Posts Tagged ‘Swiss National Bank’

When Do We Start Arresting The Central Bankers?

When Do We Start Arresting The Central Bankers?

Courtesy of Karl Denninger at The Market Ticker 

You want to know where the spikes in the Euro came from today?

Try here:

That’s "official intervention" by the Swiss National Bank and if they don’t cut this crap out they’re going to cause an equity and credit market collapse.

These jackasses now have double the Euros they held just a short while ago from these "operations", and as you can see, they’re pissing into a hurricane on even a daily basis, say much less on anything more consequential:

 

Congress does not have the right to get involved in the affairs of a foreign sovereign. 

But Congress has every right to demand that Bernanke close his goddamn swap lines right now until this shit stops, lest The Fed be the one who is on the hook when the entire ECB structure comes apart and WE THE TAXPAYERS are on the hook.

This sort of tampering, performed by a private party, is illegal.  Of course it’s routine and "expected" in the FX space for sovereigns to interfere, but much of the instability that we have seen of late has been caused by this sort of "intervention."  Specifically, today it was responsible for a sixteen point, or 1.5%, jackrabbit move in both directions in the stock market in the space of less than two hours.

There is absolutely no excuse for The United States to support this sort of garbage with our taxpayer backstops.  These instabilities in the foreign exchange markets make it impossible for real companies to hedge costs and profits in foreign nations and do severe and irrevocable damage to these firm’s operations.

It is also reflecting into the US Commercial Paper markets and driving spreads wider there as well. This is the very same market that locked up in 2008 and triggered the equity market collapse.

The SNB’s "interest" in doing this is clear: Half of European banks are stuffed full of debt written in Swiss Francs – in nations where the currency is the Euro!  These idiots (both the borrowers and the banks that offered these "products") have now seen the principal balance of these loans represented in Euros rise by 11% in the last year.

This sort of idiocy, incidentally, is one of the reasons two years ago that I said there was no chance we could possibly "inflate our way out" or…
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