LONDON, Jan. 21, 2015 /PRNewswire/ -- "The Swiss National Bank has thrown in the towel and given up debasing its own currency for the sake of those who destroyed Swiss banking secrecy and create unlimited euros and dollars out of nothing. The coming NATO Russia war and additional Charlie Hebdo style false flag terrorist stunts; the inevitable cutoff of GAZPROM gas, the return of a black swan to world financial markets, the breakup of the eurozone, deflation and the collapse of the euro...for all these reasons and more the Swiss had to act. They did the right thing."
- Daniel Bruno, Chartered Market Technician at www.fxboss.info
www.firstnationalib.com is a boutique forex broker with proprietary trading software and in 2010 became the first forex broker to accept bitcoin. It has served as a hedge fund and forex trader refuge since the Cyprus bank bailin of 2012. Since then, FNIB has been advising clients to avoid shorting the franc on its blog, www.fxinfo.org
Forex and Hedge fund Bloodbath, FNIB.co Unscathed
In this latest debacle, Deutsche bank lost $150 million dollars. Barclays lost $100 million. Citigroup lost $150 Million. FXCM Inc., which handled a record $1.4 trillion of trades by individuals last quarter, said clients owe $225 million on their accounts after the Swiss National Bank's decision to abandon the franc's cap against the euro roiled markets worldwide. Global Brokers NZ Ltd. said losses from the franc's surge are forcing it to shut down. IG Group Holdings Plc estimated an impact of as much as $45.5 million and Swissquote Group Holdings SA set aside 25 million francs ($28.4 million).
Last week, in the space of a few hours after GAZPROM announced the shutoff of gas to six countries of the eurozone, the franc surged 41 percent versus the euro, the biggest gain on record, and climbed more than 15 percent against the US dollar. FXCM lost 90 percent of market cap before the open. Its shares were cut to sell from neutral by Citigroup Inc., which lowered its price target to $5 from $17. Foreign-currency brokerage Gain Capital Holdings Inc. lost 25 percent and Interactive Brokers Group Inc. fell 9 percent in early New York trading.
The U.S. Commodity Futures Trading Commission allows investors to put down as little as 2 percent of the value of their foreign-exchange bets. Brokers may get stuck with the balance of losses suffered by clients who used leverage, borrowed on credit cards, or did both to bet against the franc. The SNB ended its three-year policy of capping the franc at 1.20 per euro a week before the European Central Bank meets to discuss government bond purchases to boost the euro-area economy. Such a policy, known as quantitative easing, could spur pressure on the franc to appreciate against the euro. The SNB spent billions defending the currency cap after introducing it in September 2011.
The SNB's move resulted in "exceptional volatility and extreme lack of liquidity," Alpari (UK) said on its website. That resulted in the majority of clients sustaining losses that exceeded their account equity, with the shortfall passed onto the company, it said. IG Group Holdings Plc (IGG) estimated an impact of as much as 30 million British pounds ($45.5 million) and Swissquote Group Holdings SA set aside 25 million francs ($28.4 million). Brokers CMC Markets Plc, FxPro Group Ltd. and OANDA also said they suffered losses on the franc's jump.
Info: www.firstnationalib.com. Contact Daniel Bruno at 650-933-5668.
SOURCE First National Innovation Brokers