What happened to the Swiss franc?

[thailiketoo]

OP, "The turmoil is all the more unsettling because, ........ the Swiss franc has been viewed as a haven for investors, thanks to the stability and wealth of the Swiss government."

What are they nuts? The value just went up 30%. That is certainly a haven; now even a better haven.

Where to they get these dummy writers and no editors?

[Braddockrd]

This means that Swiss nationals here in Thailand receiving pensions from Switzerland have 20% more income overnight. Welcome news indeed for me.

and the same is true for me, since I am about to move over for early retirement in few months and my cash funds and the pension money just boosted by that 20% and give me few million Baht for a nicer living place and a even more comfortable life...

Whatever goes up, eventually goes down, so don't spend that 20% foolishly

I am Swiss, we normally do not spend foolishly... for me, it means that my Swiss asset will give me 20% more Baht... that means with the same living expense budget (which I will not change), I will not be bankrupt at the age of 100 but only at the age of 105...

Unless you exchage it all now all you have are paper gains, my Swiss friends...

[Naam]

and the same is true for me, since I am about to move over for early retirement in few months and my cash funds and the pension money just boosted by that 20% and give me few million Baht for a nicer living place and a even more comfortable life...

Whatever goes up, eventually goes down, so don't spend that 20% foolishly

I am Swiss, we normally do not spend foolishly... for me, it means that my Swiss asset will give me 20% more Baht... that means with the same living expense budget (which I will not change), I will not be bankrupt at the age of 100 but only at the age of 105...

Unless you exchage it all now all you have are paper gains, my Swiss friends...

i'd be very happy if i had "paper gains" of 20% overnight more often or even only once in a while

my congratulations to those who hold substantial CHF assets! may the gopferdammi force be with you, od'r?

[oxo1947]

If the Swiss could not afford to hold the manipulation of their currency---How does Thailand do it---------- Sap-Son --สับสน

Thailand didn't....see "Thai baht collapse of 1997".

Diplo---that is nearly 20 years ago & the west has had quite a few in that time (the last one nearly bankrupted USA & Europe) but didn't touch Thailand, I think they (Thailand) are on the + side of this equation, I just wish I knew how.

Edited January 17, 2015 by oxo1947

[KittenKong]

Always gratifying to see traders and brokers getting shafted and losing their shirts, jobs and future. All margin trading trading of stocks and currencies should be banned globally, and all short-term trading should be taxed at 200%. Then we might get back a little bit of sense in markets.

Who is going to take the other side when you want to do something?

I dont follow you.

When I want to do something, I just do it. I dont hedge it or take bets for or against it.

If I transfer funds from one currency to another I actually do it at the time, in what amounts to a matched bargain, and I do it because I want the funds in the second currency or perhaps because I think that the second currency will give me a better return long-term than the first.

And if I buy shares it's because I expect the share to do well over time, and again I do it in what amounts to a matched bargain. If I dont think that the share has long-term potential then I either dont buy it or, if I already own it, I sell it.

What I dont do is bet that something I dont own and dont want to own will lose value in the space of an hour or a day or a week or a month.

So short-term trading and margin trading and spread-betting and such-like do not form any part of my requirements, and I sincerely believe that they are largely responsible for many of the economic crises that have befallen the world over the last few decades, with the other main culprits being other forms of debt, and the greedy and incompetent people who seem to be running things.

[Anthony5]

Leveraged currency traders-are they investors or gamblers?

If you made money then you were an investor, if you lost money then you were a gambler.

So all the FX exchanges that went bankrupt or got in serious liquidity problems overnight because this event, one of them ranked the second biggest in the world, were gamblers?

[timewilltell]

Always gratifying to see traders and brokers getting shafted and losing their shirts, jobs and future. All margin trading trading of stocks and currencies should be banned globally, and all short-term trading should be taxed at 200%. Then we might get back a little bit of sense in markets.

Who is going to take the other side when you want to do something?

I dont follow you.

When I want to do something, I just do it. I dont hedge it or take bets for or against it.

If I transfer funds from one currency to another I actually do it at the time, in what amounts to a matched bargain, and I do it because I want the funds in the second currency or perhaps because I think that the second currency will give me a better return long-term than the first.

