Originally Posted by
92redragtop
Damn this thing went sideways quickly (shadow banking will get a little spotlight with this)....
(Globe and Mail)
The financial carnage continues to spread from the Swiss National Bank’s decision to abandon its currency peg with the euro. Two foreign exchange trading platforms have already declared insolvency, Global Brokers NZ Ltd. in New Zealand and Alpira UK Limited in London. There are also morbid rumours surrounding Swiss-based Dukascopy Bank SA on Twitter. In the U.S., FXCM Inc. appears to be in its death throes, trading 75 per cent lower in pre-market trading.
The forex traders do not, however, represent a systemic risk to the financial system. The damage to global macroeconomic-focused hedge funds is a bigger issue for investors. Business Insider attempted to survey the damage,
“Large global macro hedge funds with big short positions in the Swiss franc, are staring massive losses in the face after the Swiss National Bank shocked markets…Data from the Commodity Futures Trading Commission released on Friday showed net short positions of 24,171 contracts on the Swiss franc, the largest since June 2013. Adding in 662 short option contracts gives a combined position of 24,833 contracts or $3.5-billion at the current rate of around 0.90 franc to the dollar.”
“Hedge Funds Got Whacked By The Swiss Franc Rally” – Business insider
“SNB Bombshell: The Aftermath – Thoughts From 15 Major Banks” – Forex Live
“SNB fall out news repository” – Forex Live
“European Markets Still Jumpy After Swiss National Bank Scraps Currency Cap” – Wall Street Journal