The Swiss National Bank Began Unloading its Biggest US Stock Holdings, incl. Apple, Microsoft, Amazon, Alphabet, Meta

It still bought Tesla though, which is down by 52%. It took massive losses. And it’s got a bunch of Imploded Stocks.

By Wolf Richter for WOLF STREET.

The Swiss National Bank has spent years creating Swiss francs, buying dollars, euros, and other currencies with those francs, and then buying assets denominated in those currencies – including a vast portfolio of US stocks.

But that gig is up, it seems. Asset prices have fallen sharply, and the SNB is unloading. It doesn’t disclose details on its balance sheet, but it has to disclose its US stock holdings in quarterly regulatory filings with the SEC, and it now filed its Form 13F for its Q3 holdings. We’ll get to those in a moment.

The total of “Foreign currency investments” on its balance sheet – which includes US stock holdings plus its other foreign currency investments – peaked in February 2022 at CHF 977 billion ($1.04 trillion at today’s exchange rate). By the end of September 2022, they’d plunged by 17%, or by CHF 160 billion, to CHF 808 billion, the lowest since March 2020:

The composition of the CHF 160 billion plunge in its holdings is a mix of market prices, asset sales, and exchange rates of the CHF to the currencies involved.

The SNB’s US stock holdings.

From the SNB’s filings of Form 13F with the SEC, we can see that the SNB not only took losses from the price declines of its US stock holdings, but that it also sold down most of its largest positions, reducing the number of shares it holds in Apple, Microsoft, Alphabet, Amazon, Meta, etc.

From June 30 through September 30, the value of the SNB’s US stock holdings fell by 8.0 billion, or by 5.4%.

From March 31 through September 30, which had been the peak in terms of the quarterly filings, its US stock holdings fell by $37.5 billion, or by 21.2%.

The value of its US stocks had peaked at the end of Q1 at $177 billion, and by September 30, they’d dropped to $139.8 billion.

Q3 spanned the powerful bear-market rally-and-bust over the summer, with the end effect that the S&P 500 fell 5.3% from June 30 through September 30, and the Nasdaq Composite fell 4.1%.

The SNB is broadly invested in the US stock market. At the end of Q3, it held about 2,770 stocks, including a whole bunch that have become penny stocks, and a slew that went public via merger with a SPAC or via IPO over the past two years and that are now populating my pantheon of Imploded Stocks, such as Carvana.

Let’s take Carvana:

  • December 31, 2021: SNB held 289,105 shares, $67.01 million, at $231.79 per share.
  • September 30, 2022, down to 213,300 shares, at $4.33 million, at $20.30 per share (-91% per share).
  • Today, Carvana closed at $11.88 (up 56% in two days, LOL, but down 96% from its high, and down 41% from the SNB’s booked price on Sep. 30).

The SNB loaded up with these types of stocks that then imploded. It’s kind of funny that it helped enable the craziest US stock market bubble ever.  But now it’s trying to unload them.

Top 50 stock holdings by value.

The SNB cut its holdings (reduced the number of shares) in 42 of the top 50 stocks by value in its portfolio from June 30 through September 30.

The SNB started cutting it holdings of some stocks in Q2 already, such as Apple, Meta, Alphabet, and a bunch of others.

But it was still adding to its holdings in Q2 of stocks that it then started to unload in Q3, such as Amazon, Chevron, etc.

Even Apple is on the chopping block: The SNB cut its holdings since June by 649,000 shares, and since March 31 by 918,000 shares, to 70.14 million shares.

It also has some big winners on the list: oil companies, and it’s also unloading them.

It added to its position in Q3 in only 8 of the top 50 stocks, including of Tesla, whose stock is down 52% from its high. The 8 positions that where it increased the share count since June 30 are marked in bold.

Top 50 Holdings by value As of Sep. 30 Share Count change since
$ Million # shares  Jun 30  Mar 31
APPLE INC 9,694 70,142,608 -649,000 -918,100
MICROSOFT CORP 7,171 30,791,655 -102,700 -101,500
AMAZON COM INC 4,484 39,684,040 -47,400 144,600
TESLA INC 3,037 11,448,877 16,600 357,100
ALPHABET INC 4,844 50,514,240 -222,300 -314,300
UNITEDHEALTH GROUP 2,053 4,065,726 -15,700 -13,700
JOHNSON & JOHNSON 1,863 11,403,816 -1,600 1,300
EXXON MOBIL CORP 1,594 18,256,191 -108,500 -80,600
META PLATFORMS 1,349 9,939,610 -77,000 -309,400
NVIDIA CORPORATION 1,317 10,851,824 7,200 23,600
PROCTER AND GAMBLE 1,313 10,397,973 -200 -83,500
VISA INC 1,267 7,132,219 -61,800 -99,900
HOME DEPOT INC 1,229 4,453,966 -75,800 -68,900
CHEVRON CORP NEW 1,162 8,089,332 -358,900 -260,000
LILLY ELI & CO 1,132 3,500,048 -11,400 -21,700
MASTERCARD 1,070 3,763,457 -22,400 -36,100
PFIZER INC 1,064 24,316,241 -77,200 5,300
ABBVIE INC 1,028 7,658,375 -14,300 1,200
COCA COLA CO 1,000 17,847,594 -18,700 74,400
PEPSICO INC 978 5,992,804 -8,400 4,200
MERCK & CO INC 944 10,959,232 -5,700 18,700
COSTCO 907 1,919,999 -3,600 6,300
THERMO FISHER SCIENTIFIC 860 1,696,527 -400 -10,200
WALMART INC 851 6,561,583 -56,400 -81,200
BROADCOM INC 777 1,750,042 -26,800 -32,700
DANAHER CORPORATION 773 2,993,270 45,300 207,700
DISNEY WALT CO 745 7,893,971 -3,700 21,200
MCDONALDS CORP 740 3,204,957 -20,600 -31,600
ABBOTT LABS 734 7,588,265 -61,600 -70,700
CISCO SYS INC 718 17,945,820 -74,300 -321,800
ACCENTURE PLC IRELAND 706 2,744,938 3,400 9,100
VERIZON 691 18,200,201 -9,300 267,900
NEXTERA ENERGY 668 8,513,682 -500 15,100
BRISTOL-MYERS SQUIBB 656 9,226,857 -228,400 -387,000
SALESFORCE 620 4,307,331 34,500 67,000
TEXAS INSTRUMENTS 619 3,996,283 -9,900 -3,700
LINDE 587 2,178,568 -44,800 -41,400
CONOCOPHILLIPS 574 5,605,529 -31,600 -107,200
COMCAST 568 19,374,429 -249,200 -374,000
ADOBE SYSTEMS 564 2,047,689 1,500 -13,100
PHILIP MORRIS 558 6,717,922 -5,000 -25,100
QUALCOMM 548 4,853,622 -35,200 2,600
CVS HEALTH 542 5,683,010 -10,500 -34,600
UNION PACIFIC 531 2,723,316 -39,500 -61,100
RAYTHEON 528 6,445,414 -28,100 -37,500
AMGEN 522 2,315,026 -101,300 -124,600
LOWES COS 520 2,769,839 -136,500 -148,400
UNITED PARCEL SERVICE 514 3,182,818 5,100 24,600
HONEYWELL 493 2,950,055 -24,900 -31,700
AT&T 476 31,025,262 40,300 95,600

A note about this racket.

