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"To put the Swiss franc move in perspective, in the currency cross rates for free-floating major foreign exchange currencies — like the Swiss franc or the U.S.
by rsync 12y ago
"To put the Swiss franc move in perspective, in the currency cross rates for free-floating major foreign exchange currencies — like the Swiss franc or the U.S. dollar, the euro or the British pound sterling — a 2 or 3 percent move would be considered big. A 20 percent move is outlandish, a freak black swan event without precedent."
It's not a black swan event if it was predicted, widely, well in advance. Smart, reasonable people declared the policy unsustainable from day one. One good example being Mike Shedlock at globaleconomicanalysis.blogspot.com.
- junto 12y agoGenuine question then. If you had money to burn (I.e. gamble) where would be the smart place to put it over the short to medium term, and see a tidy return?
- adam419 12y agoYou're missing the point of a black swan. An event is a black swan to the Turkey, not the Butcher.
- math 12y agoHow do you know that you should listen to Mike on this but not the things he said that turned out to be wrong (seemingly more than half lately)? https://www.backrecord.com/person/mike-shedlock-(globaleconomicanalysis) https://www.backrecord.com/person/mike-shedlock-(globalecono...
- Mvandenbergh 12y agoIt doesn't even have to be predicted to not be a black swan. To qualify it has to be so far outside the range of events accepted as likely that it breaks models used to mitigate risk. This was nothing like that. A 20% move in a cross between two free floating currencies probably would qualify because the only things that would cause it are catastrophic events (themselves black swans). A 20% swing after a peg is dropped is exactly the kind of thing that a model would predict, therefore this could only be a black swan if the peg being dropped was absolutely unthinkable which it obviously wasn't.