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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Bolweevil's picture

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


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?

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.

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...

ilion's picture

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

Mr Lennon Hendrix's picture

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

Doomsday Profit's picture

Say goodbye to Jefferies bitchez!!!!!!

GeneMarchbanks's picture

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

Caviar Emptor's picture

The iBanking shakeout will continue. De-Financialization, Bitchz

CPL's picture

The hedge for this move is FAZ

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.

NorthenSoul's picture

My money is on Egan Jones.

Shorting Jefferies!

transaccountin's picture

jef up 9% lol. short it

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.

IrritableBowels's picture

Anyone holding their FAZ through turkey day?

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.

IrritableBowels's picture

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

Lance3779's picture

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

fuu's picture

Like the market knows anything.

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.

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??

earleflorida's picture

egan jones - i like that name

hmmmstrange's picture

Groupon has a discount for JEF's next bond.

vegas's picture

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

props2009's picture

Brilliant accurate since they launched:


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



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...

jcaz's picture

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

s2man's picture

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

slaughterer's picture

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

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.

slewie the pi-rat's picture

give me a big enuf lever and...

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

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.

ToNYC's picture

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

Carlyle Groupie's picture

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

Use of Weapons's picture



Paid troll - blocking in effect.