All its operations combined generated a massive loss of CHF 142 billion in the first nine months of the year, nearly all of it due to these foreign currency investments, which include the losses related to the decline in prices of the stocks and bonds and CHF 24 billion in losses related to exchange rates.

When the SNB was printing Swiss francs to buy foreign-currency-denominated assets, it wasn’t actually doing QE in Switzerland; it was more like doing QE in other countries.

The SNB’s purchases of US stocks – with dollars that were bought with francs that it had created out of nowhere – had a similar effect as if the Fed had bought US stocks.

So now the process is reversing – a form of QT in other countries as the SNB is shedding some of its assets, and losing its butt on others.

What the SNB did was one of the most fabulous central-bank rackets ever, empowered by global speculators and investors that kept buying these Swiss francs that the SNB was creating and selling, and their appetite was driving up the currency’s exchange rate, and the SNB took advantage of it to print more francs, sell more of them for foreign currency – ostensibly to push down the exchange rate of the CHF against the euro, the dollar, and other currencies – and buy more stocks and bonds denominated in other currencies.

So now this tiny country has a $1 trillion portfolio of foreign assets that it has purchased at essentially zero cost – meaning with money it created at zero cost – and its paper losses are just squandering some of the cream of that wondrous racket.

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  154 comments for “The Swiss National Bank Began Unloading its Biggest US Stock Holdings, incl. Apple, Microsoft, Amazon, Alphabet, Meta

  1. J-Pow!!! says:

    I am ready to pivot!!!! There is no need for panic@!!! I will fix all of this!!!! Te ecomony is doing great!!!!! But crypto!!! Buy real estate!!!!!

      • Leo says:

        Leo: “J-Pow, if you Pivot now, we will face hyperinflation.”

        J-Pow: “Leo, I have to give enough time to 1%, so that they can sell all this crap to the other 99%. Once thats done, I can do real QT to eff 99% and then start another QE for my 1%. Till then real negative interest rates and Jawboning to allow bear market rallies. ”

        Leo: “J-Pow wouldn’t they 99% figure it out?”

        J-Pow: “Leo, the 99% don’t read wolfstreet and so I can use their greed to eff them. With high inflation, I ensure that 99% have nowhere to go. Already, the housing is so unaffordable that the next generation will just have to become debt slaves to afford shelter!”

        Leo: “So is your goal converting the next generation into debt slaves?”.

        J-Pow: “Only the 99% of next generation, the remaining 1% will rule in this new Oligarchy that I am creating. Don’t mess with the Fed.

        I am more powerful than Potus, I create trillions with press of a button bypassing congress, and when the Potus wanted to spend a few billions on student loan forgiveness, he gets blocked.”

        Leo: “J-Pow, How can I join you?”

        J-Pow: “First become smart enough to be worth > $30 Million. Till then, you don’t qualify. “

      • Mike says:

        Wolf, will the Swiss Franc decline against the value of the USD in the coming months as the recession unfolds? What are the long term prospects for the Swiss Franc??

    • Aaron Fairchild says:

      Don’t just buy crypto buy FTT!

      Down almost 90% and I heard on Twitter Elon is about to buy them so it’s going to 🚀

      Gonna be $10 in a week😂🤦😂

  2. Not Sure says:

    If one of the goals was to push down the exchange rate, then they didn’t really do at zero cost, at least not in real terms. Didn’t they effectively put a whole bunch of swiss francs into circulation? Who knows what the lag time will be, but it seems extremely likely that this is going to come back to bite them hard in the future in the form of currency devaluation. For a small country who’s only exports are small-batch luxury watches and crooked banking products, I would think a future currency collapse would be a bad thing. Who is going to want to keep their money in a country with a destabilized currency?

    • Wolf Richter says:

      If they start having issues… It’s pretty easy to undo this. All they have to do is sell their foreign currency assets. They don’t even care about price. This will bring back the francs to the SNB.

      Those francs aren’t in Switzerland. They’ve been chased by global hedge funds and currency traders for many years. They’re an instrument of hedging and speculation. Those francs are not chasing after goods and services in Switzerland.

      • Augustus Frost says:

        It’s not quite so simple if they incur big losses. Yes, they can reverse the process, but selling at lower prices means there will still be more CHF out there than when they started.

        • Wolf Richter says:

          True. But they bought a lot of this stuff years ago, so losses from the peak, but not necessarily losses from the purchase cost. They started buying Apple back in 2012 and bought through Q1. So I don’t know what the average cost per share is, but it’s gotta be pretty low. And for now, they’d realize a huge profit selling them, even though the shares are down from the peak.

        • cas127 says:


          I do think this may work out to be more complicated and with less easily foreseen consequences.

          Since this kind of CB operation goes to the heart of the CB “money from nothing” paradigm it is probably worthwhile for everybody to think through all the dynamics for a bit.

          Ultimately, newly created Swiss francs *are* a claim against Swiss real assets (in extremis, what else can they be used for?).

          I think you may be saying that what matters is if the Swiss CB’s equity holdings’ value turned out to grow faster than the expansion of its global supply of Swiss francs.

          If it did, those intl equity gains can be used to buy up the additional francs before they are used to inflate the prices of Swiss real assets. The Swiss come out ahead on a net basis.


          But the holders of Swiss francs get a say too. They don’t have to sell into an FX buy out by the CB…they can choose to use their new fiat francs to buy Swiss real assets (creating Swiss inflation).

          Things get complicated…and unpredictable when you manipulate the fundamental means of exchange/store of value of a nation.

        • Sams says:

          Reply to CAS127.
          Yes, Swiss Francs “are” a claim against Swiss real assets. Still, there might be one or more catches buying Swiss real assets. Fist large Swiss companies are traded at stock exchanges outside Switzerland in other currencies than Swiss Francs and then already on the “outside”.

          What is left is real estate and smaller companies. For smaller companies and real estate to rent, the possible earnings do not support sky high prices. The earnings will be in Swiss Francs and that have to be exchanged for a different currency and the Swiss CB can again interfere to their benefit.

          Buying a house or a farm is probably possible, but the Swiss like other Europeans may have or put in place some requirements that discourage speculators and “investors”. Like that you must live in the house/at the farm more than half the year and to buy a farm you have to be qualified. That is have agricultural education.

          The holders of Swiss Francs may choose to buy Swiss real assets, but they may not be able to.

      • Reserves go Poof says:

        Central Bank Reserves Evaporating. I tried to do a comparison of central bank reserves this year from last year. If my math is right, almost a $1Trillion dollars have gone poof in reserve dollars. I haven’t figured out where the reserves are going, just seems they vanished?

        • Wolf Richter says:

          “Reserves” are cash that banks put on deposit at the Fed and get paid interest on. It’s the Fed’s name. The banks on their balance sheets call this cash “interest-earning cash” or similar.

          Banks currently hold $17 trillion in deposits from their customers (customers deposited $17 trillion in cash at the bank). The banks have to do something with this cash. And they can do lots of stuff with this cash. They can buy Treasury securities, they can lend it out, they can invest in other stuff, and they can put part of it on deposit at the Fed where this cash is called “reserves” by the Fed.

