Jefferies Re-Releases Statement

Tyler Durden's picture

Jefferies, which two days ago denied, denied, denied, has been forced to release another statement, 48 short hours later. As usual, the excuse used is the "Net exposure" is just $38 million compared to gross of $2.7 billion, a generic claim which was summarily debunked in our previous post.

NEW YORK & LONDON -- November 03, 2011

In response to information published today, Jefferies clarified information relating to its sovereign-debt positions and its interest-income expense.

To be clear, as of August 31, 2011, Jefferies had no meaningful net exposure to European sovereign debt. Recent reports and calculations appear to have been focusing only on long inventory of $2.684 billion but not taking into account the fact that there were offsetting short positions in such sovereign debt of $2.545 billion as well as offsetting positions in futures instruments.

It should be noted that, as of today’s opening of business, Jefferies’ net exposure to the sovereign debt of the nations of Portugal, Italy, Ireland, Greece, and Spain consisted of the following (rounded to the nearest million):

Portugal   $5 million

Ireland    $28 million

Italy      $104 million

Greece     $3 million

Spain      <$178 million>

That combined net short exposure of approximately $38 million equals approximately 1% of Jefferies’ shareholders’ equity, which as previously reported is not meaningful to Jefferies’ shareholder equity. As Jefferies has previously stated, to the extent Jefferies from time to time takes positions in such debt, they are short term in nature, are recorded in the trading book of Jefferies' regulated UK broker-dealer, are marked to market daily, and fluctuate depending upon customer demand, auction activity, and opportunities in the market place.

With respect to interest-income expense, Jefferies carries interest-earnings investments that turn over rapidly with its funding. As a result, Jefferies has had significant interest income in the past and should continue to have it in the future.

Jefferies Group, Inc. (NYSE: JEF) is the global investment banking firm focused on serving clients for nearly 50 years. The firm is a leader in providing insight, expertise and execution to investors, companies and governments, and provides a full range of investment banking, sales, trading, research and strategy across the spectrum of equities, fixed income and commodities, in the U.S., Europe and Asia.


Jefferies Group, Inc.
Peregrine C. Broadbent, 212-284-2338
Chief Financial Officer

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Godisanhftbot's picture

 I think some JEF shorts just bled from their wrecktums

ZippyBananaPants's picture

Wrecktum, hell, damn near killed him.

fuu's picture

Did that count as a flash crash?

gmrpeabody's picture

Man..., the CNBC crew are grilling the hell out of Egan Jones right now because of their downgrade.

STICK A FORK IN HIM..., already... Jeezo!

defn8Dog's picture

Look... valuable Primary Dealer with long, illustrious history, (okay not as long as Bear Stearno) just trying to put on some leverage to up the juice from the free money from the Fed and make some jing.  Got the holidays and bonuses coming!  What?

jayman21's picture

Wonder what the account rec at CNBC is for Jefferies?

Shitters_Full's picture

Sweet Jeebus, I love that punchline.  Thank you.

Bring the Gold's picture

Classic, total classic. Been funny since 1941 at least. Best read in gritty WW II officer voice.

Quinvarius's picture

Paper cuts from money out the wazoo.

Dr. Engali's picture

Correction: The weak shorts bled from their rectum.  Some of us are doing just fine.

DormRoom's picture

yeah, but what is there net off balance sheet exposure?


And how leveraged are they?  MF Global was leveraged 40:1. And alot of the risk was hidden off balance. insantity. 



clones2's picture

I think from the bond downgrade they were 12.7 to 1

JohnG's picture



Jeffries CEO is named Dick Handler (for realz).  Guess we know aht he's been doing.

Must be one tough bastard growing up with a name like that... 8D

Taterboy's picture

Lucky he lived next door to Mike Hunt.

High Plains Drifter's picture

he sold 2 million shares in september. that should have told someone something was coming.  he cut his teeth at drexel burnham lambert..........imagine that..........its the ali g show .................again and again.........

Flakmeister's picture

Are you fucking serious??

Mao's treatment of the banksters is looking better and better all the time...

Dapper Dan's picture

So he is a "friend of joe"  Joseph J. "Joe" Cassano, some call joe "Patient Zero"

Drexel Burnham Lambert, The school of Michael Milken.

AKA Michael Robert Milken

Born: 4-Jul-1946
Birthplace: Encino, CA

Gender: Male
Religion: Jewish
Race or Ethnicity: White
Sexual orientation: Straight but unkown after prison sentence.
Occupation: Business, Criminal

Nationality: United States
Executive summary: Convicted financial executive

Financial executive for Drexel Burnham Lambert, but indicted in 1989 for securities irregularities and racketeering. Went to prison for two years, but this has had little effect on his influence. Net worth $2.5B (Forbes 2007).