And if I buy shares it's because I expect the share to do well over time, and again I do it in what amounts to a matched bargain. If I dont think that the share has long-term potential then I either dont buy it or, if I already own it, I sell it.

What I dont do is bet that something I dont own and dont want to own will lose value in the space of an hour or a day or a week or a month.

So short-term trading and margin trading and spread-betting and such-like do not form any part of my requirements, and I sincerely believe that they are largely responsible for many of the economic crises that have befallen the world over the last few decades, with the other main culprits being other forms of debt, and the greedy and incompetent people who seem to be running things.

What you are,issuing is that you need to have someone on the other side to buy your currency of choice or someone to sell to in order to sell back a stock you no longer want or someone who has a stock you want to buy who is willing to sell it to you. It is called a market and the auction process ensures spreads are small. Imagine if you got sick and epwanted to sell your Apple stick to pay the medical bills in an emergency and there were no sellers at the time. The spread could be enormous without traders. Equally if you want to exchange currency you might find a job finding someone in say the UK who wants to exchange with you - or of course allow the banks to gouge you with a terrible rate.

Traders provide liquidity and are entirely necessary to a good market system. The banks and hedge funds become a problem when they are trading risky assets at huge leverage with no controls. They use fiat currency printed by banks and leverage customers money multiple times with very small required reserves so your 1.00 provides about 98.00 in money flow as the banks leverage. This is why even a small run on a bank can cause a huge problem. There should be bigger reserves required by banks using customers money to restrict the multiples they are currently using but governments need growth to produce inflation to discount their huge debt burden which has cone about by governments pursuing ever more populist policies to ensure they get re-elected by the ignorant masses. It is a merry go round with 1000000 players running around in the dark so the chairs are invisible - eventually the music will stop and the lights come up to reveal only a dozen chairs and money as we know it will disintegrate. It is only built on trust by the public that the givernment will repay its debts and that trust is unfounded. With almost every nation in debt one has to wonder who is funding them all. It is all an illusion perpetuated by governments, greedy politicians and a hoodwinked public anyway.

Someone asked if anyone got burned - I trade futures and did not much enjoy the drop in the indexes but made a bit on the way back up.

No one has mentioned the effect of the interest rate in Swiss lowered to negative 0.75% in a clear disincentive for people to invest or buy the currency because of the carry trade cost so the knee jerk reaction will very likely abate in the coming months.

I wonder why they did not raise the level of the cap first.

[SheungWan]

Unless you exchage it all now all you have are paper gains, my Swiss friends...

The holders of Swiss francs are hardly going to be shaking in their boots unless they think the SNB is going to suddenly wake up and announce it was all a mistake.

[SheungWan]

Leveraged currency traders-are they investors or gamblers?

If you made money then you were an investor, if you lost money then you were a gambler.

'er, you nearly got that right. The saying actually goes 'if you are up you are a trader, but if you are down you are an investor'.

[metisdead]

A post in which foreign language was used has been removed. English is the only acceptable language anywhere on ThaiVisa including Classifieds, except within the Thai language forum, where of course using Thai is allowed.

[Robby nz]

Leveraged currency traders-are they investors or gamblers?

If you made money then you were an investor, if you lost money then you were a gambler.

A bit more complex than that.

If you wear ordinary clothes, sit in a field and watch chickens fighting and bet 100 on the result you are a gamble and therefor a criminal.

If you wear a suit, sit in an office and watch computer screens and bet 100 million on currency fluctuations you are an investor and engaged in a legitimate business.

Following on from that, if the criminal loses his 100 it might mean his family eat noodles instead of rice that day.

If the investor looses the 100 million it is probably not his money anyway for he has borrowed most if not all of it.

And from there : If the criminal gets caught he may spend time in jail.

While the investor may be deemed to big to fail and gets bailed out by the Govt so is able to give himself a bonus and carry on and do the same thing again.

And the people who were gullible enough to loan the investor money wonder where their savings have gone and how they can now survive on what little they have left.

[thailiketoo]

I changed all my money from US dollars when I knew this would happen. It was a lot of money. All the money I made from selling off my real estate in Florida before the bust. I put all my money into an ANZ bank CHF account in Singapore.