          For banks, how much to put on deposit at the Fed (the reserves) is a decision that involves calculations of regulatory capital requirements, interest income (profit motivation), and their regulatory risk profile.

    • Augustus Frost says:

      I think the Swiss economy is more diverse than you write but I get your point. But “crooked banking products” is just BS for supposed money laundering which isn’t even a real crime, it’s a political one.

      But the reason you give is why I am no longer interested in owning the CHF anymore.

      IMO, they should have banned foreigners from buying CHF except for Swiss exports. No way I would have “printed” to enable speculators.

      Since they didn’t do that, instead of buying these overpriced stocks, they should have bought gold.

      • HowNow says:

        AF, are you saying “… instead of buying these overpriced stocks, they should have bought gold”, on a moral basis or a financial one? Financially, they’re way ahead.
        The Swiss Natl. Bank holds about 2700 securities. If a central bank can print up currency and buy equities (not just ones on U S exchanges!), and this is just one central bank, how reliable are the valuations of U S stocks?
        And, if someone who has a massive Twitter following can say he’s going to buy a s**tload of Achillies Therapeutics PLC or sell them, they can pump and dump at will.
        How “secure” are these “securities”?

      • AlexW says:

        Hey AF,
        I remember that back then the CHF was going ballistic, which would rather diminish export purchasers, as well as imbalance FX and banking operations. “Maintain Stable Prices,” seems to be some kind of mantra…

        In this case I would equate the position of the SNB to a situation where I am tending a hot bonfire (of ascending currency value) as a herd of cattle stampede towards it, just daring me to BBQ them all…

        I was wondering how that would work out, but I am sticking to my motto, “Crazy on the way up means Crazy on the way down,” and to accomodate the wisdom of The Wolf, I would say, “Crazy like a pachanko ball on the way up and crazy like a pachanko ball on the way down.”

        Wolf: thanks for putting a bookend on this aspect of these crazy times…

    • Richard says:

      You obviously dont know anything about the swiss economy, running the whole country on selling watches ?lol

      • dearieme says:

        Yeah, he forgot the cheese. And the yodelling. :)

        • Cas127 says:

          Everybody knows it ain’t nuttin’ but fondue and pharmaceuticals…

        • NBay says:

          I recall the Swiss Minister of Finance (think that was title) being asked how much gold they had and where was it.
          “I don’t know and wouldn’t tell you if I did”
          They sailed through two World Wars (and probably more European wars previously) totally untouched……they play their rotten little game VERY well.
          Had a relative who spent a lot of time there, said they hiss at you if you jaywalk….strange bunch, and home of Calvinism.

      • Not Sure says:

        Richard, I was trying to present a little humor.

        I work for a Swiss-owned company, so no, I don’t actually think they only make watches. My point was that it’s a small country with a relatively small economy. However, banking is a relatively large part of that economy. While Wolf seems to think they’re actually making something out of nothing, I have to disagree. Their printing scheme sounds fishy, and ultimately, I suspect this could eventually blow up in their faces. Just because it’s working for now doesn’t mean it will keep working. They will have to pay for that printing somehow at some point, probably through currency devaluation. And that’s not good for a country so reliant on its banking sector.

    • Alternator says:

      Fancy watches are not the only exports. Besides banking, there’s also ski lifts, trams, trains and of course fine chocolate. Lots of trade with the other two DACH countries – Germany and Austria. They all sell and buy from each other, and very often exclusively from each other.
      But the basis for the Swiss economy is high salaries to pay for high cost of goods. A burrito can be had for $35. An ear of corn for $5. With such high prices, 8 percent sales tax adds up quickly and turns into fancy tunnels, fully electric train grid and other luxuries. Pure genius.

      • Dan says:

        I have relatives who live in the tri country area where the borders of Switzerland France and Germany come together. We visit them once or twice a year. On the weekends the border crossings into Germany from Switzerland are packed with Swiss consumers buying cheaper products, from German stores.

        • Alternator says:

          For sure. But on weekdays, they still have to fork over 15 bucks for a plain croissant and OJ. :-)

      • roddy6667 says:

        The Swiss make a lot of money in the arms market. Because they are “neutral”, they can’t make them and sell them. They invent them and license the rights to German and other countries to manufacture and sell. They have all kinds of assault rifles, machines, anti-aircraft and anti-tank weaponry, artillery, and of course self-defense and sporting firearms. All “neutral”, of course.

        • Lisa_Hooker says:

          And they have a lock on naming a cheese!
          French cheese? British cheese? German cheese? Hungarian cheese?

    • Dangerous Dave says:

      Clearly, you’ve never been to Switzerland. They have a large engineering (Power Generators, Turbines, Trains etc) and manufacturing industry and a relatively small, highly educated population. For the record I am from the UK.

      • Not Sure says:

        Clearly, you’ve never heard a joke before. The quality of commenters is undeniably unusually high here on Wolfstreet, but good lord, some of you have a hard time identifying humor.

        Oversimplification is a common component of sarcasm. Anyway, the Swiss economy is quite advanced, but in the grand scheme of things it’s not very big, and banking is a huge component. Playing games with money printing is eventually going to end badly for them. Plain and simple. Maybe it hasn’t bitten them thus far, but it will.

        • Wolf Richter says:

          Hahahaha, I’ve missed humor here lots of times. That in itself is part of the humor :-]

        • Rosinli says:

          Funny to see you guys discussing about Switzerland. I’m a Swiss native (retired electrical Engineer who worked about 20 years for Rockwell Automation here in Switzerland). To the points of “Dangerous Dave”: I see him on the right track. Switzerland makes (beside Banking) a lot of money exporting products. So far I have not seen anybody here mentioning our Pharma companies (Novartis, Roche, …) which have dozens of Billions earnings every year. Engineering: Yes, ABB is a Swiss company. Besides that, we have a lot of companies producing technical goods(Packaging machines, Laser cutting, trains (Stadler Rail) and much more. And then: Food!!! (Chocolate, cheese..) Companies: Nestlé, Lindt&Sprüngli, Barry Callebaut….
          So, do you know now the biggest companies in Switzerland? No, you don’t…A fact that even a lot of Swiss do not know is the following: The biggest companies here in Switzerland are involved in trading commodities. (Glencore, Vitol, Trafigura…). To conclude:

        • 91B20 1stCav (AUS) says:

          Not-have often wondered if there was a metric for a society’s ability to laugh at itself how closely it would track the vitality of that society…

          may we all find a better day.

    • Daniel Meyer says:

      Wrong, we export much more goods, for example we a the fifth largest coffee exporter worldwide in terms of money, most people think of chocolate, cheese and watches, that isn’t that important as it seems. By the way we don’t grow any coffee in Switzerland…

  3. Ted says:

    SNB indeed had a great racket. Swiss bankers have been masters at exploiting the world for eons, in their special secretive, cabalistic way. I say that as a non-conspiracy theorist.

    I do wonder if they are actually in the red on their investments. In the article the all important data on purchase prices is not there. They have been buying for quite a while, and may still be ahead.

    • Wolf Richter says:

      We would have to know the average acquisition cost of each stock. Many of the big ones that they started buying in 2012 have lots of room to fall before the price would fall below their average acquisition cost.

