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Egan Jones Does Not Back Off On Jefferies, Warns Will Cut Again "Without A Major Deleveraging"

Tyler Durden's picture




 

Following the earlier spirited defense of JEF by Oppenhemier and outright bashing of Egan Jones, Sean Egan fires right back.

Synopsis: Prior reports excluded projections because of the skewed financials relating to the FYE change; a more granular liquidation analysis is avail. upon request. JEF needs to raise equity (i.e., $1B) AND deleverage to reduce its 9.5+% LT yield. JEF's total debt to capital is 90.4% vs. 67% for IBKR, 62% for RJF and 43% for GFIG. GS and MS have ratios near 88% but they are significantly larger and should have some federal support via their banking charters. Furthermore, MF's freezing and shortchanging client funds have increased scrutiny of other medium-sized brokers. Raising $1B in new equity and reducing assets by $5B would reduce total debt to capital to only 86%. Watch the cost and availability of funding. We will cut without a major deleveraging.

Full note

 

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Wed, 11/23/2011 - 13:32 | 1907308 Bolweevil
Bolweevil's picture

Egan-Jones "We'll cut you." (C) 2011

catchy

Wed, 11/23/2011 - 13:37 | 1907339 redpill
redpill's picture

Cut me, Mick!

It's fun to watch these little spats because everyone knows the truth that Jefferies is facing probable failure at some point in the medium term future, but there's always the folks that get pissy when someone points it out.

If credit conditions weren't what they are this might be a different scenario.  But for the time being, you're either TBTF and get money from daddy gov't, or you're fucked.

So Jefferies, where you going to get the money?

Wed, 11/23/2011 - 13:40 | 1907351 Popo
Popo's picture

Good. About time.

Wed, 11/23/2011 - 21:03 | 1909020 Buck Johnson
Buck Johnson's picture

Couldn't have said it better myself, dead on target.  They are F'ed and everybody knows it, that is why they are protesting so much.  They are MF Global number two coming around in a few weeks and they don't have the money to pay out.  How much you wanna bet that MF Global isn't the only one that has used clients money to make large bets and try to get massive profits.  If their clients are short and they know it them coming out is an attempt to keep a run from happening because their segregated accounts aren't segregated anymore.

Wed, 11/23/2011 - 13:39 | 1907350 c'mon man
c'mon man's picture

We will    We will  Cut you

We will    We will  Cut you

Jefferies your a boy make a big noise...

Wed, 11/23/2011 - 14:12 | 1907473 ilion
ilion's picture

I wonder when will we hear of some MFGlobal peer blowing up in Europe?

Wed, 11/23/2011 - 23:48 | 1909376 covert
Wed, 11/23/2011 - 13:32 | 1907310 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

As JEF rises above 6.66% pigs are flying and unicorns are shitting skittles.  Hellalujah!

Wed, 11/23/2011 - 13:32 | 1907311 Doomsday Profit
Doomsday Profit's picture

Say goodbye to Jefferies bitchez!!!!!!

Wed, 11/23/2011 - 13:33 | 1907317 GeneMarchbanks
GeneMarchbanks's picture

Sean Egan will win this fight but not yet. Give it a quarter or two.

Wed, 11/23/2011 - 13:33 | 1907319 Caviar Emptor
Caviar Emptor's picture

The iBanking shakeout will continue. De-Financialization, Bitchz

Wed, 11/23/2011 - 13:35 | 1907328 CPL
CPL's picture

The hedge for this move is FAZ

Wed, 11/23/2011 - 15:49 | 1907960 Bolweevil
Bolweevil's picture

I watched FAZ drop into 30's and my triple inverse fincisla sense started tingling. Didn't pull the trigger. hope you ride that sucker back into the 70's.

Wed, 11/23/2011 - 13:35 | 1907331 NorthenSoul
NorthenSoul's picture

My money is on Egan Jones.

Shorting Jefferies!

Wed, 11/23/2011 - 13:37 | 1907343 transaccountin
transaccountin's picture

jef up 9% lol. short it

Wed, 11/23/2011 - 15:05 | 1907737 DarkestPhoenix
DarkestPhoenix's picture

Yeah, right....there are about half a dozen short positions I'd like to open (incl. JEF) but eTrade can never borrow the shares.  WTF.

Wed, 11/23/2011 - 13:39 | 1907347 IrritableBowels
IrritableBowels's picture

Anyone holding their FAZ through turkey day?

