Friday, January 16, 2015


Citigroup lost $150 million.  Ditto DeutschBank.  There's blood all over the place but so far only one or two real horror tales where a firm might go under.  Citigroup can well absorb the number as the market seemed to recognize, the stock price barely moving.  If they got aggressive early on they could have probably made it all back in the morning but I guess aggressive trading for one's book is a no-no these days.  Probably might take them now two or three days to get square.  But not for everybody else.  The repercussions from this are just beginning to be felt.

Remarkably, everyone is mad at the Suissies.  "They said they would support the peg," wailed one clown on the telly this morning who was clearly long and very wrong the Euro.  Of course it didn't bother him to be trading when the SNB had his back(side).  Take your losses, shut up and carry on.  Ain't nothin' guaranteed these days.

Well, except for QE coming to the Eurozone near you it appears.  Not a soul today so much as whispered the thought that Mario would not move on the 22nd; the only issue left outstanding was how much.  It better be big said everyone or else we are in real trouble as though that's not what we are in right now.  Super Mario is facing the Super Liquidity Trap of a lifetime.  Whatever number he comes up with comes right Over Here into Treasuries or stays Over There in Bunds and whatever the Dutch have these days, or into Gold.  One place it does NOT go is into a liquidity pool to stimulate economic growth in   matter   how   the   plan   is   structured.  But the poor bugger has to do it because the whole world expects it of him.  I'm tellin' ya, "Sr, Il Presidente"  is sounding better and better.

One overlooked aspect to this whole mess is where does Switzerland come out in all of this?  I can remember many years ago in London getting the FT on one particular day of the week--I forget witch--to read the unemployment numbers.  Switzerland would report on a regular basis unemployment of 345...or...293...or...401...or, as it happened one day...2.  We haven't  seen that for a while and we will not be seeing that anytime soon.  The Swiss have just made themselves uncompetitive and the result of that little fact is going to be interesting to watch.  The again, as the Swiss Miss who used to work for me despite being twice as smart put it today, "Who needs exports anyhow."  If you manage gazillions of international funds as does she, I guess you CAN put it that way, and when you look at it rightly, that's what Switzerland does. It's not really a country, it's a state of mind.  She also pointed out that under some agreement signed when the Pope was a Protestant, certain cantonals got a cut in the profits of the SNB and since the peg, there have been damn few of those.  Ah, Federalism!  In the end, because the town of Underskiliften came up a bit short of the ready at the start of the year and jumped up ugly, the entire international financial world takes one right between the horns.  It's truer than ever before.  You can't make this stuff up.

Holiday Over Here on Monday.  It will be all about Somewhere Else.

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