    • Flea says:

      This seems to be the biggest problem,,why are Swiss,Japan, or any other country investing in stock market . These central banks are only about control . Figure it out

      • HowNow says:

        And Central Bankers do talk to each other. No insider trading penalties for them. So, if a CB’s mandate doesn’t include the buying and selling of securities, like the FED, maybe a phone call or two might do what’s needed.
        But I don’t buy into the conspiratorial crap. I can live with “innocent until proven guilty”, an unpopular idea nowadays.

  4. Wisdom Seeker says:

    This looks more like some sort of index rebalance, rather than an effort to unwind any positions. Eyeballing the table, most of the net purchases/sales are under 1% of the holdings. (Chevron at about -5% is a notable exception.)

    Historical Note: The Swiss QE-for-the-world came about after 2008-2011 when the Euro markets crashed and everyone wanted safe Swiss bonds. This pushed the Swiss Franc way up vs. Euro, creating a tremendous trade issue for the Swiss economy. (Remember, Switzerland is a small landlocked country, dependent on trade, with a lot of borders!) The SNB had to do something, and realized they could make huge profits by pumping out extra Swiss francs and buying stuff basically for free.

    [ Meanwhile, the rest of Europe mired itself so deep in debt-driven political issues that they invented NIRP. There’s a valuable lesson in debt-avoidance here… ]

    • Sammy says:

      Gee, ya mean leveraging to infinity and beyond is ultimately a TERRIBLE idea? Who knew?

    • Wolf Richter says:

      They actually lowered the share count of their big names in Q3, in addition to the dollar values going down, and the dollar values went down faster than the market indices, so you can see that they’re shedding overall.

      They lowered the share count for the top 50 stocks by nearly 2.9 million shares. Their overall share count is down too.

      Sure, there is some rebalancing because they also added some stocks, and despite that, the share counts are down and the dollars are down more than the indices.

      “The SNB had to do something” is the rationalization I’ve heard for 10 years, and they’re playing this game with currency speculators that allow them to pull this off.

      There are lots of small and tiny countries with their own currencies that don’t have to print $1 trillion and buy global assets with it to keep their currency competitive. The whole thing is a magnificent racket. And it’s been working wonderfully. The Cantons and other public entities own 55% of the SNB, and the SNB spreads this wealth to the Swiss public. That’s the motivation.

      I have no idea why the currency markets enabled the SNB to do this — why there is such hot demand for CHF to keep this thing going for so long.

      • electroneuter says:

        Since I originally hail from the country in the vicinity of Switzerland, I have a pretty good understanding of the power of the Swiss franc. Switzerland is a stalwart of political neutrality, fiscal discipline, and monetary stability for hundreds of years all across the Europe. They’ve earned our trust. For various reasons, whenever dealing with FX it was all in German Mark/Euro and one would never accept payment in French, British, Dutch or any other currency, but Swiss Franc – yes, please – everybody. We didn’t even know how any other money looks like except for the DM and SF. Only Albanians were always rocking the USD.

      • Cas127 says:

        “why there is such hot demand for CHF to keep this thing going for so long.”

        Well…it was their *prior* reputation for not doing precisely what they ended up doing…printing money (diluting the value of savings held in Swiss francs).

        Holders of foreign currencies believed their own governments to be much less trustworthy than the Swiss when it came to printing fiat in order to “fix” “imbalances” (usually fiscal).

        Swiss francs were desired because they were a stronger store of value (see also, DM).

        Historically, that was certainly the case.

        Then everybody decided to get “creative”/cute…betraying that reputation.

        • Sams says:

          The USA got creative, everyone else followed to keep the exchange rates stable.😉

      • Rosinli says:

        I see that you have a lot of intelligent postings. That’s why I will try to give you some backup…Remember: I am an electrical engineer, not a banker or currency expert. But there is also a lot of discussions going on here in Switzerland about the role of a National Bank. My points:
        After the financial crisis 2007/8 the FED started the “Quantitative Easing” to ensure enough Liquidity in the markets. We had a “Euro crisis” here in Europe which led to the same mechanism: (Draghi: Whatever it takes..) Draghi was at that time the “Greenspan” (Central bank manager in Europe). He also gave Billions of Euros in the market to ensure liquidity.
        There are three strong currencies in the World: US$, European€ and the Swiss Franc. With what I sad above, whenever there are currency problems somewhere, the Swiss Franc starts to go up. It is considered a “save haven” to bring money to a secure place. In an another posting above, I have explained that Switzerland has a very strong export industry. What happens now? If our currency becomes stronger, this will be a competitive disadvantage for our exporters (Which give us a high added value).
        So our National Bank (SNB) started to create (print) money (Swiss Francs) and started to buy other currencies (mainly Euros).
        Years ago, the SNB accepted no longer the Euro to be less than 1.10 Swiss Franc. Means they made the Swiss franc weaker by buying high amounts of Euros. The created money was spendt buying shares in foreign currencies. And the interest rates were significantly lowered in Switzerland. It worked out quite good. As you should not put all your eggs in one basket they also invested in American Shares (and others).
        In the mean time the situation has changed and there is no more need to strengthen other currencies against the Swiss Franc as US and Europe have a significant inflation. Inflation is much lower in Switzerland. With that, the SNB has started to lower their investment in foreign assets. I see here the point that the writers of the article above did not consider: SNB is not investing to earn money. They are not “income driven.” Their task ist to stabilize the prices in the Swiss market. And they will do whatever it takes to achieve this goal. This includes also a target to keep inflation low.

        Remember: The francs that were created did not create depts to anybody. As long as the Swiss franc is stable they can create as many Billions as they need.

        So the SNB is not like a commercial bank which is qualified by profit and loss. All their activities are just measures to act in the currency market as it is of benefit for the whole Swiss economy

  5. Rosarito Dave says:

    The tulips need to be watered! GREAT piece Wolf, NO IDEA this sort of thing was happening, but in retrospect, makes sense in today’s MMT world. Keep up the expos`es. Have a great weekend

    • Rosarito Dave says:

      I guess I STILL can’t figure out how to place the accent mark correctly… lol

  6. J Tanner says:

    Just a little more flavor to your great article

    The Federal Reserve Banks have extended $6.3 billion to the Swiss National Bank through the Dollar Liquidity Swap line. Oct 14 2022.

    • Wolf Richter says:

      7-day swap lines, several spread over a month. The last one matured on Oct 27 and is gone. There are no more swap lines outstanding. A $6 billion swap line for central bank with $1 trillion in foreign currency assets??? Minuscule. That whole thing was maybe a brief liquidity support for Credit Suisse when it came under attack.

      • eric says:

        Thank you.

      • Socrates says:

        Wolf, if they were in such great shape, why did they need the $6 billion to begin with??? With a trillion in foreign currency reserves, sounds like a guy who owns a 30 million dollar mansion who needs to borrow $20k from his family. Smells rank. And the idea that these institutions can backstop each other with money printed for nothing is why the old world is crumbling. There is no more trust or honesty in this game. Good luck talking about numbers, the people are shining up their arms and they know that the money fraud game is coming to an end in the West.

