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Tyler Durden

Tyler Durden is a reference to the lead character in Fight Club. It's the pseudonym for Zero Hedge's key author(s) used to hide their identities.

Articles by Tyler Durden

Since 2014, European Banks Have Paid €23 Billion To The ECB… And Now Face Disaster

1 day ago

Earlier this morning, there was an added wobble in European bond prices after an unconfirmed MNI report said the ECB could delay the launch of QE on Thursday and make it data dependent. While skeptics quickly slammed the story, saying it was just a clickbait by MarketNews…

About this MNI story on a possible delay in ECB QE announcement:
1) No substance, including from the ECB “sources”
2) Let’s hope the story is as accurate as the previous ones
— Frederik Ducrozet (@fwred) September 10, 2019
… it does highlight just how sensitive the bond market is to an announcement of aggressive easing by the ECB when it meets on Thursday, Sept 12, where consensus generally expects a significant easing package, including a -20bp rate cut (followed by -10bp cut later on),

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UBS To Start Charging Rich Clients With Negative 0.75 percent Interest Rate

August 2, 2019

For years, European banks were leery of passing on the ECB’s negative -0.40% deposit rate to their clients for fears of deposit flight and other unintended consequences, in the process being forced to “eat” the difference and impacting their interest income.
However, after five years of NIRP, and with the ECB set to unleash even more negative rates in the immediate future, one bank has finally taken a stand: according to the FT, UBS plans to charge a negative interest rate on wealthy clients, those  who deposit more than CHF 2 million with the largest Swiss bank.
While several, mostly smaller, banks in Switzerland and the eurozone already pass on the cost of negative official rates to corporate depositors, most large

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World’s Central Banks End Pact That Limited Selling Of Gold

July 29, 2019

In a surprising announcement on Friday morning, the European Central Bank said the 21 signatories of the 4th Central Bank Gold Agreement (CBGA) “no longer see the need for formal agreement” as the market has developed and matured, and as a result the signatories “decided not to renew the Agreement upon its expiry in September 2019.”
For readers unfamiliar, the first CBGA was signed in 1999 to coordinate planned gold sales by the various central banks. When it was introduced, the ECB notes that “the Agreement contributed to balanced conditions in the gold market by providing transparency regarding the intentions of the signatories. It was renewed three times in 2004, 2009 and 2014, gradually moving towards less

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UBS Tells Managers They Can Hire 1 Employee For Every 5 Who Leave

May 4, 2019

Like the other lagging European investment banks (Deutsche and SocGen immediately spring to mind), UBS is resorting to the last resort of the embattled megabank CEO when shareholders are demanding higher profits ‘or else’.

After a decade where UBS cut thousands of jobs in its investment bank unit, Sergio Ermotti is turning to one of the few business lines where fat can feasibly be cut: UBS’s once legendary asset-management business.
Before the crisis, the Swiss bank held the title of world’s largest asset manager. But it has seen its stature diminish during the intervening years, largely thanks to rise of passive managers like BlackRock (the current title-holder). Though the number of employees at UBS’s

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Gold & Basel 3: A Revolution That Once Again No One Noticed

April 11, 2019

Via The Saker blog,
By Aleksandr Khaldey
Translated by Ollie Richardson and Angelina Siard
cross posted with
Real revolutions are taking place not on squares, but in the quiet of offices, and that’s why nobody noticed the world revolution that took place on March 29th 2019. Only a small wave passed across the periphery of the information field, and the momentum faded away because the situation was described in terms unclear to the masses.
No “Freedom, equality, brotherhood”, “Motherland or death”, or “Power to Councils, peace to the people, bread to the hungry, factories to the worker, and

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Rothschilds To Take Swiss Bank Private In 100 Million Francs Bid 

March 16, 2019

Benjamin de Rothschild’s family plans to take Swiss Bank Edmond de Rothschild (Suisse) S.A. private as it consolidates and simplifies the bank’s legal structure.

