One was anticipating. You know the Central Banks are good about telling the markets what theyre going to do in advance and when that doesnt happen you see swings like this. The Swiss National bank coming out with its news saying it was going to delock the swiss franc from the euro. Since 2011 they had been tying the currency cap in 2011. Swiss national bairng was saying you had to have 1. 2 swiss francs to the euro. They let that go unexpectedly. Moved 30 . Basically 120 euro. 120 swiss francs to the euro. Yeah down. 86. Right. Its complicated stuff and theres a lot to get your head around but this is a massive move. Weve never seen a currency swing like this before. It was also the u. S. Dollar we saw the swing against because the dollar was high against the swiss frank because it was tied to the euro. When they let that go it was a massive snap. So it had been that they were benefitting by being tied to a weak euro but it wanted to go much higher and obviously i want it wanted to go much higher. We need an expert. People in the past look who made it here. I need him to explain to me why these markets would get risk on i appreciate how big a trading part how relevant is this little im glad i bought the Swiss Army Knives last year. Oil go down 60 and then a major currency moves 30 one day all bets are off. How do you stake your claim on anything at that point . Thats part of it too. These markets are insane. Unpredictable. Im going to blame this whole euro experiment which is so stupid to try to have all the multispeed economies with a fixed currency this is what happens. Who are you blaming . The whole european experiment to try to all of these it should be 50 less. The swiss franc should be 50 more. This all just happened in the last hour. We have been scrambling to get our arms around this and were lucky enough to have people willing to scramble with us. Were joined by mark commander. Forest is here on set and well done. Lucky were in new york now. I love the fact that youre in new york. Ten minutes door to door im here. It was awesome. Everybody is like who cares. Can we just not talk about this . Its amazing. We did. We have been talking about it over and over again how they have been steadfast and holding this. Thats the take away. We all thought that maybe this time it was different. Maybe the central bank could hold the Exchange Rate because its always failed. You never had a central bank be able to intervene in perpetuity and you saw them giving up finally after three years of intervention and this is the single biggest surprise. Everybody thought it was the market that was going to drive the euro swiss down. The fact that snb just walked away thats where you see this massive dislocation. We had essentially euro swiss going to parody. The inflow of money because they knew the swiss franc was undervalued. They realized it was impossible to hold the peg after qe. This is getting ahead of it. They basically said you know what theres no way theyll be able to hold the peg. What about the just explain to the viewers, i already understand completely but what about the action that the ecb does next week would make it impossible to hold that peg. Ecb continues to deval its currency. To Southwest Airlines the euro would go further. It kept putting further and further pressure because the point is that ecb was going to lower lower rates in europe. It makes it much less interesting. Money would have been flowing out of the swiss franc. Not to mention the fact that the russians continue im going to admit this is still over my head. Explain to me why im supposed to care about the swiss franc. Its the company money. Your capachino is going to cost you 10. To the extent you think theres broader implications. Mark is probably better to speak to this than i am. I have no idea what the longer term implications are. Its not going to be a global impact. In my ways the fact that the euro came down is positive because it helps exports in the long run. But Financial Sector we have no idea where the euro trades are. Theres a lot of people that lost a lot of money today. A thousand point move. Hedge funds and everything else. So chandler why does this mean that the risktrade is why was holding the cap on why did that mean people would put risktrades on and now theyll take it off. I dont think thats what it means. I think what the market is seeing now it doesnt have to do with the euro zone. It was a swiss Bank Strategy to fight inflation. Before 2011 when they put the cap on the currency they tried buying foreign bonds to avoid their version of qe instead of buying domestic bonds because there wasnt enough of them. They had to buy foreign bonds. Thats failed to fight deflation. So they pegged the currency or capped the currency and now theyre giving up on it. The force at work is not about the euro zone. Do i agree that anticipation of foreign bond buying in the euro zone in the next two meetings helped impel the previous strategy. The key here is that oil prices Commodity Prices collapsed. Well see this. Headline cpi is going to end up going negative. Already tomorrow its a 1 headline to maybe. 