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It's a funny time of the currency markets when the Swiss franc jumps 30% in a day. That's the kind of move you expect from bitcoin, not a tangible currency with a physical address.

Coincidentally, bitcoin fell 30% just the day before. Both BTC and CHF partly rebounded during the trading day.

Volatility, it's what's for dinner!

Matt Levine explains how FXCM, Alpari, et. al. screwed up.

Matt Levine has an entertaining piece in Bloomberg View on how all those brokers lost all that money when their retail speculators were losing their shirts:

Imagine being a retail foreign-exchange broker and letting your customers day-trade Swiss francs with lots of leverage. How much leverage would you feel comfortable giving them? Well, if daily moves are typically less than 0.1 percent, then that means that 95 percent of the time their positions will move by less than 0.2 percent in a day. So if you required 2 percent margin -- that is, you demand $2 of cash from them for every $100 worth of Swiss francs that they trade -- you'd feel pretty safe. That would mean that, 95 percent of the time, customers couldn't lose more than one-tenth of their equity in a day -- so if they lost money and skipped out on you, you'd be able to liquidate their positions without getting close to losing any of the money you'd lent them.

On the other hand when the euro/franc moves by 19 percent in a day, they're gonna get utterly smoked, and so are you. This is roughly the boat in which FXCM Inc. finds itself.

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It's good to occasionally remember that a margin loan is a put: If you let your customer buy something for $100, and you lend them $98 of the purchase price, and then the price of the thing falls to $81, then guess what, you own the thing! Also you've lost $17. I mean, you can call the customer and ask for more money, it can't hurt. But you're not going to, like, feel full of joy and confidence while you're making that phone call.

Ta-Nehisi Coates beginning to write about the recent events in Paris.

http://www.theatlantic.com/international/archive/2015/01/i-might-be-charlie-hebdo-paris/384501/:

I came to Paris, last week, with a fairly well-defined mission. Halfway through the week, events overtook me. On Thursday, I was determined to ignore the terrorist attack and plug away on my own projects. But by Saturday, I was in a room with some Paris friends discussing the fallout, and on Sunday I was at a brunch with those same Parisians and then off to la manifestation. Since then I've done almost nothing but talk to the people who call this city—and its banlieues—home. I have so much to tell you, but it's raw and unseasoned. I need some time to marinate and then cook.

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I am here for a little while longer. My hope is that by the time I leave I will have graduated from "Internet smart" to the ranks of the "sort of knowledgeable." I'm talking to everyone I can. I'm reading as much as I can. I'm endangering previously agreed-upon deadlines. History is happening around me and I am not equipped to understand. I am mostly unequipped because I only have the barest understanding of the emotional aspects of patriotism. I have spent the past week asking people what, precisely, they believe themselves to be defending. The answers have been fascinating.

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I don't yet know how all of this connects to the events we are seeing today. But I proceed from the working theory that all nations like to begin the story with the chapter that most advantages them and the job of the writer is to resist this instinct. And I proceed from the working theory that the story of black people in America, is an excellent launchpad for a larger investigation into the limits of democracy and compassion throughout the West. It is not the sole launchpad, and the investigation must, ultimately, go beyond the simple of drawing of parallels.

But it is a start—the only start I have. I don't have much time here. And this is a very new space for me. I have studied black people all of my life. I have only studied the Francophone world for three years. I am, as always, very afraid.

More soon.