        • Wolf Richter says:

          If you need to help out a friend, such as Credit Suisse, for a few weeks, would get a super quick cheap loan without formalities on a line that is already set up, or would you disrupt your long-term investment plans with your stocks? It’s not hard to answer that one.

  7. Prof. Emeritus says:

    There’s a meme in the German-speaking world originating from around the age of the previous recessions (2008/2012 Eurozone) which explains the Swiss financial mentaility in just 7 seconds:
    Well-off 60s man sunbathing on a motorboat with strong Swiss accent being interviewed about the recession:
    “Everyone’s saying people are struggling in life and there’s a serious crisis going on. But personally I don’t say anything from it.”

    That trillion $ in QE will guarantee they can keep sunbathing, plenty of money to buy sunglasses, boats and sunscreen.
    Sorry for the link, it feels just too much on the point, especially with the European energy crisis going on. BTW, the Norwegians now have even more global assets, though they don’t label it as central bank money, it’s managed through their pension fund.

  8. Dawnrider 2054 says:

    There was an article in today’s WSJ about an unidentified Central Bank recently buying a lot of gold. Could that be the Swiss, from the proceeds of these stock sales? It would seem that the Swiss would want to keep their currency in some sort of equilibrium with the Euro. As the European Central Bank seems unlikely to do much QT, gold might seem the better alternative than QT on the part of the Swiss National Bank, (or holding onto overpriced stocks).

    • Wolf Richter says:

      If a central bank “bought a lot of gold,” what I want to know is which central bank “sold a lot of gold.” You cannot buy without someone selling it to you.

      • David Hall says:

        The Swiss bought gold from the Russians.

        • Wolf Richter says:

          So the Russians are dumping their gold? What do they know that we don’t?

        • cas127 says:

          Well, the Russians could be selling gold because things are in the crapper in Ukraine (requiring vast, expensive black mkt weapons component imports, more mercenaries, etc) and 75% of the world has embargoed their oil (and China and India have topped off storage).

        • David Hall says:

          Some of their accounts are frozen. They had to sell gold.

      • RickV says:

        Could the seller/s have been gold miners (who mined 3,000 tons in 2021) through the LME, CME or an Asian exchange?

  9. JoshWx says:

    Their holdings are almost an exact rip of FGCKX mutual fund. Rough year for those stocks…

  10. prairiewolf says:

    fool’s gold

  11. andy says:

    Guys, psst.. ‘feels’ like good time to start shorting Lilly (LLY). Even if bear rally continues. Keep it to yourselves. Not a financial advice, clearly. Do not average down. Sorry for commenting on a particular stock. Happy weekend.

    • andy says:

      / grabs a beer, or three /

      • cd says:

        Your not good at this Andy, try a cd

        • andy says:

          What have you contributed to the discussion. I have seen less than nothing from you. I on the other hand killing it this year (which may or may not last).

    • Aaron Fairchild says:

      I heard they were giving away free insulin today!

    • Gattopardo says:

      Please don’t pollute Wolf’s threads with off-topic stuff. Go for it on Reddit Stonks, bro.

      “Sorry for commenting on a particular stock”…. That’s lame. No, you’re not.

  12. Djreef says:

    The Swiss Bank won’t be the only bad stock bag holders. There’s a lot of bad paper to go around.

    • Yort says:

      Bad paper creates bad signs, like the $135 million 19 year deal for FTX Arena. The Heat is feeling the heat after losing that $135 million windfall yet sign makers rejoice…

      History repeats fast, remember Enron Stadium???

  13. Martok says:

    Wolf – Excellent article, makes me wonder what other countries will follow suit.

    I have read that US hedge funds and retail investors were dumping too, – this is so much like the dot com meltdown, – first it was slow, – then became rapid, and was panic to sell.

    This crypto nonsense is melting too as we have all discussed, and have heard that crypto could be margined up to 90% to buy equities, and I’m sure we will hear a lot more carnage from that after the latest meltdowns of it.

    And goofball “chatty” Cathie Woods said Bitcoin was going to 500k – and all this blockchain/blockhead is “rat poison” as the wise Warren Buffett said!

    I have been in computers all my life and the thought of 1’s and 0’s being worth something on someones hard drive in Timbuktu is hysterically funny to me!

  14. Divided by Zero says:

    Has anyone ever thought about what a worldwide, coordinated QT exercise would look like?

    • Sams says:

      Actually, the USA have started, others may not have much choise than to follow if they want to keep exchange rates stable.

  15. Pete says:

    Let me know Wolf, when the swissie starts unloading gold reserves. Best…PJS

    • Xavier Caveat says:

      Switzerland got rid of most of it circa 2001, for around $400 an ounce.

  16. phleep says:

    Isn’t this like the US dollar, as the French long ago complained of it — the USA’s “extraordinary privilege” of simply printing dollars to buy goods from abroad? Which is to say, having a trusted currency provides an opportunity for a form of fee for the issuer (seigniorage)?

    So, are these hedge funds and other speculators who bought Swiss francs taking a loss on this?

    • phleep says:

      I.e., who is the bagholder at the end of the line here?

    • Harvey Mushman says:

      Back in the 60s the US dollar was still backed by gold. France knew the US was spending way more $$$ than we could back with gold. So Nixon took us off the gold standard in the early 70s.

      • Spencer says:

        The reason why the US $ was taken off gold was being the world’s policeman.

        The denudation of our monetary golds stocks was due to the Pentagon’s “communist containment policy”. The Korean War, which began in June 1950, initiated the chronic balance of payments deficits that persist to this time, and which will probably continue as long as foreigners are willing to increase their net investments in this country.

        The U.S. has had a net liquidity deficit in every year since 1950 (with the exception of 1957), Up to 1976 (when the private sector contributed its first trade deficit) these deficits were entirely the consequence of excessive U.S. government unilateral transfers to foreigners (re: foreign policy – solely our far-flung military bases and personnel).

        During all this time the private sector was running a surplus in all accounts: merchandise, services and financial. The Vietnam Ten-year War administered the coup d’etat to our gold bullion standard. By 1968, in an effort to keep the dollar at the $35 par, we had exhausted nearly two thirds of our monetary gold stocks, or approximately 700 million ounces to about 260 million ounces.

        • 91B20 1stCav (AUS) says:

          Spence- well said, empires always seem to succumb to the costs of ‘policing’ same (…often referred to as ‘the wheel of history’. Cue Ike’s farewell speech to the tune of ‘Caissons’, substituting ‘MIC’ in the title…).

          may we all find a better day.

    • Phil Collins says:

      It was the French that closed the USA gold window back in the 70s. The French knew that the USA were printing money to finance the Vietnam war so they always exchanged the USA dollars they owned for gold. Nixon knew that they would soon run out of gold so he closed the gold window.

      • HowNow says:

        Gold: it’s only worth what it’s worth because there’s global agreement that it’s worth something. Sand dollars and beads didn’t make the cut. And historically, it’s been agreed upon to be worth something, so it has some antiquity value – which is strictly psychological. Regarding the U S dollar, in spite of the rants that it’s “fiat currency”, who gives a rat’s ass about being fiat if dollars can buy hamburgers & the hamburger store “agrees” on taking the dollars and giving you a sandwich?

