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Wall Street Harbinger Jefferies Reports Q4 Bloodbath: 73% Plunge In Fixed Income Revenue, 45% Drop In Equities
Following the conversion of all of its failed peers into bailed-out, FDIC-insured bank holding companies (speaking of which, where can one find a Goldman ATM these days?), middle-market focused Jefferies may be best-known as the last true investment bank standing. Or at least was until Leucadia came and gobbled it up a year ago.
But what Jefferies is best known for among Wall Street shareholders is that, by still reporting a Nov. 30 fiscal year end, 1 month ahead of everyone else, it provides an invaluable glimpse into the fortunes of its Wall Street peers with a 4 week advance notice, especially when it comes to its bread and butter: fixed income trading (recall that CEO Rich Handler was a Drexel bond trader when the firm blew up). And report it did earlier today, although most of Wall Street shareholders would rather it didn't, because the numbers were absolutely abysmal, and indicative of nothing short of a trading bloodbath on Wall Street in the latest three months of trading. In fact, if this is what one should expect out of the larger Wall Street names in a few weeks when the big banks close the quarter, then it may be best to skip earnings season altogether.
The numbers:
- A 73% drop in Q4 revenue from fixed-income trading, down to $61 million from $227 million
- A 45% drop in Q4 revenue from equity trading, down to $158 million from $290 million
- A 24% drop in Q4 revenue from investment banking, down to $316 million from $417 million
Charted:
Overall, Q4 net revenue crashed by a whopping 43% to just $538 million (resulting in a net loss of $92 million) driven by the plunge in revenues from fixed income and equity trading. There is a caveat: it wasn't just a plunge in flow volumes: Jefferies decided that it was smart to have some prop positions on too. Positions which had yet another spectacular blow out. From Bloomberg:
Jefferies Group reported a 73 percent drop in fourth-quarter revenue from fixed-income trading as the firm sustained losses on distressed debt, including Fannie Mae and Freddie Mac securities.
“We experienced a very challenging fourth quarter,” Chief Executive Officer Richard Handler, 53, said in the statement. “Despite these results and our decision in respect of pursuing strategic alternatives for our Bache business, we believe Jefferies’s prospects for 2015 are solid, with our investment-banking backlog currently robust, and an expectation of more normal trading markets.”
Still, it is safe to say that with vol surging in the last quarter, most if not all banks will come well to the low side of FICC expectations: "Fixed income was affected by heightened volatility starting in September and a tepid trading environment that led to mark-to-market writedowns, the firm said. The bank reported $55 million in negative revenue from distressed trading following a slump in those markets, it said."
Finally, while it is not a secret that Goldman has almost single-handedly taken over the advisory business, mostly on the M&A (and stock buyback advisory) side, the tradeoff is that there is very little residual business left for everyone else, such as smaller firms like Jefferies.
Investment-banking revenue declined 24 percent because of “dampened capital-markets activity due to the unsettled markets, which in turn led to the postponement of deals into future periods,” the firm said in the statement.
The only good news, if any, is that Jefferies said the tabloid drama surrounding its ex-UBS rainmaker Sage Kelly did not hurt its revenues. "The impact from the unusual publicity in late October and November was immaterial” to earnings, the firm said in the statement. Which show that the cost to shut up the disgruntled Mrs. Kelly was far lower than the most optimistic estimates.
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i guess they better hedge accordingly tho..
http://hedgeaccordingly.com/2014/12/colorado-teens-arent-smoking-weed-as...
Looks like Dick Handler will have to do some dicking around after his firm goes kaput.
And Apple has decided to stop selling its Chinese made iShit in Russia.
http://www.thefly.com/landingPageNews.php?id=2118063&headline=AAPL-Apple...
This was the 18th Seal in Revelations or something.
"And Apple has decided to stop selling its Chinese made gadgets in Russia for dollars." --- fixed, please stand by while we make this transition and expect there to be some turbulence in the "markets"...
'tepid trading environment that led to mark-to-market writedowns'
What? You weren't marking to fucking market before this?!?!?! Did I miss something here?
A once great firm turning vanilla.
Jump you fuckers!
Holy Shit I just scanned right over that.
This guy's name is DICK HANDLER. Are you fucking kidding me?
Is this some sort of joke? Like the $72 million teenager?
This pimping is so annoying, I will never read your blog or click on your link
Fuck yo blog!
No worries... bail-ins.
Sage!
What an awesome trainwreck
Don't worry, tomorrow the Fed will announce a new stimulus program where you can return your holiday presents and receive a gift certificate that you can use to buy stocks.
But, but, but it's all rigged. And what of the secret Bilderberg information? The CFR connections? The Lizard people surely would have know what to do! How can this all be????
LOL
Or the interstellar lizard kings withdrew their money early....
Any time someone mentions Lizard people; I give them a thumbs up!
I love it when they talk dirty ..........
Sung to the tune of Television Personalities’ ‘Geoffrey Ingram’:
Jefferies tried for VWAP, but got there minutes late
Goldman took the other side and squashed them like a grape
Jefferies is the type of firm that never gets away with that sort of thing
Oh! Will that impact bonuses?
Yep. They'll be bigger!
Start playing this for background:
https://www.youtube.com/watch?v=Wu4oy1IRTh8
It absolutely amazes the learned observer in seeing these evil things from the zionutzyville hasbara here pretending to be something more than a pile of shit and doing all they can to spread their hate to instigate hard feelings between the Russian Folks, and the American People.
