The Soaring Swiss Franc Is Leaving Expat Hedge Fund Staff With No Cash

The Soaring Swiss Franc Is Leaving Expat Hedge Fund Staff With No Cash:

British hedge funds that relocated to Switzerland in an attempt to avoid rising UK taxes are now being hit by the soaring Swiss Franc, reports The Telegraph.

The majority of the hedge funds involved -- such as Brevan Howard and Amplitude Capital -- pay their staff in US dollars. Now, with the seemingly gravity defying rise of the Swiss Franc, their spending power is being greatly reduced.

The hedge funds had moved in an attempt to avoid rising taxes in the UK, such as the 50% income tax, reports The Telegraph.

For many living in Switzerland, it's now become cheaper to drive to Germany than to shop in Switzerland itself, reports Der Spiegel.

The drive from Zurich to German border town Lorrach takes around 1 hour and 13 minutes, and afterwards shoppers can claim the sales tax back.

In fact, many Swiss seem pretty happy with their cheap shopping, but for hedge funders earning a foreign currency, Switzerland doesn't seem so attractive a place to live anymore.

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THE BREAKDOWN: Our economy, one step at a time

THE BREAKDOWN: Our economy, one step at a time: In the wake of a turbulent month for markets and economies around the world, Kai Ryssdal hosts a special one-hour Marketplace audio broadcast examining where the U.S. economy is headed and how we got here.

LISTEN TO THE LATEST PODCAST

Re: Bank of England split on interest rate policy as consumers struggle

This is the feelings of one such reader from the Telegraph [UK] and his feelings about how he is going survive in today`s turbulent world of financial wheeling and dealing, people need stability in their lives and not these financial whizz kids using the stock market like some kind of children`s toy. He finishes with the words " Wish I Was A Debtor " - how SAD.

Thanks Maxwellgood for your comments.

Re: Bank of England split on interest rate policy as consumers struggle: My savings are intended firstly to help in eventual retirement and secondly, to allow me to spend some of it now.

The former is being made very uncertain by this pronounced and prolonged savers/debtors imbalance - in effect, negative rates eroding the pensions pot. If I had the sort of money mpc members have, then it wouldn't be a problem.

The latter is not possible because of inflation. There's no slack to spend. I have to try to preserve what I have by keeping it in fixed term accounts to get the best rate in order not to fall too far behind inflation.

Rates ought to keep pace with inflation. If house prices fell (it's not certain they would by much), then they will recover after the short term. After 4 years of bountifully low rates few mortgagees should be in potential difficulty - savers shouldn't be expected to cover current debtors risks.

Wish I was a debtor.

Traders Speculating (Praying) That Bernanke Will Announce New Stimulus Scheme This Week In Jackson Hole

Traders Speculating (Praying) That Bernanke Will Announce New Stimulus Scheme This Week In Jackson Hole:

It has been a year since Ben Bernanke threw his last big bone to Wall Street: The announcement at last year's Jackson Hole schmooze-fest that the Fed had a number of options at its disposal to stimulate the economy.

(Translation: We're launching QE2).

Bernanke's speaking at this year's Jackson Hole this Friday. Wall Street is speculating--or at least praying--that the Fed Chairman will say something similar this year.

This seems a reasonable bet. Bernanke tends to freak out whenever markets tank, and the last month of ~15% declines has wiped $8 trillion off the value of global stock markets.

On the other hand, QE2 was a bust, and Bernanke has already recently promised that the Fed will keep short-term interest rates at zero until 2013. And inflation has been ticking up. So maybe the Fed chairman will hold firm.

More at MarketWatch >

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• Today And Tomorrow, Some Important Pre-Jackson Hole Data Is Coming Up...
• The Odds Of Imminent QE3 Are Rapidly Plunging
• ROUBINI: Capitalism Has Hit A Crisis Point, Global Unrest Will Spread...

10 Things You Need To Know Before The Opening Bell (KKR, SPY, GLD, DTG, CAR, HTZ)

10 Things You Need To Know Before The Opening Bell (KKR, SPY, GLD, DTG, CAR, HTZ):

Good morning. Here's what you need to know.

• Asian indices were mostly down in overnight trading with Nikkei falling 1.04%. Europe is trading higher and U.S. futures are up.