According to Bloomberg,  Edmond de Rothschild Holding SA will acquire all publicly held Edmond de Rothschild (Suisse) bearer shares at 17,945 francs per share, a 6.7% premium to Tuesday’s closing price, in a deal worth about $100 million. The Swiss bank, which has long been linked with managing the wealth of countless uber-wealthy families, offers a variety of wealth management service for private and institutional clients, is expected to be delisted from the Zurich exchange. The stock, which traded on Wednesday around 17,500 francs, jumped by more than 8%

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UBS Shares Tumble As French Judge Slaps Bank With $5.1 Billion Tax Evasion Fine

February 20, 2019

In a landmark ruling that sent a clear message to other banks battling misconduct investigations in French courts, a Paris court on Wednesday found UBS guilty of having actively helped some of its wealthy French clients hide money from French tax authorities in undeclared Swiss bank accounts, and ordered the bank to pay a $5.1 billion fine. The fine represents a record sum in France, and isn’t too far below the $6 billion maximum allotted by French law.

Shares of the bank slumped 5% on the ruling.
Regarding the penalty, which followed trials of UBS and its French subsidiary,  trials where the bank was ultimately found guilty, the judge said it reflected the serious nature of the charges.
“The criminal wrongdoings

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Albert Edwards: Investors Should Brace For A World Of Negative Rates, 15percent Budget Deficits And Helicopter Money

February 8, 2019

Eariler this week, when the San Fran Fed published a paper that suggested that the recovery would have been stronger if only the Fed had cut rates to negative, we proposed that this is nothing more than a trial balloon for the next recession/depression, one in which the Federal Reserve will seek affirmative “empirical evidence” that greenlights this unprecedented NIRPy step (in addition to QE of course).
Today, in his latest note to clients after returning from a 2 week vacation in Jamaica, SocGen’s Albert Edwards picks up on this point and cranks it up to 11 writing that “as central banks thrash around for new tools, I have long thought the next recession would trigger the adoption of helicopter money and deeply

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Swiss National Bank Suffers $15 Billion Loss On 2018 Market Rout

January 10, 2019

SNB US Stock Holdings
In the third quarter of 2018, the hedge fund known as the Swiss National Bank did something it had not done in years: it sold stocks. As we showed in November, the overall value of the SNB’s US listed long holdings rose by over $2 billion to $90 billion, but all of this was due to the price appreciation as the central bank sold around $7bn of equities in Q3. This compares to purchases during 1H18 of around $6bn.

SNB US Stock Holdings, Jun 2014 – 2018(see more posts on SNB US Stock Holdings, ) – Click to enlarge

SNB Holdings
Alas, it did not sell enough, and as the next chart showed, some of the SNB’s top holdings would be the stocks that ended up getting hammered the most in the fourth

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Hedge Funds, ETFs, Central Banks Suffer Billions In Losses On Apple

January 4, 2019

It wasn’t that long ago that Apple was the most beloved stock by the hedge fund community, and although in recent months the company’s popularity faded somewhat among the 2 and 20 crowd it is still one of the most popular names among the professional investing community. Which on a day that saw AAPL stock tumble as much as 10% is clearly bad news.
As Bloomberg notes, eight hedge funds that own large stakes in Apple have seen the value of their holdings plunge about $2.13 billion since the company cut its revenue outlook, with AQR Capital Management suffering some of the biggest losses as it saw its holdings decline by about $732 million on Thursday. The firm held 8.8 million shares as of Sept. 30, according to data

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The World’s Biggest Hedge Fund Is Getting Whacked, And Why “Moneyness” Matters

December 12, 2018

Authored by John Rubino via,
A few years ago the Swiss National Bank (SNB) – which traditionally held “monetary assets” like government bonds, cash and gold to back up the Swiss franc – decided to branch out into common stocks.
This was a departure, but for a while a brilliant one. The SNB loaded up on Big Tech like Apple, Amazon and Microsoft, and rode them to massive profits, which enriched both the Swiss people and the SNB’s stockholders (in another departure, it’s a publicly traded company as well as a central bank).
But live by the sword, die by the sword. Turning your central bank into the world’s biggest hedge fund means outsized profits in good times, but potentially serious losses if those

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For The First Time In 25 Years, China Has To Make A Choice Between External Stability And Growth