Father: Bernard Milken
Mother: Fern
Brother: Lowell
Sister: Joni Noah
Wife: Lori (m. circa 1969, three children)

High School: Birmingham High School, Van Nuys, CA
University: BA, University of California at Berkeley (summa cum laude)
University: MBA, Wharton School, University of Pennsylvania

Drexel Burnham Lambert
Milken Institute Chairman
Sigma Alpha Mu Fraternity
Phi Beta Kappa Society
World Technology Network
Ig Nobel Prize Economics (1991)
Insider Trading charges dropped
Mail Fraud charges dropped
Racketeering charges dropped
Securities Fraud pled guilty Apr-1990
Wire Fraud charges dropped
Risk Factors: Prostate Cancer, Vegetarian, Toupee

Mr_Wonderful's picture

I think he´s married to 

Anita Dick.

Gadfly's picture


Now MF Global Employees Are Ditching Work


“In the aftermath of MF Global's filing for bankruptcy protection Monday, many of the beleaguered broker-dealers' employees are no longer coming into the office, Reuters' Tara LaCapra reported.”



mrdenis's picture

I thought they have conviction ..     Oh that conviction 

decon's picture

Check out the spike in selling the 2nd week of April.  Think somebody knew something?

Godisanhftbot's picture

 lol, hey, you can still cover <12, no hard feelings

Godisanhftbot's picture

  Rumor some AM JEF shorts will be filing for bankruptcy

Biggvs's picture

So they give us the net for each country... how about the gross and composition of the netting? How much netting is CDS?

tarsubil's picture

Nah, it is better to just count money that isn't there. That way, you never go broke.

Libertarian777's picture

or count OPM (Other People's Money)... like client money...

XitSam's picture

Are they exposed to French and German banks?  Can they even make a factual determination on how exposed they are to PIIGS soverign debt?

Ancona's picture

Hahahaha to infinity.

I love the denials, then followed on by clarifications, more denials to be followed eventually by the truth.

Bring out your dead!!

Dr. Engali's picture

Denial is the first symptom of a problem.

SheepDog-One's picture

Public denial is proof its true.

larry david's picture

David Faber just told me it's all good, rally (ponzi) on bitchez!

LongSoupLine's picture




I'm expecting this from Bob PISSani:  "What's important here, is Goldman's European Division, the ECB, cut rates." 




I've said it before, but will repeat it here yet again, "Adding pretty frosting to a steaming pile of crap does NOT make it a cake"

mrholty's picture

You haven't had my Mother-in-Laws cooking then. 

1.  Step one.  Cook shit.

2.  Cover either in Gravy, syrup or frosting.

3.  Her own kids love it while the in-laws are eating cat turds to get the taste of "dinner" out of their mouth. 

Kayman's picture

Unless you're a dung beetle... er... Investment Banker...

Xtreeeme's picture

People know nothing! They know nothing! Jefferies is fine!!

Thisson's picture

"They're not even [within] 100 miles [of Baghdad]. They are not in any place. They hold no place in Iraq. This is an illusion ... they are trying to sell to the others an illusion."

"There are no American infidels in Baghdad. Never!"

"We have them surrounded in their tanks"



monopoly's picture

All good, glad to hear.

Now we have to advise ANF and RIG of that.

Guess we are not buying as many $150.00 jeans with holes in them.

Gene8696's picture

As I said yesterday...
Time to smoke a Jeffery, and stroke the furry wall...

bdc63's picture

"our leverage is comparable to our peers" ... uhm ... is that supposed to make me feel better?

bania's picture

the fringe blog strikes again!

JSD's picture

No basis risk there...none.

0cz's picture

Coming back up.  Bernanke flew over in the helicopter and sorted everything out.

Stuart's picture

OK, everybody, altogether now:  "JEFFERIES, LISTEN UP... WE DON'T BELIEVE YOU!!!  GET IT?"

nobusiness's picture

What if EU and Greece are not a credit event and CDS don't pay????  Where's that press release.  Reg FD was a joke.

Winterland's picture

I'm assuming they bought CDS. But if ISDA is unwilling to let the CDS trigger occur they aren't quite as hedged as it would seem.

drivenZ's picture

If they take the exchange deal(if it goes through) they write down their gross Greek debt exposure...If they dont, their CDS is still money good. The debt writedown if they so choose probably won't put them under anyways. 

gmrpeabody's picture

I know I'm a little thick, but why would anybody choose a haircut over accepting an insurance check?

I mean..., if they actually have a choice and all.


Stax Edwards's picture

Bear raid bitchez!

Markets getting hectic again.  Dow daily chart looking like something akin to a heart monitor today.