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Wall Street Poised For Another Revenue Bloodbath After Harbinger Jefferies Reports 56% Fixed Income Plunge

Tyler Durden's picture




 

We have previously explained why Jefferies, arguably the last standalone (despite its purchase by Leucadia a year ago) investment bank on Wall Street is so informative:

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 just like last quarter, earlier today Jefferies reported its earnings for the quarter ended February 28, which capture the trailing two-thirds of every other bank's first quarter period (those who now have a December 31 year end).

The result, just like last quarter, was a disaster and indicative of nothing short of a trading bloodbath on Wall Street in the past 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... for the second quarter in a row.

The bottom line, and what everyone who is awaiting the latest FICC numbers from the balance of the banks will be focusing on, is the 56% drop in Q1 revenue from fixed-income trading, down to $126 million from $286 million a year ago.

Investment banking did not help either, plunging by 34% to $272 million from $414 million.

The only silver lining: equities did not plunge, and in fact posted a modest increase of 8% to $203 million. Now if only Jefferies could change its image from a middle market junk-bond specialist catering to the world's B2/B credits, to the New Paranormal's equity powerhouse all would be well.

The results in one chart.

 

And here is why Jefferies' fixed income trading suffered. It appears soaring volatility wasn't Dick Handler's friend.

The question is whether unlike last quarter, when Jefferies reported results in mid-December promptly followed by disappointing earnings and revenue and EPS misses at every single TBTF and other investment bank (as we warned then would happen), if this time is different and somehow everyone else succeeded where Jefferies failed?

 

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Tue, 03/17/2015 - 10:43 | 5898042 ghostzapper
ghostzapper's picture

Cry me a river as the Unicorns run out of gas and the parasites don't meet their cutesie little earnings expectations.  

Tue, 03/17/2015 - 10:48 | 5898063 Paveway IV
Paveway IV's picture

"...We're going to have to cut a few divisions and let some people go. Outsource. Tighten our belts, work harder and smarter. Watch every last penny..."

"...and 300% bonuses for senior management..."

Tue, 03/17/2015 - 11:01 | 5898120 highandwired
highandwired's picture

Living the American dream

Tue, 03/17/2015 - 13:02 | 5898633 tarsubil
tarsubil's picture

"...and invest in our company's future by buying stocks at all time highs from executives..."

Tue, 03/17/2015 - 10:57 | 5898089 NoDebt
NoDebt's picture

Weren't the 2014 numbers also off something like 30% from 2013?  I recall they were.  That's 2 BIG down years.

And I don't feel the least bit bad about it.  When you kill the real economy in favor of the financialized economy you get.... collapsing organic business growth.

That their CEO's name really is Dick Handler, well, I bet even as the Titanic was going down somebody was cracking jokes.

 

Tue, 03/17/2015 - 11:04 | 5898135 KnuckleDragger-X
KnuckleDragger-X's picture

Things are going great. Why the last I checked CalPers, they were promising a 7% return and they would never lie. I do kinda wonder about the Fed, has it never occured to them that by destroying the retirement savings eventually even a small market collapse will put the old folks on the street and the politicians fear the old fart vote. Public hangings in front of the Eccles bldg. is a possibility.....

Tue, 03/17/2015 - 11:10 | 5898155 NoDebt
NoDebt's picture

Old people don't have the energy to do anything but vote (everyone else is too lazy to do even that much).  Both parties are on the same side now and want the same things.  We'll all get smacked around like Detroit pensioners sooner or later.  Did they protest?  Not much.  Just sat there and took it.

Tue, 03/17/2015 - 11:35 | 5898257 Harbanger
Harbanger's picture

You can Protest for pensions but that ain't gonna bring them back, the gov is broke, the pensions can only be paid in devalued worthless money.  You can hang a few CEO's who got 300% bonuses and burn down wallstreet and your neighborshoods, but the Bankers and political system that bankrupted you still remain in control.  They will be the ones promising social justice to the street mobs.  Nothing changes, adjust to the new global Venezuela.  And get your PM's out of the country because if they ever rise in value, you will targeted as the new rich.

Tue, 03/17/2015 - 17:40 | 5899798 Ward cleaver
Ward cleaver's picture

No big deal, they don't have water so
who gives a rat's ass about returns

Tue, 03/17/2015 - 11:12 | 5898166 Dr. Engali
Dr. Engali's picture

Gallows humor.

Tue, 03/17/2015 - 11:45 | 5898312 Consuelo
Consuelo's picture

'Hangman, hangman - hold it a little while, think I see my good friends coming, riding many a mile'...

Tue, 03/17/2015 - 17:37 | 5899790 Ward cleaver
Ward cleaver's picture

Up vote for any Zeppelin reference. BTW, I
Know this firm and basically a mid size B/D acting
like a big boy.

Tue, 03/17/2015 - 10:43 | 5898043 venturen
venturen's picture

DIE MFers!

Tue, 03/17/2015 - 10:44 | 5898044 101 years and c...
101 years and counting's picture

it was too cold to trade this winter.  

