CHF: Safe Haven or Mirage?

[*T*]

CHF: Safe Haven or Mirage?

What say ye, iTulipers?

[Tron]

Re: CHF: Safe Haven or Mirage?

CHF: Safe Haven or Mirage?

What say ye, iTulipers?

All I know is that my Canadian dollar has been crashing hard against the USD and the Swiss Franc has been stable.

My bank lets me order CHF bills online then I pick them up at my branch. Been doing this more lately. Also taking delivery on Gold Maples.

-Eric

[phirang]

Re: CHF: Safe Haven or Mirage?

Switzerland is crappy money-luandering haven.

Stick to Yen: Japan actually matters.

[Tulpen]

Re: CHF: Safe Haven or Mirage?

CHF: Safe Haven or Mirage?

What say ye, iTulipers?

What does Switserland produce?

Enough said.

[Andreuccio]

Re: CHF: Safe Haven or Mirage?

What does Switserland produce?

Fine watches and chocolate.

[Tulpen]

Re: CHF: Safe Haven or Mirage?

Fine watches and chocolate.

Don't forget the army knifes

[Tron]

Re: CHF: Safe Haven or Mirage?

BIS is there...

Also, 1/3 of the world's wealth is in Switzerland.

Also, Switzerland is considered a safe haven as their country has never been colonized. They're surrounded by alps so it's not so easy to roll on in with your tanks and take over. It was last on Hitler's list of countries to take over.

After the crash in 1987 CHF went up over 20%. VIX at that time was well over 100

[tastymannatees]

Re: CHF: Safe Haven or Mirage?

Another view might be that when times are tough people will buy chocolate/ survival knives and pass on the new Toyota or latest laptop

[Guest]

Re: CHF: Safe Haven or Mirage?

I find Tron's observation more sober, and we are in an exceedingly sobering moment. The humor regarding the worthiness of Swiss accounts and CHF is instead perhaps a little glib? May not be the very best safe haven, but it's on the short list. Why then diss it, other than engaging in a little idle jocularity? 1/3 of the globe's wealth s deposited there? Uh, we are presuming the collective wisdom of this little group is more astute than that of 1/3 of the world's money? :rolleyes:

BIS is there... Also, 1/3 of the world's wealth is in Switzerland. Also, Switzerland is considered a safe haven as their country has never been colonized. They're surrounded by alps so it's not so easy to roll on in with your tanks and take over. It was last on Hitler's list of countries to take over. After the crash in 1987 CHF went up over 20%. VIX at that time was well over 100

[*T*]

Re: CHF: Safe Haven or Mirage?

CHF: Safe Haven or Mirage?

What say ye, iTulipers?

My concern is the ratio of UBS' liabilities to GDP...

[Supercilious]

Re: CHF: Safe Haven or Mirage?

I believe it's a a pretty safe bet over longer term (6-12 months), but with all this volatility it depends on your entry point in the trade.

[GRG55]

Re: CHF: Safe Haven or Mirage?

BIS is there...

So is half the United Nations. I suppose all the expense accounts keep the economy going, but not sure what that has to do with a currency choice.

Also, 1/3 of the world's wealth is in Switzerland.

But how much of it is in Swiss Francs?

Also, Switzerland is considered a safe haven as their country has never been colonized. They're surrounded by alps so it's not so easy to roll on in with your tanks and take over. It was last on Hitler's list of countries to take over.

And how does middle 20th century European history factor into a currency decision in a computerized, globalized world, where traders can move massive amounts with a few keystrokes?

After the crash in 1987 CHF went up over 20%. VIX at that time was well over 100

• In 1987 the Swiss Franc was convertible; today it is not.
• In 1987 the Swiss economy and currency competed with a variety of European countries, most of which, by comparison, were mismanaged [Italy comes particularly to mind :p]; today the Swiss have to contend with the Euro and simply cannot allow their Franc exchange rate get too far out of line with the Euro.
• Go to Geneva and have a look across Lac Leman at night and you'll notice the lighted signs that adorn the tops of the buildings that line the lakeshore advertise two things, and only two things...expensive watch manufacturers and private banks; there's a message in that. ;)

The Swiss Franc was a no brainer bet against the US$ in late 2006. Today a bit harder to say that.

[jk]

Re: CHF: Safe Haven or Mirage?

just read a piece somewhere [where, i can't remember- i read a lot] comparing switzerland and iceland. countries with overgrown banking systems with balance sheets far larger than the countries' gdp's. with recent questions about ubs, there is at least some bite here. the soundness of the big swiss banks is definitely relevant to the question of the soundness of the swiss franc.