One minor flaw. I was sure it would happen in 2009.

[swissie]

CHF/THB of 38 is a "knee-jerk" reaction. Long term CHF/THB will average between 33 to 35.

Futures Trading (margin trading) is a Zero-Sum Game. For every 1 Dollar winner, there is a 1 Dollar loser (minus commission)

---------------------------------------------------------------------------------------------------------.

The Swiss-Export oriented companies had now over 3 years time to prepare for the inevitable. It was clear from the very beginning that that the EURO/CHF peg was not designed for eternity.

Swiss Exports will get more expensive. Fine. But with the same highly valued CHF one can import things much cheaper (How about fuel, food, and everything else.) How much more spending money will this put into the pockets of Swiss-Consumers?) and therefore fuel the domestic-economy?

-------------------------------------------------------------------------------

To me it's clear: The Swiss Export-Tycoons have already taken up this subject (once more) to put pressure on the comparatively high income level of the Swiss working populace. They will not rest, until they have managed to knock down the lower income segment to the "Hartz 4 / Eternal Temporary Employment-Level" as it has been gloriously implemented in Germany and basically in the rest of the "Western-World" already. (Europe/USA.)

As Warren Buffet said (probably the most successful long-term investor alive). = There is a global Class-War raging, and we (the people that own 90 % of all tangible assets of this world will win this war thanks to "Globalization".

The future looks bright. Cheers.

[thailiketoo]

CHF/THB of 38 is a "knee-jerk" reaction. Long term CHF/THB will average between 33 to 35.

Futures Trading (margin trading) is a Zero-Sum Game. For every 1 Dollar winner, there is a 1 Dollar loser (minus commission)

---------------------------------------------------------------------------------------------------------.

The Swiss-Export oriented companies had now over 3 years time to prepare for the inevitable. It was clear from the very beginning that that the EURO/CHF peg was not designed for eternity.

Swiss Exports will get more expensive. Fine. But with the same highly valued CHF one can import things much cheaper (How about fuel, food, and everything else.) How much more spending money will this put into the pockets of Swiss-Consumers?) and therefore fuel the domestic-economy?

-------------------------------------------------------------------------------

To me it's clear: The Swiss Export-Tycoons have already taken up this subject (once more) to put pressure on the comparatively high income level of the Swiss working populace. They will not rest, until they have managed to knock down the lower income segment to the "Hartz 4 / Eternal Temporary Employment-Level" as it has been gloriously implemented in Germany and basically in the rest of the "Western-World" already. (Europe/USA.)

As Warren Buffet said (probably the most successful long-term investor alive). = There is a global Class-War raging, and we (the people that own 90 % of all tangible assets of this world will win this war thanks to "Globalization".

The future looks bright. Cheers.

How will the Swiss export tycoons lower the value of the CHF?

[KittenKong]

What you are,issuing is that you need to have someone on the other side to buy your currency of choice or someone to sell to in order to sell back a stock you no longer want or someone who has a stock you want to buy who is willing to sell it to you. It is called a market and the auction process ensures spreads are small. Imagine if you got sick and epwanted to sell your Apple stick to pay the medical bills in an emergency and there were no sellers at the time. The spread could be enormous without traders. Equally if you want to exchange currency you might find a job finding someone in say the UK who wants to exchange with you - or of course allow the banks to gouge you with a terrible rate.

Unlike real investors who are in for the long term, the speculators generally don't own the actual thing they are trading; they just buy and sell derivatives of some type. This provides no liquidity at all and is of no benefit whatsoever to anyone except those who buy and sell the same derivatives.

[thailiketoo]

What you are,issuing is that you need to have someone on the other side to buy your currency of choice or someone to sell to in order to sell back a stock you no longer want or someone who has a stock you want to buy who is willing to sell it to you. It is called a market and the auction process ensures spreads are small. Imagine if you got sick and epwanted to sell your Apple stick to pay the medical bills in an emergency and there were no sellers at the time. The spread could be enormous without traders. Equally if you want to exchange currency you might find a job finding someone in say the UK who wants to exchange with you - or of course allow the banks to gouge you with a terrible rate.