        Would you rather own shares in a company that is producing something, selling it profitably, or providing a service that people will pay for and increasingly so, or something that you’re hoping will go up in value as fear grips the economy, or as “insurance” against… what? Dystopia? Or maybe it’s just a calming medicinal that soothes the worried mind.

        Rhodium is the most expensive metal and it and the other platinum group members have significant industrial value. So, why not hoard rhodium? Because it’s not agreed upon as conveniently fungible, its value isn’t particularly reliable, and it doesn’t work globally as a widely used medium of exchange. So, the mistaken belief that gold has some truly intrinsic value, is only as good as that story, that fiction, is believed to be by the buyers and sellers.

        If you want to read the political tea leaves, or guess which way the economic winds are blowing, then there may be merit to obsessing over gold. But it’s relative to whatever, like the U S dollar – relative to how it performs viz other currencies. When the dollar is taken out to the woodshed, you may either want to buy gold or find something else to store your wealth in.

        Face it: “investing” in gold is simply gambling. It also has the tendency to serve as a proverbial roach motel: get you into a relationship that you can’t get out of.

        • Lisa_Hooker says:

          Well, gold has been highly valued by every culture everywhere every year since before recorded history. There is that.

          Of course, all that may go away tomorrow.
          Or maybe not.

  17. gametv says:

    The stock value fell by 21%, but when I look at the sales of shares in the top 50 it looks like a very small sell-off, for example, they sold just over 1% of Apple.

    Looks like they either sold off more risky companies or it is mostly a loss of stock prices.

    From my general recollection I think that Japan is the central bank that is actually liquidating the most assets.

    Around the globe, the “liquidation” of central bank assets is proceeding at a snail’s pace. If they came close to selling off as quickly as they purchased it, we would be in for some real fun.

  18. Zero Sum Game says:

    I remember having a FXCM forex account back in 2015 when the SNB removed its Swiss Franc currency peg against the Euro. It was an immediate disaster which blew up FXCM along with several other fx brokers, such as Alpari since many client accounts went massively into negative margin equity within 5 seconds of SNB’s decision. Fortunately for me, I didn’t have much in the account & I wasn’t directly involved in the peg trade.
    There was even a young UK trader who was caught flat-footed with a long EUR/CHF position for his firm, revealing hundreds of millions in unauthorized losses (tide went out extremely forcefully, bleaching lots of skeletons, etc.)

    • phleep says:

      So, Switzerland is sort of a very fancy hedge fund?

      • Zero Sum Game says:

        The peg against the Euro back then was actually designed to prevent the Swiss Franc from gaining value against the Euro, so the situational dynamics back in 2015 were dramatically different compared to Wolf’s description of SNB taking advantage of its strong currency value today.
        I’m sure there’s a deeper economic history to be fleshed out here, but it seems the cost to the SNB of maintaining the peg and its subsequent removal led to giant changes in policies thereafter towards the money printing & foreign asset buying Wolf is describing for more recent times.

  19. CCCB says:

    Smart move given the sudden u-turn in the value of the almighty dollar…and its just getting started.

  20. SocalJimObjects says:

    The biggest Ponzi scheme there is. These guys get to print money, buy a bunch of stocks and when the whole thing imploded, it’s as if nothing has happened.

    • phleep says:

      This sort of madness was helping to bump up asset prices here — which is part of the dislocation happening for us now. But the boil must be lanced somehow, sometime. The pain and suffering must happen. The stupidity was too profound.

    • Einhal says:

      Is that nay different than the modern U.S.? We print dollars, the rest of the world gives us their resources (oil), services, and manufactured goods. It’s a great gig while it goes on.

      • HowNow says:

        Yes. Isn’t it wonderful?! Enjoy…

        • Harvey Mushman says:

          I do enjoy. I am very appreciative of the sacrifices that lots of young American men made. This position that we are in with having the world’s dominant reserve currency, wasn’t just handed over to us. It was paid for in blood.

  21. Phil Collins says:

    I noticed when the peg broke back in 2015 between the Swiss and the Euro that the SNB was printing and buying stocks. It is a joke, they were printing pieces of paper with ink on it and buying real hard assests, its like buying some A4 paper and exchanging it for a house or car. People are not investing these days, they are gambling, the markets died in the 90s

    • ru82 says:

      I had not looked at their assets for a couple of years, but I had read when they were first buying prior to 2020, they were buying a lot of dividend paying stocks. They probably collected hundreds of millions on dividends. At the time I thought it was pretty smart. Buy US paying dividend stocks with printed money. “That way they are siphoning profits from U.S. companies plus getting U.S. dollars via dividends.

    • The Real Tony says:

      Agreed the U.S. stock market has been nothing but a three ring circus sideshow since around 1993 or 1994 with the same or worse fundamentals as Bitcoin.

  22. Thomas Hafen says:

    I think some of the SNB’s actions have to be looked at in a historic context.
    The SNB’s original job was to stabilize the CHF exchange rate.
    Over the decades it became almost guaranteed that if there was any trouble in the world, people would park their money in CHF, which created havoc for the Swiss export industry.
    So in those times they would water down the CHF (QE) and buy boatloads of foreign currencies, just to prevent the CHF to appreciate exorbitantly and give it stability. They buy lots of €, USD, but also many other major currencies, namely those that are the main export markets of Switzerland.

    Then when the crisis was over the SNB would buy back those francs at a bargain and distribute the gains to the cantons (States in Switzerland).

    They then got smart, and started buying assets other than plain cash or bonds, and for the last 2 decades did well.
    Not so this year, although they still achieved their core objective of preventing the CHF to fly too high.

    As far as my advice where to put your money at this point, it’s tricky.
    I still vividly remember April 2000! I don’t think we’ve reached bottom in the stock markets, never try to catch a falling knife.
    Those valuations of tech are still exorbitant.
    I also remember 2005-08, there is still lots of fluff in real estate, the corrections just started. Until inflation is solidly in check in the 2% neighborhood, the fed, ecb, boe will tighten, and mortgage rates are not coming down anytime soon, which is the prerequisite for home prices to go up again.

    And surely don’t jump on the inflated fossil fuel stocks, the bonanza will continue for a little, but will also come crashing down soon.

    • HowNow says:

      Sound advice. Thanks, Thomas, for your perspective (I happen to agree).

    • The Real Tony says:

      Shorting the U.S. dollar looks like the safest trade to me but either January or February 2023 might be the absolute top in the U.S. dollar when inflation tops out. Long commodities would be the next best trade. I don’t see recession anywhere on the horizon.

  23. Old school says:

    I guess these guys are smart, but it smells a little bit like the Mississippi stock bubble where the financial system and economy was built on future earnings that totally disappointed.

    Maybe Fed policy forced them into it. Checked out yearly value of gold dug out of the ground and it’s around $150 billion at current price so they probably were not able to buy sufficient quantities of gold without running price up.

  24. Xaver says:

    You are right. The Swiss National Bank couldn’t do any mistakes. It got everything they bought for free. A currency too strong is a nice thing to have. Some people don’t understand that. Yes, tourism and export was hurt. They had a duty to help by buying with printed money.

    If they are selling now, they are going from stocks to foreign currencies. Maybe they are looking at Credit Suisse and see some problems there.

    • phleep says:

      I can only applaud them for picking up money they saw just out there the sidewalk. If suckers are throwing away money, am I too righteously moral to position myself to catch a little bit of it? Someone else will catch it, if I don’t.