5 . Let me try and connect some dots here. What were watching is a central bank not able to hold the line on deflation. This is a small central bank and Swiss National bank but this is this foretelling the future when it comes to the United States central bank and europes central bank . Are they going to be able to hold the line when it comes to this massive deflation when youre looking at oil prices down 60 and the other turmoil that comes with that. This is the most pornimportant thing to keep in mind. The Federal Reserve doesnt target headline inflation. Core inflation is going to remain sticky and in that basket of goods that make up our core inflation measures housing costs are Something Like 40 . Housing prices are sticky. This is going to keep core inflation up. Not headline inflation. This is a big difference between the Federal Reserve and other Central Banks. You can criticize it for several reasons and mandates and other stuff but at the end of the day targeting core inflation is superior to targeting headline inflation because of the noise. Im confused. Hold on. Was the swiss frank because the swiss are so frugal and they dont they have their house in order is that why its always seen as a safe haven. Always of course. How could they possibly have the same currency as greece. They dont. Im not saying euro but it was tied to this had to happen didnt it . The point is the reason why they created the peg in the first place was to help all of their multinational corporations because the swiss frank was get sog strong it was going to make it impossible for them to trade. Its not about trade. Its about deflation. Im talking about why they initially did this. Why they initially did this. Its not about trade. Its about deflation. It was always about deflation. It was never about trade. They wanted to prop up their economy and they did. The big question is what happens to their economy. Lets bring in steve reese. Global head of equity strategy at jp morgan. He just got off the phone with his colleagues in europe. Where were they in europe. Freaking out. It doesnt matter. They all have the same currency. Did you talk to someone in switzerland. London. Close. Pounds. Same continent. Switzerland is about 17 of the overall European Equity market today and its an export driven economy so its a negative for switzerland but on the margin it removes a competitor for the broader euro zone. I dont think it derails the story in europe. Negative for swiss stocks today. Theyre down about 5 to 6 in local terms but look at them in euro and theyre actually up. The timing i think is very interesting ahead of the ecb next week. They had to do this ahead of the ecb meeting. For sure. We just saw yesterday that the court clears the way. That was going to be the last Sticking Point to say that maybe the ecb would have trouble doing this soon but the deck was cleared and theyre trying to move ahead of this. Exactly. Whats most interesting to me is this is a three year trade but the bottom line is Central Banks, bottom line is intervention eventually always fails in the market. We really thought this was going to be different. This with the most outlier case weve ever seen. How big is the Swiss National bank compared to the ecb. Its tiny but the dynamics that you cannot control your currency forever. The market is going to pressure you to where it wanted to go. Okay. So now, because this is so insane. Its reviving concerns held by households and banks and this is putting pressure on all the banks already theyre down 5 and 6 . Why . Swiss frank rates are negative. Its easy to finance because it seems like poland has pay back and the frank is going to be much more. Much more. Whatever you made up on the low Interest Rate you more than lost. Thats the game people always lose on. Remember they took out the foreign currency mortgages before the swiss adopted negative Interest Rates. This is the kind of problem that we see not just in Eastern Central europe but remember the bis report. Many countries and companies have borrowed dollars on low Interest Rates and the weak dollar. Theres a currency mix match out there and swiss even though its a small economy measured by gdp its above its weight. Its currency is an International Currency. People flock to it. It could have continued to intervene like it had been. The market didnt force it too. The swiss chose not to continue to build reserves through intervention. Expanding its balance sheet. It was not the market that other Central Banks telegraphed their moves. It caught the market by surprise. Thats why were reacting. Are we on a line thats being tape recorded . Is that why we keep hearing the beep. Im afraid so. Dont say anything you wouldnt want other people to know about. Wait a second isnt everything we say always going out were on tv anyway. Recorded and live. Marc what do you think the Financial Sector implications are for this . Because what we dont know is how big the losses are in all of this and how big is this going to be everywhere. Not just for example a lot stopped quoting them today. Some of them might go out of business. Theres a lot of fall out of this that we do not yet know and its going to be very interesting to see exactly what happens the next couple of weeks. I feel better for Retail Investors in Foreign Exchange. Its a dangerous game but i dont think thats the biggest problem. No but i mean the market is going to rally. I think that we saw that move yesterday down to below 180. U. S. Yields are going to continue to fall. Investors, retail and institution have little choice but to move into equities because the yields in the bond market are too low for even people that need fixed income. So rather than worrying about retail id worry about people that live on fixed income. Theyll be hurt by this continue decline in yield. Not the retail speculator taking on risk at their own desires. Do we need to put a foreign franc relationship do you have any idea its the 100 fillers make it. Just in case you were worried. Im going to watch the ratio. I cant do this marc. Remember when like the end of the year i said its going to be a most volatile year even in my wildest imagination didnt think it was going to count like this. You thought you could count on the Swiss National bank. I think this may