Unlike real investors who are in for the long term, the speculators generally don't own the actual thing they are trading; they just buy and sell derivatives of some type. This provides no liquidity at all and is of no benefit whatsoever to anyone except those who buy and sell the same derivatives.

Correct me if I'm wrong but don't traders determine the market price? Don't the FX traders have to have a certain percent of the cash on deposit and if there is too much movement they get a margin call to put up more money?

[dean008]

is meant to be a forum. I do not see the point in asking a question only to reproduce a newspaper article. I actually thought you were asking for information because you missed the news about the swiss franc

[thailiketoo]

is meant to be a forum. I do not see the point in asking a question only to reproduce a newspaper article. I actually thought you were asking for information because you missed the news about the swiss franc

Who are you talking to?

[Anthony5]

What you are,issuing is that you need to have someone on the other side to buy your currency of choice or someone to sell to in order to sell back a stock you no longer want or someone who has a stock you want to buy who is willing to sell it to you. It is called a market and the auction process ensures spreads are small. Imagine if you got sick and epwanted to sell your Apple stick to pay the medical bills in an emergency and there were no sellers at the time. The spread could be enormous without traders. Equally if you want to exchange currency you might find a job finding someone in say the UK who wants to exchange with you - or of course allow the banks to gouge you with a terrible rate.

Unlike real investors who are in for the long term, the speculators generally don't own the actual thing they are trading; they just buy and sell derivatives of some type. This provides no liquidity at all and is of no benefit whatsoever to anyone except those who buy and sell the same derivatives.

Then how do you explain that several major traders, one of them the rated No. 2 in the world, came in serious liquidity problems because of this event.

[Oceanbat]

Always gratifying to see traders and brokers getting shafted and losing their shirts, jobs and future. All margin trading trading of stocks and currencies should be banned globally, and all short-term trading should be taxed at 200%. Then we might get back a little bit of sense in markets.

Who is going to take the other side when you want to do something?

I dont follow you.

When I want to do something, I just do it. I dont hedge it or take bets for or against it.

If I transfer funds from one currency to another I actually do it at the time, in what amounts to a matched bargain, and I do it because I want the funds in the second currency or perhaps because I think that the second currency will give me a better return long-term than the first.

And if I buy shares it's because I expect the share to do well over time, and again I do it in what amounts to a matched bargain. If I dont think that the share has long-term potential then I either dont buy it or, if I already own it, I sell it.

What I dont do is bet that something I dont own and dont want to own will lose value in the space of an hour or a day or a week or a month.

So short-term trading and margin trading and spread-betting and such-like do not form any part of my requirements, and I sincerely believe that they are largely responsible for many of the economic crises that have befallen the world over the last few decades, with the other main culprits being other forms of debt, and the greedy and incompetent people who seem to be running things.

You need liquidity. Different traders with different objectives provide that. They reduce transactions costs and spreads. That's what makes a market.

OB

[Oceanbat]

What you are,issuing is that you need to have someone on the other side to buy your currency of choice or someone to sell to in order to sell back a stock you no longer want or someone who has a stock you want to buy who is willing to sell it to you. It is called a market and the auction process ensures spreads are small. Imagine if you got sick and epwanted to sell your Apple stick to pay the medical bills in an emergency and there were no sellers at the time. The spread could be enormous without traders. Equally if you want to exchange currency you might find a job finding someone in say the UK who wants to exchange with you - or of course allow the banks to gouge you with a terrible rate.

Unlike real investors who are in for the long term, the speculators generally don't own the actual thing they are trading; they just buy and sell derivatives of some type. This provides no liquidity at all and is of no benefit whatsoever to anyone except those who buy and sell the same derivatives.

You trade against speculators though. They reduce your transaction costs.

OB

[swissie]

CHF/THB of 38 is a "knee-jerk" reaction. Long term CHF/THB will average between 33 to 35.

Futures Trading (margin trading) is a Zero-Sum Game. For every 1 Dollar winner, there is a 1 Dollar loser (minus commission)

---------------------------------------------------------------------------------------------------------.

