Understanding the SNB surrender

[Atilla]

The point is they ballsed up!

 

[tar]

No it wasn't, they drew a line that until recently they didn't have to defend, and saved their exporters a great deal of FX volatility in the meantime.

It stayed at the floor for long time during the 2012 , either way it was a wrong decision because you never know before the event how long it will stay at your limit ... you are speaking in a hindsight .

 

[Jack o'Clubs]

It stayed at the floor for long time during the 2012 , either way it was a wrong decision because you never know before the event how long it will stay at your limit ... you are speaking in a hindsight .

So it gave Swiss exporters three years of relative certainty. What's your point?

 

[Jack o'Clubs]

The Everest Capital Global hedge fund may be neither the first nor the last currency-market participant to feel the pain caused by the Swiss National Bank’s surprise decision to discontinue its fixing of the minimum exchange rate between the Swiss franc and the euro last week, but the fund’s suffering might be notable because it appears to have resulted in its shuttering, Bloomberg News reported.

Marko Dimitrijevic, who founded Everest Capital LLC in 1990, will close his company’s largest fund due to losses associated with massive movements in the currency market after the Swiss National Bank’s unexpected announcement Thursday that it was abandoning its policy of pegging the exchange rate at 1.20 Swiss francs per €1.00, according to a person familiar with the firm cited by Bloomberg News.

Basically, Everest Capital Global had bet (big) the Swiss franc would depreciate in value, indicated Bloomberg News’ source, who requested anonymity because the information is private. Based in Miami and Singapore, the company had about $830 million in assets under management at its largest fund at the end of last year, according to a client report cited by the news agency.

An emerging-markets specialist, Everest Capital will continue to manage more than $2 billion in assets at its other funds, which do not have the same kind of exposure to the Swiss franc as did their sibling, a person familiar with the company told the Wall Street Journal.

Other hedge-fund firms suffering Swiss franc shock include the London-based Comac Capital LLP, managing $1.2 billion, and the South Norwalk, Connecticut-headquartered Discovery Capital Management LLC, managing $14.7 billion, the Journal reported.

One shouldn't speak ill of the recently deceased, but any hedge fund wiped out by one position going against them isn't worthy of the name. That's a gambling den not a hedge fund.

 

[mike.]

So im guessing that spreadbet brokers and MM's shouldn't really be affected too much by Thursdays antics ? Unless their book required them to hedge in the underlying market. ??????

 

[Atilla]

http://www.bloomberg.com/news/2015-...ting-boost-from-swiss-bankers-currencies.html

The overvaluation of the franc decreased since the limit was introduced, meaning the cap is no longer necessary, Switzerland’s central bank said in a statement. Some strategists said the nation simply decided it no longer wanted to spend billions of dollars defending the limit, particularly with the ECB about to flood markets with euros.

Begs the question why was it necessary then and not now?

The SNB’s euro holdings climbed 95 percent from when the cap was implemented to the third quarter of last year, according to the most recent data. It accounted for 45 percent of its total reserves. Ouch!

 

[NVP]

ouch indeed ..............theres no doubt the dam was showing plenty of cracks.........but the speed and intensity of the final breach was even worse

 

[Atilla]

So it gave Swiss exporters three years of relative certainty. What's your point?

http://www.bloomberg.com/news/2015-0...urrencies.html

The overvaluation of the franc decreased since the limit was introduced, meaning the cap is no longer necessary, Switzerland’s central bank said in a statement.

Begs the question why was it necessary then and not now?

Was the situation worse back in 2011 and is so much better now?


Assuming this to be true and indeed things do seem a little less worrying now then back in 2008/9 (not necessarily 2011), still doesn't take away the point they have totally mismanaged the release of news imho.


Knives are too small. I now have a sword out for them

 

[tar]

Criminal

http://www.bloomberg.com/news/2015-0...urrencies.html

The overvaluation of the franc decreased since the limit was introduced, meaning the cap is no longer necessary, Switzerland’s central bank said in a statement.

Begs the question why was it necessary then and not now?