[Guest]

Re: CHF: Safe Haven or Mirage?

USD is much better, bcoz it's so big and "ubiquitous". EURO is clearly also much better than the hapless CHF, bcoz it's also so big and "ubiquitous", (albeit a bit fractiously composed). Japanese Yen is better, because Japan is a known global powerhouse and Mrs. Watanabe is indefatigable (even though they've adopted a national policy of using their currency for toilet paper for the past 15 years via truly gargantuan mercantilist over-issuance). AUS, NZD, CAD, clearly all tower above the drab, unvarnished and diminutive CHF. So it seems fully adjudicated - among all the world's currencies, factoring robustness of banking law, history of banking privacy, fiscal conservatism, the CHF is an overrated, lowly creature indeed. In a world where credit derivative paper has seeped into every nook and cranny the world over, the CHF contamination with that bilge has placed it irrevocably last in the beauty lineup.

Next idea? Well, now that we've got that sorted out it's clear that the Japanese Yen is the only buy around! Right? Let's all climb onto Mrs. Watanabe's back for a piggyback ride! Or are we to clamber onto the King Kong dollar here?

[GRG55]

Re: CHF: Safe Haven or Mirage?

USD is much better, bcoz it's so big and "ubiquitous". EURO is clearly also much better than the hapless CHF, bcoz it's also so big and "ubiquitous", (albeit a bit fractiously composed). Japanese Yen is better, because Japan is a known global powerhouse and Mrs. Watanabe is indefatigable (even though they've adopted a national policy of using their currency for toilet paper for the past 15 years via truly gargantuan mercantilist over-issuance). AUS, NZD, CAD, clearly all tower above the drab, unvarnished and diminutive CHF. So it seems fully adjudicated - among all the world's currencies, factoring robustness of banking law, history of banking privacy, fiscal conservatism, the CHF is an overrated, lowly creature indeed. In a world where credit derivative paper has seeped into every nook and cranny the world over, the CHF contamination with that bilge has placed it irrevocably last in the beauty lineup.

Next idea? Well, now that we've got that sorted out it's clear that the Japanese Yen is the only buy around! Right? Let's all climb onto Mrs. Watanabe's back for a piggyback ride! Or are we to clamber onto the King Kong dollar here?

The Swiss may be famously cautious and careful to adopt "newfangled ways of the world", but having decided some years ago that it's okay to debase their currency like everyone else, they have quickly become just as adept...:eek:

...In the meantime, Zürich has begun to feel the first shock waves from the banking tsunami. Switzerland's largest city is at the mercy of its banks: For the almost 400,000 people who live there, 42,000 of their jobs come from the financial sector. Last year the finance industry paid around a third of the city's taxes.

The champagne years are over: For 2008 and the next two years the banking metropolis projects a tax shortfall of well over half a billion Swiss francs. That would put one of the richest cities in the world firmly in the red...

So how would we expect the Swiss to respond? Stalwart? Sober? Fiscally conservative?

Appears they are following to the letter the script of the US Treasury and Fed, starting with...

...Swiss Economics Minister Doris Leuthard on Thursday told a Swiss radio station that "we in no way would want one of our big banks to find itself in a serious crisis that might lead to bankruptcy. The federal government would absolutely prevent that." James Nason, spokesman for the Swiss Bankers Association, told the Associated Press on Thursday that "we don't see any sign of a banking crisis. The Swiss financial center is proving to be remarkably resilient."...

Sound familiar?

Then we have...

...Finally on Tuesday came a special meeting. The government declared itself "worried," but determined the state of the banks to be "secure overall," according to Justice Minister Eveline Widmer-Schlumpf. On Wednesday the Swiss Central Bank took part in a collective move with other central banks and lowered their prime interest rate.

Central bank calls shock interest rate cut

...The SNB had decided only last month to hold its key interest rate target at 2.75 per cent to curb inflation and was not due to meet again on the issue until December.

But it said in a statement that its priorities had recently changed.

"The global financial crisis has intensified and is having a considerable impact on the international economy.

"The Swiss economy is also affected by these developments. In view of the improved inflation outlook... the SNB is now able to loosen its monetary policy reins," the statement said...

And ultimately there is a plan B: should UBS really go under, a secret agreement would certainly come into effect and the ECB would spring to its aid. So much for Switzerland's proud independence.

All depressingly familiar, wouldn't you say?

Link to article...