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Jefferies Principal Trading Revenues Plummet 80% Confirming Q3 Wall Street Drubbing: "Trading Volumes Painfully Slow Across The Board"

Tyler Durden's picture




 

Jefferies shares have swooned today as one of the last remaining true broker dealers released Q3 results which missed massively on both the top and the bottom line. And if these are an indication of what most of Wall Street has to look forward to, Q3 will be a bloodbath for banks. As Barron's Tiernan Ray reports, citing CEO Dick Handler (talk about mean parents) that "trading volumes across the board were painfully slow during the months
of June, July and August,
” said CEO Richard Handler — quite a contrast
from Q2’s results, when Handler said the firm was “pleased with solid
quarterly results.” Putting this number in context (from the 8-K), Q3 net revenues were $520 million, versus $700 million last year, a whopping 25% decline primarily as a result in the complete collapse in principal trading revenues to $74.3MM from $338,6MM, an 80% decline in this main profit center for Wall Street firms, which have recently all become nothing but glorified hedge funds.

We will get you the conference call transcript as soon as it is availble as Dick traditionally tends to give an unvarnished look at the industry.

 

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Wed, 09/22/2010 - 09:49 | 596987 Jim in MN
Jim in MN's picture

While I sort of feel sorry for firms with some measure of integrity, the fact is that corruption has destroyed capital markets.  No one with any measure of authority has acknowledged this.  Therefore, the simplest and most urgent financial advice is simple:  Get Out.

Wed, 09/22/2010 - 09:49 | 596988 VK
VK's picture

Looking forward to GS taking a hit bitchez!

Wed, 09/22/2010 - 10:19 | 597083 JR
JR's picture

Looking backward into history, Goldman doesn’t take hits.  They are the hitters.  “They” are the Fed. —“Twentieth Century Economics in One (brutal) Lesson.”

Wed, 09/22/2010 - 10:59 | 597218 VWbug
VWbug's picture

i saw some analyst on GS say he would be lowering his estimates dramatically...can't recall exactly, but something like $1.50/share for next quarter...

if so, i'd say GS is due for a BIG drop...not sure why it's still holding right here. Don't think it will last.

Wed, 09/22/2010 - 09:51 | 596993 vote_libertaria...
vote_libertarian_party's picture

So the small group of HFT shops that employee a small number of people are going to kill the brokerage industry that employees many many more people.

 

I sense there are calls being made to the Congressman screaming "Pull the plug on these guys they're killing us!!!" 

Wed, 09/22/2010 - 09:55 | 597010 fuu
fuu's picture

They get the intern though because the Congresscritter is on the phone requesting donations from the HFT shops.

Wed, 09/22/2010 - 10:00 | 597032 Jim in MN
Jim in MN's picture

 

HFT would really be much more efficient based in India or China....we didn't need a financial sector here anyway, did we?  Is the stench of irony choking anyone else?

Here is the Future: Central banks and their national pension subsidiaries renting gamer kidz to gun HFT algos in Madras and Shanghai.  That will be the sum total of the market.  Oh, and zombie bank subsidiaries of the central banks, like GS and JPM and WFT.  They will pretend to be cool but actually be state bureaucratz.  They already are....

Wed, 09/22/2010 - 09:52 | 596998 TradingJoe
TradingJoe's picture

Hmh, Damn Them Accounting "Rules"!

Wed, 09/22/2010 - 09:59 | 597028 Hephasteus
Hephasteus's picture

Don't worry volume is really going to pick up in October!!!

Wed, 09/22/2010 - 10:02 | 597037 kathy.chamberli...
kathy.chamberlin@gmail.com's picture

jefferies, bad karma.

Wed, 09/22/2010 - 10:03 | 597038 Battleaxe
Battleaxe's picture

Gotta love the morning headlines:

Yahoo Finance, "Stocks Drop After Fed Statement"

10 minutes later, "Stocks Up After Fed Statement"

Should read, "Stocks Up On Treasury Pump Job"

The markets are set up for a BIG drop in the next day or so.