November 28, 2018

Back in August 2 we reported of a historic event for China’s economy: for the first time in its modern history, China’s current account balance for the first half of the year had turned into a deficit. And while the full year amount was likely set to revert back to a modest surplus, it was only a matter of time before one of the most unique features of China’s economy – its chronic current account surplus – was gone for good.
Fast forward to this weekend, when as part of its summary of Top Macro Trades for 2019, UBS wrote that the loss of China’s current account cushion, softening domestic activity, and upcoming tariffs mean that “for the first time in 25 years, China would have to make a choice between external

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Swiss National Bank Unexpectedly Sold US Stocks In Q3, Dumping Over 1 Million Apple Shares

November 12, 2018

The SNB’s latest 13-F form filings (yes, the Swiss central bank lists its US equity holdings like the hedge fund that it is) to the SEC were released this week. And, like every other quarter, we take a closer look to see what stocks the world’s only hedge fund central bank that prints money out of thin air bought, and on rare occasions, sold. This was one of those rare quarters.
After some modest fluctuations earlier this year, the SNB’s reported equity allocation was unchanged in 3Q at 21% (and includes no bank stocks to avoid conflicts of interest, yet somehow owning a chunk of equity of virtually every other US public company is not a conflict of interest?). This is notable because as JPMorgan writes, the SNB’s

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UBS Warns Trump’s Trade Fights Are ‘Reversing 15-Years Of Global Progress

October 25, 2018

Protectionism has cross-party support in the U.S., and nationalist parties continue to gain traction in Europe. Where there is inequality, there is a surge in protectionism; a risk that could trigger the next global economic crisis sometime around 2020.
The Trump administration’s trade war and a hard Brexit could send tariffs to levels not seen in 15 years, according to UBS economist, as per Market Watch.
The Swiss bank views the U.S. tariffs, along with retaliatory measures (tit-for-tat with China), as the most significant factors boosting the metric. Second, are fears of a hard Brexit, which refers to the potential split between the U.K. and the European Union.
“Combined, these two would add 142 [basis points] to

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Swiss Banks Curb China Travel After UBS Banker Arrested

October 22, 2018

Two major Swiss banks imposed restrictions on staff travel to China after a UBS employee was detained in the country, underscoring the challenges of doing business in a country which is a mecca for banks eager to capture and manage (for a generous fee) the fastest growing fortunes in the world, yet are challenged by a regime that tramples over civil rights.
According to Bloomberg, UBS asked some bankers not to travel to China after the incident, with fellow Swiss bank Julius Baer also imposing a travel ban while Credit Suisse said that so far there was no travel ban in place. The travel restrictions have only affected those bankers who help manage money for clients and haven’t been imposed on the securities unit.

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Swiss Bank Freezes $5 Billion In Russian Money

August 23, 2018

For years, Russian oligarchs and robber barons seeking to park their “unsourced” capital offshore and away from the sticky fingers of the Kremlin, treated Swiss bank accounts (preferably anonymous) with their “no questions asked” customer policies as, well, Swiss bank accounts.
No more.
One of Switzerland’s largest banks, Credit Suisse, has frozen roughly 5 billion Swiss francs ($5 billion) of money linked to Russia to avoid violating U.S. sanctions, according to its accounts, further increasing pressure on Moscow which today saw the ruble tumble to the lowest level in over two years.
The crackdown on Russian funds by the second largest Swiss bank, which owned aircraft surrendered by Russian tycoon Oleg Deripaska and

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Capital Controls Next? Lira Rebounds After Turkey Bank Regulator Limits FX Swap Operations

August 14, 2018

In the first tentative step toward the final option available for Erdogan to halt the Lira’s accelerating collapse – which crashed as low as 7.2362 earlier after the Wellington FX open following the the Turkish president’s latest belligerent comments – namely capital controls, the Turkish Banking Regulation and Supervision Agency imposed a limit on the amount of foreign currency and lira swap and swap-like transactions, which are not to exceed 50% of the bank’s shareholder equity.
Furthermore, new transactions are halted “until current over-shootings mature.”
Whether this tentative move to limit the amount of TRY FX speculation will work remains to be seen: the kneejerk reaction to its announcement helped send the

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The Swiss National Bank Now Owns $87.5 Billion In US Stocks After Q2 Tech Buying Spree