The Swiss-Export oriented companies had now over 3 years time to prepare for the inevitable. It was clear from the very beginning that that the EURO/CHF peg was not designed for eternity.

Swiss Exports will get more expensive. Fine. But with the same highly valued CHF one can import things much cheaper (How about fuel, food, and everything else.) How much more spending money will this put into the pockets of Swiss-Consumers?) and therefore fuel the domestic-economy?

-------------------------------------------------------------------------------

To me it's clear: The Swiss Export-Tycoons have already taken up this subject (once more) to put pressure on the comparatively high income level of the Swiss working populace. They will not rest, until they have managed to knock down the lower income segment to the "Hartz 4 / Eternal Temporary Employment-Level" as it has been gloriously implemented in Germany and basically in the rest of the "Western-World" already. (Europe/USA.)

As Warren Buffet said (probably the most successful long-term investor alive). = There is a global Class-War raging, and we (the people that own 90 % of all tangible assets of this world will win this war thanks to "Globalization".

The future looks bright. Cheers.

How will the Swiss export tycoons lower the value of the CHF?

No need for that. As far as their capacity to produce goods from worldwide production facilities is concerned (Swiss Chocolate made in Brazil") can turn them from exporters to importers in no time at all. Perfectly legal. As far as their "Private Assets" are concerned they are extremely diversified. Ranging from a currency basket to real estate in the Caribbean to Chinese porcelain rarities dating back to the beginning of China. A well diversified crowd. A currency spike as experienced recently is only a "blimp" on their computer screen.

Unfortunately, common mortals have no opportunities to diversify in such a manner. I can make such statements as mentioned above, because I was an an active member of the Circus for 35 years.

Fortunately, now I am retired and no longer a member of the Circus.

Cheers.

How I know this?

[KittenKong]

Then how do you explain that several major traders, one of them the rated No. 2 in the world, came in serious liquidity problems because of this event.

Easy: they allowed their clients to trade derivatives without insisting on them having proper cover. So when the losses exceeded the value of the account the trading company had to assume the rest of the loss, which they could not do.

It all boils down to (yet another) stunningly mismanaged credit-based bodge-up.

[KittenKong]

Unlike real investors who are in for the long term, the speculators generally don't own the actual thing they are trading; they just buy and sell derivatives of some type. This provides no liquidity at all and is of no benefit whatsoever to anyone except those who buy and sell the same derivatives.

You trade against speculators though. They reduce your transaction costs.

I dont think that most of them do, for the reasons I gave: they aren't trading the actual item.

If traders actually bought and sold the real things that they supposedly trade then brokers would get commission and governments would make something out of taxing the deal (UK stamp duty, for example). But they don't.

[Oceanbat]

Unlike real investors who are in for the long term, the speculators generally don't own the actual thing they are trading; they just buy and sell derivatives of some type. This provides no liquidity at all and is of no benefit whatsoever to anyone except those who buy and sell the same derivatives.

You trade against speculators though. They reduce your transaction costs.

I dont think that most of them do, for the reasons I gave: they aren't trading the actual item.

If traders actually bought and sold the real things that they supposedly trade then brokers would get commission and governments would make something out of taxing the deal (UK stamp duty, for example). But they don't.

They do though. You might get not agree with what they do morally but they do form a vital part of the market. If only long term investors traded in the secondary market how would you ever get out? If you offer stock at 1.1 and the bid is 1. A speculator lifts your offer. That's ok right? That's liquidity and different investors with different objectives. They are an integral part of the market. Regardless of whether you approve of what they are doing.

OB

[KittenKong]

Correct me if I'm wrong but don't traders determine the market price? Don't the FX traders have to have a certain percent of the cash on deposit and if there is too much movement they get a margin call to put up more money?

As far as I know this is exactly what didnt happen with the companies that went bust over the last couple of days; they were obliged to assume the losses.

FX trading is different to trading in stocks and it is the latter than interests me more, though I appreciate that it is not the topic of this thread. Even so, people trading (as opposed to investing) both do generally deal with derivatives or leveraged representations of the item rather than the actual item itself. I am against this.

