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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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Thu, 11/03/2011 - 10:20 | 1841154 Godisanhftbot
Godisanhftbot's picture

 I think some JEF shorts just bled from their wrecktums

Thu, 11/03/2011 - 10:27 | 1841203 ZippyBananaPants
ZippyBananaPants's picture

Wrecktum, hell, damn near killed him.

Thu, 11/03/2011 - 10:39 | 1841274 fuu
fuu's picture

Did that count as a flash crash?

Thu, 11/03/2011 - 11:04 | 1841463 gmrpeabody
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!

Thu, 11/03/2011 - 11:11 | 1841518 defn8Dog
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?

Thu, 11/03/2011 - 11:21 | 1841580 jayman21
jayman21's picture

Wonder what the account rec at CNBC is for Jefferies?

Thu, 11/03/2011 - 10:40 | 1841276 Shitters_Full
Shitters_Full's picture

Sweet Jeebus, I love that punchline.  Thank you.

Thu, 11/03/2011 - 10:51 | 1841346 Bring the Gold
Bring the Gold's picture

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

Thu, 11/03/2011 - 10:27 | 1841206 Quinvarius
Quinvarius's picture

Paper cuts from money out the wazoo.

Thu, 11/03/2011 - 10:29 | 1841220 Dr. Engali
Dr. Engali's picture

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

Thu, 11/03/2011 - 10:34 | 1841226 DormRoom
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. 



Thu, 11/03/2011 - 10:51 | 1841347 clones2
clones2's picture

I think from the bond downgrade they were 12.7 to 1

Thu, 11/03/2011 - 10:36 | 1841258 JohnG
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

Thu, 11/03/2011 - 10:38 | 1841265 Taterboy
Taterboy's picture

Lucky he lived next door to Mike Hunt.

Thu, 11/03/2011 - 10:40 | 1841282 High Plains Drifter
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.........

Thu, 11/03/2011 - 11:15 | 1841542 Flakmeister
Flakmeister's picture

Are you fucking serious??

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

Thu, 11/03/2011 - 11:28 | 1841574 Dapper Dan
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

Thu, 11/03/2011 - 12:53 | 1842072 Mr_Wonderful
Mr_Wonderful's picture

I think he´s married to 

Anita Dick.

Thu, 11/03/2011 - 10:40 | 1841283 Gadfly
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.”



Thu, 11/03/2011 - 10:53 | 1841351 mrdenis
mrdenis's picture

I thought they have conviction ..     Oh that conviction 

Thu, 11/03/2011 - 13:08 | 1842142 decon
decon's picture

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

Thu, 11/03/2011 - 15:08 | 1842721 Godisanhftbot
Godisanhftbot's picture

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

Thu, 11/03/2011 - 15:31 | 1842791 Godisanhftbot
Godisanhftbot's picture

  Rumor some AM JEF shorts will be filing for bankruptcy

Thu, 11/03/2011 - 10:22 | 1841172 Biggvs
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?

Thu, 11/03/2011 - 10:25 | 1841194 tarsubil
tarsubil's picture

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

Thu, 11/03/2011 - 11:10 | 1841514 Libertarian777
Libertarian777's picture

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

Thu, 11/03/2011 - 10:30 | 1841228 XitSam
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?

Thu, 11/03/2011 - 10:22 | 1841173 Ancona
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!!

Thu, 11/03/2011 - 10:22 | 1841174 Dr. Engali
Dr. Engali's picture

Denial is the first symptom of a problem.

Thu, 11/03/2011 - 10:34 | 1841251 SheepDog-One
SheepDog-One's picture

Public denial is proof its true.

Thu, 11/03/2011 - 10:22 | 1841178 larry david
larry david's picture

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

Thu, 11/03/2011 - 10:53 | 1841365 LongSoupLine
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"

Thu, 11/03/2011 - 11:10 | 1841515 mrholty
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. 

Thu, 11/03/2011 - 11:30 | 1841644 Kayman
Kayman's picture

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

Thu, 11/03/2011 - 10:23 | 1841181 transaccountin
transaccountin's picture

im sold

Thu, 11/03/2011 - 10:24 | 1841184 Xtreeeme
Xtreeeme's picture

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

Thu, 11/03/2011 - 11:25 | 1841607 Thisson
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"



Thu, 11/03/2011 - 10:24 | 1841185 monopoly
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.

