Just out from Jefferies which reports that it has lowered its Gross exposure to PIIGS by another 50% (down 75% in total), which we wonder: why, if Gross is not Net? Just ask Morgan Stanley.
- JEFFERIES RESPONDS TO `RUMORS, HALF-TRUTHS AND OUTRIGHT LIES'
- JEFFERIES CITES `INTENTIONAL MISREADING OF OUR PUBLIC FILINGS'
- JEFFERIES REPURCHASED $50M OF 2012 BONDS IN `PAST FEW WEEKS'
And, like Europe, it is all evil speculators fault:
Last week, a representative of a hedge fund, who we understand has been spreading false rumors about Jefferies, sent us a letter with a series of questions that for the most part show what we must presume is an intentional misreading of our public filings to try to support these rumors. All these folks seem to be trying to take advantage of the MF Global bankruptcy and the volatile market environment with a view to harming Jefferies and all of us, presumably for personal gain. With the facts and truth on our side, we have responded to all this directly and completely. Fortunately, those who take the time to understand and truly analyze the facts are reaching the right conclusion. While it may be necessary for us to continue to respond to these ill-conceived attacks, we fortunately can do so on a firm foundation and with confidence in our funding and business model.
It also appears that rumors of PB client exodus were not completely false:
The only recent development in our prime brokerage business has been our moving the custody of certain client assets to J.P. Morgan Clearing Corporation pursuant to a longstanding agreement we have with them whereby we continue to provide all other services to our clients and custody is at JP Morgan on a fully disclosed basis. This is a far cry from false rumors of an exodus of clients moving to other firms or anything else of this nature.
One thing is certain: this is not the last promise from Jefferies that all is well.