Wed, 11/23/2011 - 14:02 | 1907435 Desert Irish
Desert Irish's picture

Currently debating - probably not. Hate to be holding it with no escape if Germany agrees to print or even floats the mother of all bailout rumours.

Wed, 11/23/2011 - 17:29 | 1908445 IrritableBowels
IrritableBowels's picture

I'm in. How'd you like the 10 minutes-to-close rally!?!

Wed, 11/23/2011 - 13:40 | 1907356 Lance3779
Lance3779's picture

Looks like the market is indicating Egan Jones credibility down, JEF credibility up. 

Wed, 11/23/2011 - 13:41 | 1907361 fuu
fuu's picture

Like the market knows anything.

Wed, 11/23/2011 - 13:47 | 1907387 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Yeah, JEF is a great buy, but nothing else in the banking sector is.  Makes perect sense considering JEF is on the hook of massive amount of Euro debt.

Wed, 11/23/2011 - 13:41 | 1907357 Caviar Emptor
Caviar Emptor's picture

OMG! What's a Global Bankster to do??

My global bankster buddies are all calling for ZH to lighten up: they have their jets on the runway heading for the Riviera, and their yachts are just getting deliverd in South Florida for the start of the season. AND they have parties to plan and miles to go before they can pay ANY attention to markets and liquidity issues....OMG! What's a global bankster to do??

Wed, 11/23/2011 - 14:04 | 1907442 earleflorida
earleflorida's picture

egan jones - i like that name

Wed, 11/23/2011 - 13:42 | 1907363 hmmmstrange
hmmmstrange's picture

Groupon has a discount for JEF's next bond.

Wed, 11/23/2011 - 13:42 | 1907366 vegas
vegas's picture

Telling the truth is a bitch isn't it Sean?

 

http://vegasxau.blogspot.com

Wed, 11/23/2011 - 13:43 | 1907368 props2009
props2009's picture

Brilliant accurate since they launched:

http://www.marketoracle.co.uk/Article31341.html

 

return of fear in Nov was Capital3x article published on Nov 3

 

 

Wed, 11/23/2011 - 13:48 | 1907388 The Axe
The Axe's picture

Sorry but my bet is on Jefferies...Insiders are putting up to much of their own cash... worse case..they   relent...and become a bank holding company....A lot of smart dudes at jefferies...alot...

Wed, 11/23/2011 - 14:36 | 1907581 jcaz
jcaz's picture

Oh ya?  Where's Dicks money at then?   Oh ya-  he already cashed out....

Wed, 11/23/2011 - 13:58 | 1907418 s2man
s2man's picture

Didn't Tyler print those debt:cap ratios two or three days ago?

Wed, 11/23/2011 - 14:07 | 1907456 slaughterer
slaughterer's picture

Sold my JEF at $10.915 today.  7.62% gain.  Cannot take this pissing contest with Egan Jones anymore. 

Wed, 11/23/2011 - 14:21 | 1907509 Seer
Seer's picture

Everywhere you look you can see the common theme, THE "problem."  It's MATH!  Yup, if we just did away with math none of this would be an issue.

I'm sure that math is an intentionally crafted conspiracy to instill pain and suffering on... on the poor 1%!

Coming to a country near you, "leaders" to instruct legislators to outlaw math...

Butt-head: Uhhhh... I'm, like, angry at numbers.
Beavis: Yeah, there's like, too many of them and stuff.

Wed, 11/23/2011 - 14:28 | 1907548 slewie the pi-rat
slewie the pi-rat's picture

give me a big enuf lever and...

...mrMarket will prob break it over my styooopid head!

Wed, 11/23/2011 - 14:55 | 1907675 navy62802
navy62802's picture

Apparently this is good news for investors??? JEF currently (as of 1354 EST) up 4.4% while the DOW is down 1.5% on the day.

Wed, 11/23/2011 - 16:56 | 1908289 ToNYC
ToNYC's picture

Is it certain that JEF did not have the lamb's blood on the door when the greenFED cloud drifted over?

Wed, 11/23/2011 - 18:15 | 1908626 Carlyle Groupie
Carlyle Groupie's picture

I tell you man, call in David Copperfield! NOW!

Wed, 11/23/2011 - 22:01 | 1909155 Use of Weapons
Use of Weapons's picture

.

 

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