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Gen Watch Prices will jump soon...


dbane883

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Swiss franc appreciated about 25% today (against the USD and Euro).  At some point will be reflected in cost of Swiss made exports.

 

All the swiss watch companies are getting crushed today.

 

http://www.bloomberg.com/news/2015-01-15/swiss-exporters-face-tsunami-after-snb-unexpectedly-drops-cap.html

 

http://www.google.com/finance?q=VTX%3AUHR&sq=swatch&sp=1&ei=uu23VLmEMMWWqAGFooHoDg

 

Maybe I should run out and buy my SD4000 this aft!

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The Swiss Central bank just dropped a bomb on the Swiss industries that depend on exports for the bulk of their revenue. I bet their are a  lot of angry watch execs right now. Maybe they should move their production to China? I bet the rep factories would be glad to help them out!!

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yeah.. its big news.. the SNB was defending 1.2000 Eur/Chf for years..   

 

(was a currency trader for 20 years).    I miss days like this.  lots of fun

Fortunes made and lost on days like this, depending on which side of the trade you are on!!

 

What I don't understand, and I'm certainly no financial expert, why did they suddenly announce this, rather than easing it in steps? possibly it would have allowed Swiss firms some opportunity to adjust.As it is, they got blindsided by their own government. 

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If a central bank is defending a level using "unlimited" resources (selling CHF, buying Euro), what do you think will happen if they announced that they will gradually start to not defend it?  Everyone would sell Eur/Chf knowing that they will be guaranteed to make money...

 

This basically opens the doors for the ECB to begin quantitative easing next week...

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well swiss rates are now negative!  -0.75%.   So interesting if the franc will continue to be a safe-haven currency with that hinderance.  with ECB quantitative easing a certainty now, the US $, GBP will be the short term beneficiary (bonds, gold, real estate, etc.).    This is actually bad for the US as it will drive up the $... not good long term

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"I bet there are a lot of angry watch execs right now."

 

Imho it could not happen to a nicer bunch of SOBs. They have been jacking prices for years because of greed...it's about time they got a taste of their own medicine. When a product that no one needs jumps greatly in price, demand falls like a rock.

 

Besides new watch prices rising, a swiss Eta 2836 will probably soon be $300 and a 7750 around $700.

Now would be a good time for the China Clonemasters to clean up their act and blow the dirt out of their clones and maybe squirt a little oil in them. But they won't do it.

 

 

After the dust settles, it will cost more to feed Frankenstein if he yearns for swi$$ parts.    :crazy:

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dbane "it will drive up the $... not good long term" I disagree and believe a strong dollar is in our best interest.

In reality, no country wants a strong currency. There are trillions and trillions of dollars that are outside the U.S. What this means is that the Fed reserve can effective print money and never have to pay it back. That's effectively what a bank note is, an iou.

US exports will be hurt long term and makes competing with the likes of China much more difficult. Why do you think Japan has been in a deflationary spiral for 20-30 years? The yen has appreciated from 360 (yen to $) to below 100 (currently around 117).

Swiss rates are negative, EU will effectively print money next week as they start quantitative easing. By product will be an influx of money flowing into US$ making exports more difficult in an environment when the rest of the world economies are hurting. A strong dollar is fine when emerging markets are strong, but that's not the case. Gold is a natural asset to hold, and US rates will probably stay low which might offset some of the strong $'s deflationary effects, but can't go much lower than they are now. Something gotta give.

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