? lost track