August 10, 2018

In the second quarter of 2018, one in which the global economy was shaken by the rapid escalation of Trump’s trade war, and in which central banks were one after another hinting at their own QE tapering and rate hiking intentions to follow in the Fed’s footsteps, what was really taking place was another central bank buying spree meant to boost confidence that things are now back to normal, using “money” that was freshly printed out of thin air, and spent to prop up risk assets around the world by recklessly buying stocks with no regard for price or cost.
Nowhere was this more obvious than in the latest, just released 13F from the massive hedge fund known as the “Swiss National Bank.” What it showed is that, just like

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Goldman: You Are Asking The Wrong $1 Trillion Question

August 7, 2018

After several months of heated market speculation, to Amazon’s chagrin the question of which stock would be the first to reach $1 trillion in market capitalization was answered when Apple reported strong Q2 results (which included $21 billion in stock buybacks) and its stock soared 9% this week, rising above the very round number and elevating its YTD gain to 23% (Amazon, with a market cap of just under $900 billion, will most likely be second).
To Goldman, however, that was the “wrong $1 trillion question.” Instead, The correct $1 trillion question according to the bank’s chief equity strategist David Kostin, is: what amount of buyback will companies authorize in 2018?
Three weeks ago, we reported that according to

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Credit Suisse: “Our Risk Appetite Index Is Near Panic”

July 7, 2018

Sure, it’s been a bad year for investors, with the S&P posting the smallest of gains in the first half (all of which thanks to tech stocks) after several hair-raising, monthly incidents including February’s vol-spike, April’s real yield scare, May’s Emerging Market massacre and June’s trade war fears as shown in the following Citi chart…
… but it’s hardly been apocalyptic: in fact, most of the shocks that took place were well telegraphed to those who paid attention. And yet, according to Credit Suisse, after the first six months of the year investors are in a state of near shock.

Next Month, Another Mishap – Click to enlarge
According to Credit Suisse economist James Sweeney, “our Global Risk Appetite Index is

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How To Create Your Own Personal Gold Standard And Currency Reserve

July 5, 2018

Via The Daily Bell,

Did you know that for 99.2% of recorded human history, money was backed by a gold standard?
And only for the last 47 years has the world largely moved away from the gold standard.
It is easy to feel like we are on top of the world in 2018. Technology has never been better or more easily accessible. The standard of living is rapidly rising.
But does that mean we should dispense with 5,000 years of monetary policy which led us to where we are today?
Okay, but how do we get the financial system back on the gold standard?
That seems like a monumental task, which would require a critical mass of activists, a new strain of politician, and wresting control from the Federal Reserve… Good luck.
The cool

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US Vs China – Is It ‘Art Of The Deal’ Or Economic Warfare?

July 4, 2018

While monetary tightening remains the main risk for global stock markets, the threat of a trade war continues to dominate the headlines…
The question raised by Donald Trump’s trade agenda with China remains, in essence, extremely simple. It is whether The Donald is engaged in a typical ‘Art of the Deal’ negotiation, where he can suddenly turn on a dime and declare a ‘win’, or whether he is really seriously trying to stop China upgrading its economy by targeting ‘Made in China 2025’.
Such a stance would amount to an act of economic warfare. On this point, it should be understood that some of those in Washington pushing this policy view of China as some kind of strategic rival for global

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Bitcoin Soars Most In 3 Months, Back Above $6,000

July 2, 2018

After crossing below $6,000 for the 4th time in a week yesterday, Bitcoin surged overnight – jumping by as much as 10% at one point, the most in 3 months.

BTC/USD, Daily Jun 2018(see more posts on BTC-USD, ) – Click to enlarge
The 10% surge is a notable outlier after weeks of constant downward pressure, but we note it’s already fading modestly along with the rest of cryptos.