be the first shoe of many to drop as we go forward. The Financial Markets will be in much bigger turmoil than all of us think. How come we never complained about the Swiss National bank being like china as a currency manipulator . Well because theyre well you know the swiss is the biggest and the most pronounced in the g10 universe but every central bank is trying to control their currency one way or another. Swiss was the most obvious and strictest in terms of their approach. I go further the swiss is not part of the g10. Theyre not part of the g7 agreement. The swiss economically is a small part of the World Economy so when the Federal Reserve, actually the u. S. Treasury issues its report a couple of times a year about Foreign Exchange market they give the Swiss National bank a pass because its too small to really matter in the global event from the Federal Reserve and the treasurys point of view. It clearly matters to markets. Often times they come from places that we werent watching that you didnt think mattered all that much. Its is a well established International Currency of risk reserve. The swiss franc can sink us. Go ahead. Its a very small part of global reserves. This is a important for speculators and some investors but at the end of the day its more indicative of the pressure of other countries as well with Falling Oil Prices experiencing deflation and disinflation and what it really turns into is very low nominal growth. This is a challenge not only for the Swiss National bank but all Central Banks including the Federal Reserve we also have low nominal go from the u. S. They going to raise Interest Rates this year. The fed is. I thought it was data dependent. I think they will. Would you buy today . You say buy equities then. We are. We thought this year would be more volatile and were seeing that play out. I think theres a great time to be slowing adding u. S. Equities. Top sectors are consumer discretionaryies discretionaries. Do you think we should break up jp morgan. I cant comment on that. You love that stuff. I know you love that. He lizelizabeth warren relates back to her once again. Always. Thank you for making us feel smarter about this. We appreciate it. A major Product Launch from the company many call the apple of china plus whats the real story behind samsung and blackberry. Reports, rumors and speculations sending shares of the canadian smartphone maker. With plus heres a look back at this day in history. Check it out. You just got a big bump in miles. So this is a great opportunity for an upgrade. Sound good . Great. Because youre not you youre a whole airline. And its not a ticket youre upgrading its your entire operations, from domestic to international. Which means you need help from a whole team of advisors. From workforce strategies to Tech Solutions and a thousand other things. So you call pwc. The right people to get the extraordinary done. Chinas Biggest Smartphone maker unveiling its latest device with the goal of going head to head with the iphone 6 plus. Eunice has details on that. Good morning, xiaomi means little rice but the Chinese Company has big ambitions. Theyre the Third Largest smartphone maker in the world behind apple and samsung but the company has been able to really do that and gain ground because it has been able to sell a very acceptable phones at cut rate prices. Now what were see as good that the ceo is moving into the premium end. He is going to be unveiling the xiaomi note. This is a phone he says is going to go head to head directly with apples iphone plus. He went through all the specs. Lots of different features including a 13 megapixel camera. He said that overall its going to be thinner as well as shorter and lighter phone han the iphone 6 plus. The price is what is attractive as well. The base model is 376. The proversion which is the one competing on the high end is going to be 540. Its still cheaper here than the iphone 6 plus in china but at the same time it is showing a bit of a departure from xiaomi into the high end and taking apple on head to head. Thank you for that report. Lets talk about blackberry and samsung this morning because theyre denying that theyre in deal talks. Routers report said samsung offered to buy the company for 7. 5 billion. The stocks surged on that report but then dropped in a big way. Quite sharply on the companys responses. Here with us this morning is amil. He is communications analyst. Good morning. Thank you. Do you believe them when they say theyre not in talk or do you believe the original report . Lets go back. We already had some form of speculation in one shape or form of blackberry being taken out. Now if you look at the commentary he is saying that everything is on the table. Ceo of blackberry. Correct. He said i dont rule anything out. Im transforming this company. Whatever is best for the shareholders hell do. Is he transforming the company . Is there value . Is there 7. 5 billion worth of value. Besides becky being a customer theres not a lot left. You have to look at what blackberry does. I look at it in three or four different parts. We all agree that they were pioneers in enterprising. People say the value of the patent portfolio, somewhere between 1. 2 and 1. 5 billion. Sure depends on who is counting. Who is counting. Then you have the operating system. They have a new operating system. The world has evolved into an ios and android. Do we say thats worthless. Or do you say that samsung wants to create differentiation and you talked about xiaomi. You want differentiation. Do you write it off . Call it half a billion . Billion . I dont know what it is and the third component is infrastructure. Every quarter they spent, 300 million in spending