Tue, 03/17/2015 - 10:46 | 5898053 Dr. Richard Head
Dr. Richard Head's picture

There's a prop desk for that. 

Tue, 03/17/2015 - 10:50 | 5898055 TruthBeforeAll
TruthBeforeAll's picture

What about declining-income trading. How's that doing?

Tue, 03/17/2015 - 11:06 | 5898140 KnuckleDragger-X
KnuckleDragger-X's picture

Just great, lots of decline there....

Tue, 03/17/2015 - 10:46 | 5898058 Osmium
Osmium's picture

"It appears soaring volatility wasn't Dick Handler's friend." 

Seriously?  His name is Dick Handler?  LOL

Tue, 03/17/2015 - 10:47 | 5898061 Bill of Rights
Bill of Rights's picture
Jefferie Jefferie Jefferie
Tue, 03/17/2015 - 10:58 | 5898104 NoDebt
NoDebt's picture

Marsha, Marsha, Marsha.

Tue, 03/17/2015 - 10:50 | 5898069 GMadScientist
GMadScientist's picture

Squeeze that turnip! Squeeze that rock! Squeeze that negative yield!

Tue, 03/17/2015 - 10:50 | 5898071 Bryan
Bryan's picture

Revenue schmevenue.  Just print moar money.

Tue, 03/17/2015 - 10:51 | 5898078 Seasmoke
Seasmoke's picture

Dick Handler. Dick Trickle. Richard Head. Awesome names indeed. 

Tue, 03/17/2015 - 11:30 | 5898237 Colonel Klink
Colonel Klink's picture

You forgot Richard Fromage!

Tue, 03/17/2015 - 17:35 | 5899781 roadhazard
roadhazard's picture

Here comes Jack Meoff.

Tue, 03/17/2015 - 17:41 | 5899799 Ward cleaver
Ward cleaver's picture

With I P Daly

Tue, 03/17/2015 - 10:52 | 5898079 Kilgore Trout
Kilgore Trout's picture

Dick Handler to be replaced by Peter Fondler.

Tue, 03/17/2015 - 11:01 | 5898116 RobD
RobD's picture

Some parents can be so cruel! Knew a guy named Richard Furr, boy did he get pissed when you called him Dick hehe.

Tue, 03/17/2015 - 11:05 | 5898137 Osmium
Osmium's picture

I knew a Richard Rash.  Did not care for being called Dick either.

Tue, 03/17/2015 - 11:15 | 5898179 Australian Economist
Australian Economist's picture

Suk Mai Kok - Asian Division

Tue, 03/17/2015 - 17:37 | 5899788 roadhazard
roadhazard's picture

I knew a girl who's last name was Scagg.

Tue, 03/17/2015 - 10:54 | 5898093 disabledvet
disabledvet's picture

Big Banks can deal in Government credits. Seems like the real chop shops will be in restructuring plays...like the failed one going on in Greece right now only without the clowns as Goldman Sachs.

Tue, 03/17/2015 - 11:07 | 5898143 Dr. Engali
Dr. Engali's picture

Damn! The bankers need bigger bonuses so they can continue to trickle on us. How am I going to feed my kids now?

Tue, 03/17/2015 - 11:08 | 5898145 madcows
madcows's picture

what's fixed income?  Is that when I have to pay someone to hold my money?

Tue, 03/17/2015 - 11:28 | 5898214 Government need...
Government needs you to pay taxes's picture

These days it's tough to be a tapeworm sucking the financial lifeblood out of Americans.  Note the compensation and benefits line on the income statement.  Up 18% YoY.  Now that's killing it (America).

Tue, 03/17/2015 - 11:28 | 5898229 Colonel Klink
Colonel Klink's picture

Fuck Fraud street and the tribe they rode in on!

Tue, 03/17/2015 - 11:31 | 5898234 Billy Shears
Billy Shears's picture

 

 

Sorry wrong post!

Tue, 03/17/2015 - 11:38 | 5898278 Miss Expectations
Miss Expectations's picture
Nomi Prins-People Don’t Have Any Moneyhttps://www.youtube.com/watch?v=ARHyKCbSrNY#t=1263
Tue, 03/17/2015 - 12:26 | 5898484 847328_3527
847328_3527's picture

As long as the bankers get their commissions and CEOs get their generous stock options, everything is Bullish!

Tue, 03/17/2015 - 13:00 | 5898626 NoTTD
NoTTD's picture

Should be sufficient to get us Dow 20k.

Tue, 03/17/2015 - 13:02 | 5898631 NoTTD
NoTTD's picture

"Dick Handler"?  Love it.

Tue, 03/17/2015 - 17:04 | 5899701 theyjustcantstop
theyjustcantstop's picture

I don't see to where this is a surprise.

#1, the msn, and brokers flooding the market place with all good news in equities, some probably bit, and cashed in the mma's.

#2. the looming factor of your mma's being gated, instead of earning .005%, you could lose 2%-5% if you were gated, and the mattress was a real factor.

#3. the big plan is working, people are drawing on savings to live, or support other family members, and no matter what happens, this will continue for a generation.

 

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