Thu, 11/03/2011 - 10:24 | 1841186 Gene8696
Gene8696's picture

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

Thu, 11/03/2011 - 10:24 | 1841187 bdc63
bdc63's picture

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

Thu, 11/03/2011 - 10:24 | 1841190 bania
bania's picture

the fringe blog strikes again!

Thu, 11/03/2011 - 10:25 | 1841192 JSD
JSD's picture

No basis risk there...none.

Thu, 11/03/2011 - 10:25 | 1841193 0cz
0cz's picture

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

Thu, 11/03/2011 - 10:26 | 1841201 Stuart
Stuart's picture

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

Thu, 11/03/2011 - 10:26 | 1841202 nobusiness
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.

Thu, 11/03/2011 - 10:27 | 1841207 Winterland
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.

Thu, 11/03/2011 - 10:32 | 1841230 drivenZ
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. 

Thu, 11/03/2011 - 10:55 | 1841392 gmrpeabody
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.


Thu, 11/03/2011 - 10:28 | 1841213 Stax Edwards
Stax Edwards's picture

Bear raid bitchez!

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

Thu, 11/03/2011 - 10:56 | 1841403 gmrpeabody
gmrpeabody's picture

Flatline bitchez!

Thu, 11/03/2011 - 10:28 | 1841219 Belarusian Bull
Belarusian Bull's picture


Thu, 11/03/2011 - 10:29 | 1841222 Jim in MN
Jim in MN's picture

Here algos, factor this in:

Pirates hijack oil tanker off the coast of Nigeria according to an oil security source (RAN Squawk)
Thu, 11/03/2011 - 10:30 | 1841225 mess nonster
mess nonster's picture

Methinks Jeffries is a lying sack of shit. The trouble with being broke is you can't hide it forever. Maybe not even long enough to escape to Paraguay.

Thu, 11/03/2011 - 10:33 | 1841244 Godisanhftbot
Godisanhftbot's picture

 Wrong. There are folks posting here daily that are dead broke and they hide it fine.

Thu, 11/03/2011 - 10:39 | 1841273 disabledvet
disabledvet's picture

Yeah well we didn't blow a trillion dollars either. Let alone as we all now know just plain old steal it. Those are called "rich people" and "you are now dead."

Thu, 11/03/2011 - 10:30 | 1841227 kito
kito's picture

yeah jeffries, how is that net exposure working out for you when the defaults become "voluntary haircuts" and those "protective" cds dont get triggered, therefore failing to provide you insurance on the losses????? the only net exposure you have is the one that youre tangled up there a giant squid in there with you by any chance????

Thu, 11/03/2011 - 10:30 | 1841229 RSDallas
RSDallas's picture

Determine the counter party and you can determine the risk.  I say this assuming that they are masking a CDS trade as "being short". 

Thu, 11/03/2011 - 10:34 | 1841247 mccoyspace
mccoyspace's picture

Jefferies CFO: "Huh, I dunno, this really should be working......."

Thu, 11/03/2011 - 10:45 | 1841272 AccreditedEYE
AccreditedEYE's picture

Leucadia feeling the pain too... GREAT investment Joe, just GREAT! lol  (1 dead, 1 being led to the guillotine... it's a hard knock life when you ain't a systemically important bank holding company...)

Thu, 11/03/2011 - 10:40 | 1841280 Xtreeeme
Xtreeeme's picture

is it halted again??

Thu, 11/03/2011 - 10:42 | 1841286 RobotTrader
RobotTrader's picture

GS and MS still holding the 21-day EMA

Thu, 11/03/2011 - 10:48 | 1841299 SheepDog-One
SheepDog-One's picture

Gee what a valuable post Robo...what is it you think, none of us have live streaming marketwide quotes right in front of us?

Youre the Howard Cosell of the financial world, commenting like an expert with insight on things youve never actually done yourself.

Thu, 11/03/2011 - 11:23 | 1841592 kito
kito's picture

this just in from robo: water is still comprised of two parts hydrogen and one part oxygen.

Thu, 11/03/2011 - 10:44 | 1841292 Dr. No
Dr. No's picture

Let me know when Dick Bove issues his buy recommendation.

Thu, 11/03/2011 - 10:45 | 1841295 lizzy36
lizzy36's picture

When in doubt release a statement.

Then go on CNBC and read statement aloud.

Then have a one on one with david faber.

In between REPO 105, repo 105, repo 105.

Take about being perfectly hedged and low (repo 105) leverage ratio.