Switzerland Could Act on Currency Again, Central Banker Says
Swiss Franc Is ‘Greatly Overvalued,’ Central Bank President Thomas Jordan Says

http://www.wsj.com/articles/switzerland-could-act-on-currency-again-central-banker-says-1421501547

 

[Atilla]

Switzerland Could Act on Currency Again, Central Banker Says
Swiss Franc Is ‘Greatly Overvalued,’ Central Bank President Thomas Jordan Says

http://www.wsj.com/articles/switzerland-could-act-on-currency-again-central-banker-says-1421501547

Well they did the right thing in totally the wrong way. Now they may be trying to make amends perhaps and that's their way of saying we are a lil bik zorri.

As you suggested I wonder whether they are now thinking about the USD.

The Fed may well be now worried about the dollar.

One analyst suggested the SNB may also be worried about the next Fed meeting too.

I think the whole global economy is off equilibrium. Having disequilibrium in one part leads to issues in another. Certainly doesn't feel like we are converging.

Floating exchange rates to the RESCUE :clap:

 

[tomorton]

So, are they going to start buying EUR all over again now?

As posted yesterday, I will feel better keeping away from European currencies until the fall-out from the Swiss 'avalanche' is clearer.

 

[tar]

He wont be buying anything because he isnt going to stay in office ...

 

[Pferd]

Well they did the right thing in totally the wrong way. Now they may be trying to make amends perhaps and that's their way of saying we are a lil bik zorri.

As you suggested I wonder whether they are now thinking about the USD.

The Fed may well be now worried about the dollar.

One analyst suggested the SNB may also be worried about the next Fed meeting too.

I think the whole global economy is off equilibrium. Having disequilibrium in one part leads to issues in another. Certainly doesn't feel like we are converging.

Floating exchange rates to the RESCUE :clap:

This Jordan guy sounds now like one of the boys in Made in Chelsea after he cheated the girlfriend.....

For sure there is something going on, God knows what.....but I fear we are going to find out soon. Not being a conspiracy theorist, but there has to be something big I am sure.

 

[Atilla]

He wont be buying anything because he isnt going to stay in office ...

Really? Where did you hear that?

I heard that even the Swiss government didn't know the move made by the SNB.

He also added - The Swiss National Bank’s decision to give up its cap on the franc, which roiled financial markets, was backed by all governing board members, President Thomas Jordan said.

 

[Atilla]

This Jordan guy sounds now like one of the boys in Made in Chelsea after he cheated the girlfriend.....

For sure there is something going on, God knows what.....but I fear we are going to find out soon. Not being a conspiracy theorist, but there has to be something big I am sure.

I'm sure and I was thinking along the lines of...

22nd
25th
28th

Uncertainty, volatility and risk!

Buy gold!

 

[tar]

This Jordan guy sounds now like one of the boys in Made in Chelsea after he cheated the girlfriend.....

For sure there is something going on, God knows what.....but I fear we are going to find out soon. Not being a conspiracy theorist, but there has to be something big I am sure.

Are the Libor fix and FX manipulation scandals a conspiracy ?

Fact : One of the main methods to make money in the markets is "Insider trading" , it happens all the time , some get caught though , just don't say anything over the phone or in your emails .

 

[Pferd]

I don't think there was a lot of inside trading on this one. Although I believe what they did could have been handled differently we have to give them credit for one thing, as soon as they took the decision they announced it. Obviously, they did not want to have any "sources" or "people familiar with the matter" leaking information or profiting from it. But who knows, maybe I am wrong. I think this was done pretty swiflty in 12 hours or even less. It was like a commando operation.

 

[Jack o'Clubs]

Begs the question why was it necessary then and not now?

Was the situation worse back in 2011 and is so much better now?

Yes, absolutely! Of course! Corporate health lags, so Swiss company earnings and balance sheets were at their weakest in 2011. They are much better condition to cope with FX volatility today than they were in 2011 when bankruptcies would have been likely. There's a real lack of economic understanding in these threads...

 

[Pferd]

One thing I certainly like from Internet forums is that they never are short of assholes.....:smart:

 

[Pat494]

Are the Libor fix and FX manipulation scandals a conspiracy ?

Fact : One of the main methods to make money in the markets is "Insider trading" , it happens all the time , some get caught though , just don't say anything over the phone or in your emails .

They just can't resist the money magnet, can they ?
Now that their dirty deeds are becoming more widely known, they should try and curb their overwhelming GREED ! Or be fined out of existence ( allowed to keep their own clothes )