      • HowNow says:

        I wonder (out loud), if the SNB can print currency and buy assets, what’s to stop Bitcoin, Etherium tokens from buying assets? If someone sells them their shares of stock, for example…?
        And if crypto currencies are anything like what happened to land and property assessments, prior to the S & L meltdown in the late 1980s, the assessments were daisy-chained, each assessment was higher than the one before, and the S & Ls lent money on the rising valuations, etc.
        Have stocks been hoisted up on the inflation of cryptocurrencies?

        • ru82 says:

          That is what was sort of happening. Learning from the FTX debacle, it appears they were market makers creating an overvalued market for the FTX token. Using it as leverage to buy other assets. Unfortunately, many of those other assets were other cryptos causing their values to go up too.

          They should have bought some hard assets.

      • Gattopardo says:

        “Someone else will catch it, if I don’t.”

        phleep, that’s exactly why the money actually wasn’t sitting out there on the sidewalk. Someone would have already picked it up. :-)
        (old economist’s joke)

  25. Rohry says:

    So this is why the Swiss are seeing such a low inflation rate. Did the Japanese central bank do the same thing (print money and buy stocks)?

    • Wolf Richter says:

      Inflation in Switzerland is now 3%. But that’s a lot lower than the 10%-range of some of the neighboring countries.

      In terms of the energy price shock, particularly the spike in natural gas prices, it affects the country much less. Hydro is just over 60% of its total power generation, and nuclear is close to 30%. Sure gasoline prices follow the same trend as everywhere, but the country is small, has great mass transit, and you don’t have to drive a gazillion miles every day.

      Also, it has been horrendously expensive for a long time, and it may be that there just wasn’t a lot of room for inflation to make it even more expensive.

    • The Real Tony says:

      They hold the currency of last resort. The Swiss Franc will be the last currency standing. I don’t see that changing in the near or distant future.

  26. GringoGreg says:

    great article Wolf! A wealth of knowledge and entertainment in a 2 minute read!

  27. TimTN says:

    Is this a case of the Swiss getting a free lunch? The Currency is strong they print money to weaken, load up on foreign assets that appreciated (even if they sold off just a bit lately), sell foreign assets for a gain. Now they can dump this gain into treasuries and the interest alone will pay for the government and social services. If the Swiss currency starts to weaken, sell the treasuries. It seems like a very thought-out plan.

    An uncontrolled upward surge in the currency would have hit exports and tourism which they are heavily reliant on. They cashed in at the right time.

    Key thing being here the currency being so strong is the only thing that made this possible.

    • phleep says:

      It is all, ultimately, trust and belief. And in the right moment, that can evaporate. I am looking at USB and starting the think, one the edge of my radar, what could bring that about. But the Swiss have done some fancy broken-field running before.

    • Thomy be good says:

      The thing nobody mentioned is that the SNB, by weakening the CHF to please the exporters, basically robs the Swiss people. If the SNB would have done nothing, the Swiss people would have get richer, could have afforded many more things in the EU for example (houses, vacation and so on). The Swiss exporters always managed to sell at higher prices, thanks to innovation. And instead of that, the SNB is allowed to take that money and manage it with no oversight. The Swiss should do a sovereign fund like the Norwegians so at least there would be some accountability.

      • Sams says:

        Rob the Swiss people?
        That are employed by the exporters?
        There is a limit to how much more expensive one country can be relative the neighbours.

        If it comes to robbing someone, the Swiss may have sided with those that are robbing the US people.😉

    • Rosinli says:

      As I wrote above:
      Remember: The francs that were created did not create depts to anybody. As long as the Swiss franc is stable they can create as many Billions as they need.

      So the SNB is not like a commercial bank which is qualified by profit and loss. All their activities are just measures to act in the currency market as it is of benefit for the whole Swiss economy

      In addition:
      The accounting of the SNB is not part of the budget of the swiss government. The SNB is acting completely independent!

      Swiss government (Bundesrat) can not give them orders (Send us 6 Billions to buy F-35 planes from the US).

      I say it again: The money in the books of the SNB is just a tool to act in the financial markets to keep the value of the Swiss franc stable against other important curriencies.

      Voluntarily, SNB can give a contibution to the governemt of Switzerland (Bund) and the States (Kantone) when it has a good financial year. This was the case in earlier years. It lies in the range of several ten millions.

  28. DV says:

    Switzerland used to be a safe box for Europe and the world. No more. It is no longer neutral, its banking secret is no longer a secret. It has seen capital outflows for some time and those outflows are bound to accelerate in the years to come, potentially triggering the collapse of its oversized banking and financial sector. From what I hear, Credit Swiss alone has 4.5 trillion in assets, so it is going to be almost impossible to save it.

    In fact, the US have targeted Swiss as a next potential victim that needs to be robbed to prop up the US financial sector and to weaken European one for some time. The Swiss still have some financial buffer they can rely on, including their US holdings. But these are dwarfed by the size of its liabilities.

    • Rosinli says:

      I am new to this environment and I was surprised about the quality of the postings here. Now I have found an exception!
      Switzerland no longer neutral…
      BS. We did not change our policies for foreign affairs.
      Banking secret: We are now part of the Automatic data exchange program to avoid international tax evation (Yes, especially the US gave strong pressure here).
      Switzerland itself has still a very strong secret for bank customers.
      Capital outflows: Pure speculation.
      Oversized banking and financial sector: As other countries our banks face challenges here. We will see what happens with the assets of CS.
      Be aware, that the Swiss pension funds have actually a value of 1.3 Trillion. Yes, this gives some small financial buffer
      And there is much more…..

  29. Michael Engel says:

    1) SNB took profit, because the markets misbehaved. Their realized gains are high. They might be buying TY.
    2) When interest rates were minus (-)1%, SNB bought “safe” US companies paying dividends. They stayed in the game, creating shortages, accumulating dividends and unrealized gains, until the Nasdaq misbehaved, after Catia-Nargila in Nov 22 2021.
    3) XLV, the health care ETF, is doing nothing since Aug 2021. The risk of a downturn is growing.
    4) This bear market rally. Central banks traders took profit to support CS.
    5) Credit Swiss lost his secret recipe. CS never recovered after 2007. It’s
    all downhill for 15 years. CS is worse than creepto.

  30. Michael Engel says:

    6) Same, DB. Deutche Bank Indian traders sent it to it’s grave. SNB avoid repeating 2007/2009 mistakes.
    They bought Real Stuff and less derivatives, selling before the plunge.

  31. SoCalBeachDude says:

    Daily Mail: Elon Musk says FTX founder Sam Bankman-Fried set his ‘bulls**t meter’ off when he tried to join $44b Twitter purchase and shares crude meme about failed mogul – as its claimed crypto king ‘secretly transferred $12b to girlfriends account’

    Musk mocked disgraced FTX founder Sam Bankman-Fried overnight Friday

    Said he was immediately dubious of SBF’s offer to finance his Twitter takeover

    ‘My bulls**t meter was redlining,’ Musk recalled of his conversation with SBF

    Musk’s text messages revealed in court back up his account of events

    On Friday, SBF resigned in disgrace as crypto giant FTX filed for bankruptcy

    About $2B of customer funds have reportedly vanished from crypto exchange

    FTX said on Saturday it had seen ‘unauthorized transactions’ removing funds

  32. Daniel says:

    Snb never loses…when you create assets out of thin air,and use it to buy real assets,how can you lose?..I don’t care if what they bought went from a million to one penny…it’s all pure profit..either way they are up,as they are getting something for absolutely nothing…

    • HowNow says:

      One could argue that about TikTok influencers: they have something in common with currencies – created out of thin air. Beauty is in the eyes of the beholder.

