Wow. Talk about shock and awe. Destroyed anyone short the Franc. I think the SNB wanted to decouple the Franc from the Euro before QE starts next week.
Absolute turmoil in the markets right now. Oil, copper, US$ index pushing $0.93, 10yr UST at 1.746%. Gold is up to $1,265.
There are $billions in market losses for bad derivative bets. Hidden for now, but will be revealed shortly. I’ll bet some big banks are on the ropes. Deutsch Bank, JPM, BofA, SocGen, Citicorp, Morgan Stanley, Barclays are prime candidates. Goldman Sachs alumni are all in place at central banks, so they have the inside scoop and probably positioned accordingly.
The largest loss known to date from last week’s action by the Swiss National Bank (SNB) occurred at Everest Capital’s flagship hedge fund, Everest Capital Global. According to reports from Reuters, the WSJ and Bloomberg, the flagship fund will close after being essentially wiped out from a bet the Swiss Franc would fall in value. The company was believed to have lost almost all of the flagship fund’s assets of approximately $830 million. How a “hedge” fund could wipe itself out on one strategy calls into question the very meaning of “hedge” fund.
2015 is off to a raging start.