• Libyan rebels reportedly met with little resistance from government forces in Tripoli, and were cheered on by crowds that expect that Qaddafi's 42-year rule is coming to an end. Rebels have also captured two of his sons. Don't Miss: Incredible moments from Qadaffi's reign >

• Meanwhile, markets are reportedly factoring in the conflict in Libya, as oil prices have dipped on expectations that Libyan oil would be available to the market soon. Brent crude futures fell about 1.7% to $106.8 a barrel in early European trading and U.S. crude is at $83.37.

• German chancellor Angela Merkel yesterday, pushed Europe to stand firm in the face of market pressure and said that politics could not follow markets, as she reiterated her reluctance for a Eurobond that would fund indebted nations. Senior European Union official Herman Van Rompuy is also backing German and French opposition to Eurobonds. Don't Miss: Everything you wanted to know about Eurobonds but were afraid to ask >

• In commodities news, gold prices continue to climb over concerns of a global economic slowdown and Eurozone sovereign debt crisis. Gold crossed the $1,890 an ounce mark hitting a new record.

• Boston-based private equity firm Bain Capital is set to acquire Australian accounting software company MYOB for about $1.3 billion, beating out bids from UK's Sage Group and Kohlberg Kravis Roberts & Co.

• The Japanese yen declined against the dollar and the Swiss franc also fell amid speculation that both countries will intervene to curb gains in their currencies. The strong yen and Swiss franc have hurt exporters in both nations. Check out the only currencies that have outperformed gold this year >

• Dollar Thrifty Automotive Group Inc. has said it wants 'best and final' offers from its bidders by early October. Hertz Global Holdings Inc. and Avis Budget Group Inc. are both looking to acquire the company. In May, Hertz offered about $2.1 billion for Dollar Thrifty at a time when Avis faced problems getting regulatory approval for its rival bid.

• In earnings news, Australia's largest steel maker BlueScope Steel Ltd. posted a $1.09 billion annual loss. It has announced that it is shutting two production facilities and will cut 1,000 jobs as it moves to reign in costs and cut its losses. Meanwhile government-owned China Construction Bank Ltd. reported a 31% rise in first half profit to $14.5 billion.

• It is being reported that traders expect Federal Reserve chairman Ben Bernanke to begin a third round of quantitative easing to boost the economy, and that is being reflected in record-low yields on U.S. Treasuries. Barclay's expects that traders anticipate $500 billion to $600 billion of Treasury purchases by the Fed.

• BONUS - Lindsay Lohan is suing rapper Pitbull for allegedly defaming her in the song Give Me Everything.

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• 10 Things You Need To Know This Morning
• 10 Things You Need To Know This Morning
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Obama's Wall Street Donors Move To Romney

Obama's Wall Street Donors Move To Romney:

At least 67 Wall Street executives who backed President Barack Obama in the 2008 campaign are abandoning his campaign for former Massachusetts Gov. Mitt Romney's, The Hill reports.

Romney, who founded Bain Capital, is viewed by many as better for the financial sector than Obama — who signed the controversial Dodd-Frank regulatory bill.

Among the donors who have changed sides are Joshua Harris of Apollo Management, Oscar Schafer of OSS Capital Management, David Solomon of Goldman Sachs, Barry Sternlight of the Starwood Capital Group, and David Blitzer of the Blackstone Group.

Obama's criticism of wealthy Americans, as well as his push for the expiration of the Bush tax cuts on the wealth, is cited as a key factor in the reversal.

Only three of the 67 donors have given money to Obama this year, according to The Hill — compared to 36 who hedged their bets and gave to Republicans in 2008.

But Obama is not lacking for Wall Street dollars, holding several multi-million dollar fundraisers in the New York City area in the past few months. His reelection campaign's fundraising far exceeded that of his opponents – and donations from the financial services sector has maintained the same relative strength to other industries.

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• Bank Of America Executive To Rick Perry: "We'll Help You Out"
• George Pataki "Strongly Considering" Presidential Run

22Aug/Mark Carney: Opening statement for appearance before the House of Commons Standing Committee on Finance

22Aug/Mark Carney: Opening statement for appearance before the House of Commons Standing Committee on Finance: Opening statement by Mr Mark Carney, Governor of the Bank of Canada, presented to the House of Commons Standing Committee on Finance, Ottawa, Ontario, 19 August 2011.

Thought this would be of interest to those people that are following these talks.