Typical dog-yard poop and ancient methodologies that are as outdated as the silly idiots here who waste not only their time and energy in this instigation of moar war for zionuttyness and the wickedness of profiting from war, chaos, and destruction, but also that of the fine contributors here. It is hard to fight a coward that hides behind the rothchild skirts teasing and taunting knowing daddy will defend them to the death. At this time in history it is a race to see who takes these asswipes out first. The defenders of righteousness, or their own master slavers that have given the world a pile of shat, and made everyone believe it smells like roses.
Hey arseholes, your day is coming. We are tracing and tracking your whereabouts and will expose you soon as the sewer rats and scum-lords you all are.
NOW HEAR THIS!
Everything under the sun has been co-opted by the rothchilian empire of dust. There is NO ONE else that is responsible for the things that are happening in the world of warcraft today. Here is a long list of the puppets in places like the cfr, bild, tri-lats, and positions of governmental power. The saudis, europe, england, and the usa are all owned by the progenitors and probagators of the money-god. Everything happens according to the long aged world domination plans of the money-god creators. Stop wasting time pointing fingers at the ZONK (zionutz of nonessential KooKooville) puppets and paid off butt licking mercenaries of the overlord masters. Or in other words, stop whacking at the branches and go for the roots of all evil itself.
Every sane person in EVERY NATION should stand up to the plate as one family, and tear these evil satanic/luciferian roots right out of the earthly ground they have infested for centuries too long. Not yesterday, but RIGHT NOW before they kill off every soul on earth. It's a race and who is winning it now? The money-god, and it's slave exchangers. Surly, there are many here with vast multitudes of Light/knowledge to share about how to end the support and patronage of these evil things that profit from death, and destruction?
Is the worldwide-brotherhood of Man going to continue to be the “useless idiots” for these assklowns, by continuing in the supporting and holding up the idols and banners of evil, or will they all unite WORLD-WIDE and just say, no moar! Enuff of the kow-towing to the destruction and death they have planed for everyone. Who lives, to pay for their own slow death? Not a single slave will escape the final solution if they are continually supported, financed, ignored as the world threat they are, and allowed to do it to the world's Peoples...one day at a time.
Mandate: Sir Tyler, you kicked so many of us off this site for speaking our truth about these evil things when they bitched and cried at you. How about cleaning them out of ZH so the rest of the good world folks here can share their truth without the distractions of these evil wicked horrid nasty money-god freak tribal slave shit flies.
Im submitting this for comment of the year!!
I applauad LOUDLY + 1000 but yapping here isn't going to change much there are those who try to point people in the right direction and thats all we can do.. I've been trying for years and have been called every name in the book and a few interestingly fabricated ones as of late.. never the less keep pushing forward if you open the eyes of one it eventually will lead to many. believe me when I started there were almost none we have come a long way sadly is still a longer way yet to go. Just keep up the good fight... remember everyone that becomes aware is a force multiplyer as I've told many don't get frustrated keep moving..if they don't respond don't waste un-needed effort move to the next. as far as the forum goes you'll know who has eyes that see this for what it is the rest once again I say don't waste your time
and as an added note for all the war loving/wishing assholes kill yourself do the world a favor... since most of you couch creatins have never actually faced death of any warring kind your self loathing misery and sick giggling at the death of others disgusts me
Epic rant!!
+100 for......evil wicked horrid nasty money-god freak tribal slave shit flies
beutiful thing
A comment so Round,so Firm,so Fully Packed(as my Beloved Departed Dad would have put it)that I nearly Passed Out upon the Reading of it.And on The Hedge,to Boot! Well Said,My Dear Sir! Well said.BRAVO!
Maybe everybody else will make it up between now and year end LOL. I hope bonuses reflect performance.
I love it, negative revenue. Didn't they use to call that a LOSS?
Comedy gold.
Seriously, any minute now 'normalcy' re emerges just like the good ol days of yore and also Fed will raise rates....any minute now we're totally serial.
How about these trades?
https://twitter.com/nanexllc/status/544941976215617536/photo/1
The markets are just going nucking futz into the end of this year.
Oil, rubble, PMs, bonds, Obamanation, ...
Just announced Apple (defendant) won their antitrust suit about iPods deleting others' songs. Justice, maybe, but in antitrust terms it's an outlier, much more innocent cases have been found guilty.
Negative news means positive returns in this hair brained market. Don't worry because the DOW will be up for the week.
Bullish for nail guns
Bullish for nail guns
When the third quarter GDP was announced it came out that a 10% jump in federal spending, mostly on Pentagon hardware had bolstered growth. This was the biggest increase in federal spending since 2009 when the Obama administration put in place a huge economic stimulus package. Still important economic numbers being released continue to come in below expectations and the stock market remains at historic highs. Please tell me what is so good? What is so much better?
As I see it the weight of carrying a large number of unemployed and people who have dropped out of the work force is wearing society down through attrition. The article below points out some of the glaring flaws in the argument that blue sky lies ahead as the stock market seems to indicate. As I look at a landscape of empty and under-leased buildings that once housed thriving businesses that provided Americans with good paying jobs I'm forced to ask, How are things getting better?
http://brucewilds.blogspot.com/2014/10/tell-me-again-how-things-are-getting.html
Translation: "We don't know how to make money outside of a QE world. We eagerly anticipate it's return".