Wed, 09/22/2010 - 10:16 | 597061 Battleaxe
Battleaxe's picture

Update 9:08

Stocks Wobble in Early Trade Following Fed Policy Meeting- AP

Stocks are fluctuating in early trading as traders turn to buying Treasurys and gold after the Federal Reserve failed to take any immediate steps to help the economy.

Wed, 09/22/2010 - 10:26 | 597116 JR
JR's picture

Should read: Stocks are fluctuating in early trading as traders turn to buying Treasurys and gold after the Federal Reserve failed to take any immediate steps to help Wall Street.

Wed, 09/22/2010 - 10:03 | 597039 berated
berated's picture

Speaking of, what time to the POMO festivities start today?

Wed, 09/22/2010 - 10:04 | 597046 Battleaxe
Battleaxe's picture

As soon as Jocko Pomo gets out of bed.

Wed, 09/22/2010 - 10:11 | 597070 Ted K
Ted K's picture

Sing it with me together now folks, this one is dedicated to corrupt/swindling securities dealers, FINRA, hedge funds, and derivatives traders "And my heart cries for you!!!" Main street revenge "bitchez!!"

Wed, 09/22/2010 - 10:48 | 597167 virgilcaine
virgilcaine's picture

W/out an industrial or manufacturing base what need is there for financial services?   The credit bubble became so big it consumed everything and left the shell , now the banks are wondering what happened.

 

Sprott is correct this is the end game of the Keynes monetarists,  (RIP) , An economy based on consumerism/debt flawed from the get go.

Wed, 09/22/2010 - 10:44 | 597168 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Hmmmm, I think of it this way. The stock market is like a giant game of Texas Hold'em poker. The game continues as long as players bring money to the table. This game is and has been rigged for years. The small players were robbed of their money. They are cashing out. No one left to take money from, i.e. retail investors. You made your own bed, now lie in it!

Wed, 09/22/2010 - 10:47 | 597177 Captain Willard
Captain Willard's picture

Tyler -

As you well know, he goes by "Rich", not "Dick".

And he's a lot more forthcoming than all public bank/IB CEOs. But it's clear that business conditions on the Street are deteriorating quickly, as Deutsche Bank and now JEF show.

Wed, 09/22/2010 - 13:17 | 597691 percolator
percolator's picture

Well, I know a guy who's name is Dick Rasch and he doesn't call himself Rich or Richard, its Dick.

Wed, 09/22/2010 - 10:54 | 597198 Caviar Emptor
Caviar Emptor's picture

It's been a long time coming. The day of reckoning on Wall Street is finally here.

Without bailouts courtesy of you and me the downsizing and layoffs would have happened 2 years ago. Now we're actually worse off since lots of the bailout money disappeared into deep pockets in the form of pay for "outstanding performance", but firms and capital markets are still a smoking ruin. 

This is not the kind of cyclic fat trimming we've seen after booms. This is a secular downsizing of an overbloated sector.

 

Wed, 09/22/2010 - 10:54 | 597199 virgilcaine
virgilcaine's picture

In a debt based system when it reaches it max saturation level Economy becomes a hollowed out log lying in the woods.. the rot happens from the inside.  Now they are wondering what happened to the wonderful Tree that once stood.

Wed, 09/22/2010 - 11:53 | 597404 doolittlegeorge
doolittlegeorge's picture

massive pay cuts have been on the "cum" for a long time now and well reported by the WSJ.  again:  "this is devastating to state and local governments" and of course New York City in particular.  We shall see who replaces Summers but to not call his resignation a huge deal is to "minsunderestimate" the way regimes (especially in DC) actually function.  The "big-ness" can be measured in that it's being reported at all as slowly but inexorably the media protections granted this Democratic onion keep getting peeled away.

Wed, 09/22/2010 - 12:27 | 597539 Thunder Dome
Thunder Dome's picture

Trading is seasonal.  The markets are supposed to pick up in September.  Unfortunately, they have been even worse than in July and August.

Wed, 09/22/2010 - 16:31 | 597636 Jones79
Jones79's picture

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CL1's picture

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