  33. dearieme says:

    Rough arithmetic: Swiss population is a bit below 10 million.

    So $(10^12)/(10^7) = 10^5 => $100,000 per capita. Not bad.

    Against which you set what? All the Swiss Francs in issue?

    Why did they want cash, do you think? To prop up Credit Suisse if needs be?

    • HowNow says:

      Not much to your theory. The Swiss Natl. Bank has been doing this for years, especially accelerated due to the flight to Swiss Francs.

      • HowNow says:

        Has been creating more francs, that is, not necessarily the selling of stocks.

    • bitBytes says:

      Your math seems to be off. I divided 1 trillion by 39 million households and got a bit over 25 thousand per household.

      • Swissbrit says:

        bitBytes – where did you get 39 million from?
        The Swiss population is roughly 10 million people (not households)

  34. cb says:

    Wolf said: “What the SNB did was one of the most fabulous central-bank rackets ever, empowered by global speculators and investors that kept buying these Swiss francs that the SNB was creating and selling,”

    Isn’t the much bigger and more systemic racket when the SNB creates Swiss francs and SWAPS them for FED created dollars?

    • Wolf Richter says:

      Nonsense. Those were 7-day swaps, for a period of 4 weeks, minuscule amounts by central bank standards, and they all matured and are gone. This was a four-week quickie, likely to help out Credit Suisse when it came under attack.

  35. FDR says:

    Could it be that the SNB wants more Eurodollars or US Treasuries?

  36. ray says:

    That’s all very interesting, but I’ve got to go and get dressed now. The pivot party is starting soon, and I don’t want to be late!

  37. Stan65 says:

    Does all this mean skiing will be cheaper in Swiss this winter? Haven’t been for a couple years now.

    • SwissBrit says:

      Only if the CHF drops against whatever currency you’re funding your holiday with.
      Still gonna be expensive though.

  38. OtisPlanet says:

    A trillion $dollurds in free stuff to “defend” the CHF. Switzerland gdp is $705 billion.

    What a grift!

  39. dang says:

    Wow !. An extraordinary article.

    The quantification of the activities of the Swiss National Bank, released a number of latent premises about the aggressive nature of world history. I must admit, the idea that the SNB wrote a check, for $1 T , with insufficient funds, and sterilizing it by purchasing American assets.

    Reminds me that Central Banking is a blood sport. Very much competitive.

    • dang says:

      I recall the SWB positioning themselves in front of Draghi’s European QE. The Swiss sold XX year bonds for -0.4 pct interest rate.

      From the perspective of the SWB, a shrewd investment. From the perspective of purchasers, not so much.

      The SWB is not a hero. More of a plain villain, putting bread on the table.

    • dang says:

      An artifact of the extremism caused by the radical implementation of QE across the western business community.

      Their pHD’s convinced our pHD’s that the marginal increase in business activity is worth agreeing to this tiny country’ s demand. Then they went for the throat, as I would hope my Central Bank from a vulnerable society that represents an alternative to the California society.

      A cultured society, with ancient roots, a purported Republic that never had a king or queen. Only an Aristocracy perpetuated since at least the 14th century when written language became common.

      • dang says:

        The Swiss are not the only foreign investors who have increased their wealth by issuing currency and buying assets with their new paper.

        Meanwhile, the Fat Daddy of the currency regulation regime, the Fed, was sucking with a game plan to combat the currency war that was underway.

        They capitulated and released a torrent of currency, perhaps to neutralize the disruption that economic transitions always create.

        • dang says:

          At this moment, one scenario which I hope is the correct one is that America is about to make a step change in the way we interface.

          The world has turned a sufficient number of times that I realize I am a superfluous. Not looking forward to my clean living, war hero, Bronze, Silver, and the Purple Heart Dad, experienced for the last years of his life, chattering at the panel on the TV, thinking all the while that the panel was composed of his seven children.

          Glad I’m not clean living.

        • dang says:

          I think that there is a currency war raging since at least 2006 during which the Fed made the political decision to rescue the insolvent banking system.

          The only relevance that history has as how it pertains to the present predicament that the people find themselves in. Which is the simultaneous implosion of the four bubbles, hanging over our heads, like the sword of Damocles. The bonds,stocks, housing, and the military.

  40. Michael Engel says:

    1) We expect a recession in 2023. If so, the markets have to show it.
    2) SPY : the move to Aug high was about 62% retracemnt of Mar high
    to June low.
    3) QQQ : the move to Aug high was about 62% retracement of Mar high
    to June low.
    4) SPY : the move to last week high was about 62% retracement of Aug
    high to Oct low.
    5) QQQ : the move to last week high was about 38% retracement of Aug
    high to Oct & Nov lows.
    6) We don’t know what will happen next. So far QQQ is a thud.
    7) If QQQ will get better DIA & SPY will get much better. If so, DIA wouldn’t care about Fed hikes. DIA welcome it.
    8) For fun and entertainment only.

  41. The Real Tony says:

    I’ve always wondered why any foreign country would buy U.S. stocks? The U.S. stock market is the most expensive and most overvalued stock exchange in the entire world. Every ponzi in history at some point in time has imploded. The U.S. stock market and the Chinese real estate bubble are the two most overvalued ponzi’s today with the U.S. stock market being the longest running ponzi.

  42. Harry Houndstooth says:

    Another blockbuster from Wolf Richter.
    Pure wisdom dispensed daily.

    Especially the comment about missing the pivot party.

  43. R2D2 says:

    It is fascinating to watch the reactions of domestic press to various countries’ economic shenanigans.

    The UK cuts taxes, that add a tiny 1-2% to total state debt, and the UK media go ballistic. An absurd over-reaction.

    Switzerland prints more cash from thin air than its entire economy, to gamble in risky US / other tech stocks, with over 100% of their citizens’ entire GDP, and the Swiss press barely say a murmur. A strange under-reaction.

    If your domestic press is low on hysteria, you can get away with a heck of a lot. A heck of a lot.

  44. HR01 says:


    Many, many thanks for keeping score with the SNB. No one but Wolf Street provides this service…to regular folk anyway…whereas institutions likely get this stuff six ways from Sunday…and share with the most profitable clients.

    SNB can do whatever it wishes when the CB of CB’s (BIS) is ensconced inside the borders. Suffice to say that the SNB likely has access to the ultimate inside info. Would not doubt if their entire portfolio is hedged perfectly.

    As for the pivot party comment, not to worry. Inflation is out of the bottle and typically takes at least a decade to bring under control. Only remaining question being whether the Fed moves the goal posts to redefine the meaning of ‘under control’. Perhaps the new target becomes a range…say 3.5% to 4.5%. Still will take years to get back to even that upwardly revised target range.

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