Thu, 11/03/2011 - 10:59 | 1841426 LongSoupLine
LongSoupLine's picture



Lizzy36, you forgot an important step:

Then "remind" CNBC how much money you pay them, and not to fuck-up a good "arrangment".  (read: MF Global owes CNBC $900+k)

Thu, 11/03/2011 - 10:45 | 1841297 equity_momo
equity_momo's picture

Someone try and short it , your broker wont be able to borrow stock. That means there is either a huge squeeze coming or all available borrow has been used up by the squid and the gang and jef is next on the morgue table. Little guys dont get a look in.

Thu, 11/03/2011 - 11:05 | 1841467 Godisanhftbot
Godisanhftbot's picture

More lies from the ignorant. I can short all I want, and you can buy putz too.

Try again, pardner.


Thu, 11/03/2011 - 11:07 | 1841485 equity_momo
equity_momo's picture

Must be my shitty broker. I did ask someone to try - so thx for trying.

Thu, 11/03/2011 - 10:46 | 1841300 Cthonic
Cthonic's picture

Cumming, Broadbent... is the outside auditor's surname something like Brokeback?

Thu, 11/03/2011 - 10:51 | 1841345 roymunnson
roymunnson's picture

Anybody else notice the massive ad campaign on left wing radio calling for a run on the banks this Friday?


I for one reallly really hate banks, but




If we are dealing with MF Global and JEffries and this bank run actually does some damage.....we got big problems and The bastard politicians and bankers will have a bullshit



Thu, 11/03/2011 - 10:54 | 1841377 Godisanhftbot
Godisanhftbot's picture

 Havn't heard it, but I'm in favor of arresting those that incite to riot.

 They want bank runs, but if you cut off their welfare, food stamp, disability scams, they crap their panties.




Thu, 11/03/2011 - 11:29 | 1841629 flattrader
flattrader's picture

>>> The bastard politicians and bankers will have a bullshit<<<

So they/you think they have a scapegoat.

Fuck 'em.

Vote with your wallet.  The only thing "they" pay attention to.

Thu, 11/03/2011 - 11:55 | 1841772 roymunnson
roymunnson's picture



watch what you wish for you just might get it



Thu, 11/03/2011 - 12:34 | 1841982 flattrader
flattrader's picture

Bring it on. Crash it.

If they try to lay the blame on the average Joe who gave the finger to banksters, it won't go down.

Oddly, many people in the past three years are waking up as to who is really to blame.

Thu, 11/03/2011 - 10:55 | 1841381 azzhatter
azzhatter's picture

Didn't they just copy the MF press release from last week who copied the press release from Lehman who copied the press release from Bear Stearns and on and on and on and on 

Thu, 11/03/2011 - 10:59 | 1841431 BennyBoy
BennyBoy's picture

Jefferies should go BK soon. Hardly worth having them as a PD.

Thu, 11/03/2011 - 11:00 | 1841436 c'mon man
c&#039;mon man's picture

CNBC hacks beating up Egan Jones rep for downgrade right now...

Thu, 11/03/2011 - 11:11 | 1841519 gmrpeabody
gmrpeabody's picture

And way too obvious about it!

Thu, 11/03/2011 - 11:05 | 1841471 Chappy
Chappy's picture

Just shorted 100 shares, was not a problem.  I expect a surge by the end of the day.  

Thu, 11/03/2011 - 11:09 | 1841497 ThirdCoastSurfer
ThirdCoastSurfer's picture

If $38m is 1% then $3.8b is 100% and $2.684b is roughly 96%.

So, if clients funds are essentially fully invested in the longs, what provides the funding for the $2.545b in shorts? 

Thu, 11/03/2011 - 11:13 | 1841532 Chappy
Chappy's picture

You are using the old math.  Funding as follows:

2.684b + magic leverage black box = funding for 2.545 shorts


Either that or it is an accounting error, no biggy

Thu, 11/03/2011 - 11:19 | 1841566 Analog Kid
Analog Kid's picture

I just want to say:

"Peregrine C. Broadbent"

That's all.

Thu, 11/03/2011 - 11:27 | 1841620 Piranhanoia
Piranhanoia's picture

Jefferies will make interest income in the future because it did in the past.  Even at -2% return,  We're that good!

and what was that about the execution of shareholders?

Thu, 11/03/2011 - 12:24 | 1841927 Eireann go Brach
Eireann go Brach's picture

Tyler, CNBC I think are trying to argue with you on this just released headline!

Jefferies: Low Net Exposure Across Euro Zone

Do NOT follow this link or you will be banned from the site!