Rest of Cryptos Price Change – Click to enlarge
And while, with Bitcoin down 70% from its highs, it’s easy for the original naysayers to gloat with the “told you so dance”, we note that Bitcoin is still up 155% YoY and as SovereignMan’s Simon Black writes, it’s important to have some historical context when considering the future of

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Cryptos Slide Accelerates Since Congress Warned Bitcoin Poses Threat To US Election

June 30, 2018

Bitcoin has tumbled back below $6,000 in early Asia trading and the rest of the crypto space is following suit. No imediate catalyst for the move – aside from technical pressure – but tougher AML rules in South Korea and US Congress being told Bitcoin is a threat to the US election may have sparked it earlier in the week and this is follow-through.
Bitcoin can’t catch a bid off the weekend’s $6,000 slump…

BTC/USD, Monthly Jun 2018 (see more posts on BTC-USD, ) – Click to enlarge
And as usual, the rest of crypto is following (though we note that Bitcoin had been steady as the rest of crypto fell)…
As we noted, other than just momentum running through the psychological $6,000 barrier, there is little immediate

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China Vows Retaliation With “Same Scale, Intensity” To Any New US Tariffs

April 6, 2018

Trump’s aggressive trade war overtures and China’s initial retaliatory moves have spooked Wall Street over the past week and again on Monday, which helped drive down the Dow Jones by 459 points, with the Nasdaq Composite quickly approaching correction territory. And as the mass exodus continues out of Wall Street’s highest-flying stocks, trade war concerns are sparking political, regulatory and market challenges that could soon derail the global growth narrative for months or even years to come.
According to Reuters, China is preparing aggressive counter-measures of the “same proportion, scale and intensity” if the Trump administration imposes further tariffs on Chinese goods, China’s Ambassador to the United States

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In Unprecedented Intervention, Swiss Central Bank Bails Out Firm That Prints Swiss Banknotes

December 21, 2017

In the most ironic story of the day, the company that makes the paper that Swiss banknotes are printed on was just bailed out by the money-printing, stock-purchasing, plunge-protecting, savior-of-global equities…Swiss National Bank.

– Click to enlarge
While The SNB has a long and checkered history of buying shares in companies… as we have detailed numerous times, it is no stranger to pumping money into companies all over the world…

SNB – US Stock Holdings, Q3 2017(see more posts on SNB Holdings, ).
Including Apple, Alphabet, and Microsoft…
But, as Reuters reports, this is its first acquisition in decades.
The central bank said on Thursday it was purchasing a 90 percent stake in Landqart AG after the company –

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Switzerland Is Well-Prepared For Civilizational Collapse

December 13, 2017

Authord by Alex Tabarrok via, More than any other country, Switzerland’s ethos is centered around preparing for civilizational collapse. All around Switzerland, for example, one can find thousands of water fountains fed by natural springs. Zurich is famous for its 1200 fountains, some of them quite beautiful and ornate, but it’s the multiple small, …

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Jim Grant: “Markets Trust Too Much In The Presence Of Central Banks”

December 12, 2017

Authored by Christoph Gisiger via Finanz und Wirtschaft, James Grant, Wall Street expert and editor of the renowned investment newsletter «Grant’s Interest Rate Observer», warns of the unseen consequences of super low interest rate and questions the extraordinary actions of the Swiss National Bank. Nearly ten years after the financial crisis, extraordinary monetary policy has …

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The Latte Index: Using The Impartial Bean To Value Currencies

December 9, 2017

Like any other market, there are many opinions on what a currency ought to be worth relative to others.
With certain currencies, that spectrum of opinions is fairly narrow. As an example, for the world’s most traded currency – the U.S. dollar – the majority of opinions currently fall in a range from the dollar being 2% to 11% overvalued, according to organizations such as the Council of Foreign Relations, the Bank of International Settlements, the OECD, and the IMF.
For other currencies, the spectrum is much wider. The Swiss franc, which some have called the world’s most perplexing currency, has estimates from those same groups ranging from about 13% undervalued to 21% overvalued.
As VisualCapitalist’s Jeff

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“Gnomes Of Zurich” In Panic As Saudi Corruption Crackdown Sparks Flood Of Money Laundering Inquiries

December 8, 2017

There are two divergent views on the crackdown on corruption by Saudi Arabia’s crown prince, Mohammed bin Salman (MBS), which led to the arrest and detention of 200 princes, ministers and former ministers.
On one hand, it was a masterstroke which will earn political capital with the Saudi people and catalyse an Arab Spring in which MBS is a modernizing reformer who will liberalise Islam.

On the other, it was nothing other than a cynical and desperate attempt to tighten his grip on power and weaken competing clans within the ruling family (especially sons of former King Abdullah) as the nation risks splitting apart due to political and economic fissures. Last week, we noted that former head of the National Guard and

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