[SheungWan]

What you are,issuing is that you need to have someone on the other side to buy your currency of choice or someone to sell to in order to sell back a stock you no longer want or someone who has a stock you want to buy who is willing to sell it to you. It is called a market and the auction process ensures spreads are small. Imagine if you got sick and epwanted to sell your Apple stick to pay the medical bills in an emergency and there were no sellers at the time. The spread could be enormous without traders. Equally if you want to exchange currency you might find a job finding someone in say the UK who wants to exchange with you - or of course allow the banks to gouge you with a terrible rate.

Unlike real investors who are in for the long term, the speculators generally don't own the actual thing they are trading; they just buy and sell derivatives of some type. This provides no liquidity at all and is of no benefit whatsoever to anyone except those who buy and sell the same derivatives.

I'll give you a D- for a spirited meandering effort to try and understand a market which you don't.

Edited January 17, 2015 by SheungWan

[Oceanbat]

What you are,issuing is that you need to have someone on the other side to buy your currency of choice or someone to sell to in order to sell back a stock you no longer want or someone who has a stock you want to buy who is willing to sell it to you. It is called a market and the auction process ensures spreads are small. Imagine if you got sick and epwanted to sell your Apple stick to pay the medical bills in an emergency and there were no sellers at the time. The spread could be enormous without traders. Equally if you want to exchange currency you might find a job finding someone in say the UK who wants to exchange with you - or of course allow the banks to gouge you with a terrible rate.

Unlike real investors who are in for the long term, the speculators generally don't own the actual thing they are trading; they just buy and sell derivatives of some type. This provides no liquidity at all and is of no benefit whatsoever to anyone except those who buy and sell the same derivatives.

Then how do you explain that several major traders, one of them the rated No. 2 in the world, came in serious liquidity problems because of this event.

Leverage. But I assure you most IB's got crushed on this. Only 2 weeks ago SNB said the peg was an integral part of monetary policy. They lost a lot of credibility over this.

OB

[SheungWan]

What you are,issuing is that you need to have someone on the other side to buy your currency of choice or someone to sell to in order to sell back a stock you no longer want or someone who has a stock you want to buy who is willing to sell it to you. It is called a market and the auction process ensures spreads are small. Imagine if you got sick and epwanted to sell your Apple stick to pay the medical bills in an emergency and there were no sellers at the time. The spread could be enormous without traders. Equally if you want to exchange currency you might find a job finding someone in say the UK who wants to exchange with you - or of course allow the banks to gouge you with a terrible rate.

Unlike real investors who are in for the long term, the speculators generally don't own the actual thing they are trading; they just buy and sell derivatives of some type. This provides no liquidity at all and is of no benefit whatsoever to anyone except those who buy and sell the same derivatives.

Then how do you explain that several major traders, one of them the rated No. 2 in the world, came in serious liquidity problems because of this event.

Leverage. But I assure you most IB's got crushed on this. Only 2 weeks ago SNB said the peg was an integral part of monetary policy. They lost a lot of credibility over this.

OB

...and by-passed stops. Just waived goodbye.

[Oceanbat]

What you are,issuing is that you need to have someone on the other side to buy your currency of choice or someone to sell to in order to sell back a stock you no longer want or someone who has a stock you want to buy who is willing to sell it to you. It is called a market and the auction process ensures spreads are small. Imagine if you got sick and epwanted to sell your Apple stick to pay the medical bills in an emergency and there were no sellers at the time. The spread could be enormous without traders. Equally if you want to exchange currency you might find a job finding someone in say the UK who wants to exchange with you - or of course allow the banks to gouge you with a terrible rate.

Unlike real investors who are in for the long term, the speculators generally don't own the actual thing they are trading; they just buy and sell derivatives of some type. This provides no liquidity at all and is of no benefit whatsoever to anyone except those who buy and sell the same derivatives.

Then how do you explain that several major traders, one of them the rated No. 2 in the world, came in serious liquidity problems because of this event.

Leverage. But I assure you most IB's got crushed on this. Only 2 weeks ago SNB said the peg was an integral part of monetary policy. They lost a lot of credibility over this.

OB

...and by-passed stops. Just waived goodbye.

Not a good start to the year for sure....

OB