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From MF Global To Jefferies To... Barclays?

Tyler Durden's picture





 

Earlier today, Jefferies made it all too clear that anyone found holding any PIIGS sovereign debt exposure, net AND gross, will be promptly punished by the market all the way down to the circuit breaker halt, until such party promptly offloads its GROSS exposure to some other greater fool, in the process gutting its entire flow trading desk. Courtesy of Bloomberg we may now know who the market will focus its attention on next: "Barclays has $12.5 billion sovereign risk, $20.1 billion of risk to corporations and another $10.2 billion to financial institutions. It also has $66.6 billion of exposure in its retail business, 86% of which is to Spain and Italy. Group and corporate-level risk mitigation (sovereign CDS, total return swaps) may reduce these exposures." Or, as the Jefferies case study demonstrated so vividly, it may not, and the only option will now be for Barclays to post daily releases with CUSIP breakdowns which will achieve nothing until Barclays follows in Jefferies footsteps and liquidates (at what is likely a substantial loss) all or at least half of its gross exposure. Thank you Egan Jones for starting a hot-potato avalanche that will keep banks honest. And woe to the last PIIGS sovereign debt bagholder.

 


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Mon, 11/07/2011 - 11:39 | Link to Comment Killuminati
Killuminati's picture

66.6 billion... perfect number for the devils

Mon, 11/07/2011 - 11:46 | Link to Comment Quinvarius
Quinvarius's picture

That is how they ask for help.

Mon, 11/07/2011 - 12:03 | Link to Comment eisley79
eisley79's picture

Gotta peg their debt to all currencies in order to maintain their 66.6 Billion perfection....

Mon, 11/07/2011 - 12:10 | Link to Comment Hard1
Hard1's picture

Woe to you oh BACR and JEF  for the devil sends the PIIGS with wrath because he knows the time is short.

Let him who have understanding reckon the exposure of the PIIGS... for it is a human number.  This number is 66.6

http://www.youtube.com/watch?v=jsmcDLDw9iw&ob=av3n

Mon, 11/07/2011 - 12:35 | Link to Comment Cash_is_Trash
Cash_is_Trash's picture

Bilateral Netting, bicthezz

Mon, 11/07/2011 - 11:39 | Link to Comment Ellesmere
Ellesmere's picture

Blow that Whistle !!

Mon, 11/07/2011 - 11:42 | Link to Comment Killuminati
Killuminati's picture

911 was an inside job you bitch motherfuckers look at all the insider transactions.  

Mon, 11/07/2011 - 11:51 | Link to Comment Sudden Debt
Sudden Debt's picture

To bad the Freedom tower isn't ready yet.... this crisis could have been solved so easy...

it wouldn't have taken anymore than 2 to 3 loaded planes...

Mon, 11/07/2011 - 11:51 | Link to Comment Comay Mierda
Comay Mierda's picture

what are you talking about? the $40 billion profit from put options placed on airline and insurance company stocks on 9/7/01 was pure coincidence. no need for the 9/11 commission to investigate that

Mon, 11/07/2011 - 11:57 | Link to Comment Lord Blankcheck
Lord Blankcheck's picture

plus the SEC destroyed all the evidence

Tue, 11/08/2011 - 09:28 | Link to Comment ToNYC
ToNYC's picture

neither Deutsche Bank  nor Mayo Shattuck had much to say about their client, who may have had wahhabi on their sushi.

Mon, 11/07/2011 - 11:42 | Link to Comment oogs66
oogs66's picture

now we can move to the big boys!  get your MS CDS while it is still cheap :)

Mon, 11/07/2011 - 11:42 | Link to Comment Rubicon
Rubicon's picture

The dominoes are a wobbling!

Mon, 11/07/2011 - 11:43 | Link to Comment trampstamp
trampstamp's picture

Banksters selling? Question is who is buying the crap. Beeno?

Mon, 11/07/2011 - 11:43 | Link to Comment redpill
redpill's picture

Something is rotten in the state of Denmark, er global banking system.

Mon, 11/07/2011 - 11:47 | Link to Comment GeneMarchbanks
Mon, 11/07/2011 - 11:51 | Link to Comment john39
john39's picture

rotten since the beginning.  just now starting to smell badly enough for a critical mass of people to notice it.

Mon, 11/07/2011 - 11:43 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

Egan Jones puttin' in work.

Mon, 11/07/2011 - 11:48 | Link to Comment fuu
fuu's picture

We need an Egan Jones gang sign for flashing.

Tue, 11/08/2011 - 09:38 | Link to Comment ToNYC
ToNYC's picture

Barry Knapp knew all the cash flows, but the audience left the party with Sean Egan. So mid-size brokerages, who can get stuck at any moment in MF Globalcluster f*ck frozen tundra, don't get love at this point in the cycle. Fewer players with an old-school (since 1848 CBOT beginning) sense of ethics and basic fairness care to play by the new rules. Repeat: mathematics doesn't lie, people do.

 

Mon, 11/07/2011 - 12:29 | Link to Comment Scisco
Scisco's picture

Wonder when they will get formally investigated by the SEC for said work.

Mon, 11/07/2011 - 11:43 | Link to Comment Ancona
Ancona's picture

Thyey're all liars.

Liar liar pants on fire!

This will all end very badly. We will watch as columns of smoke rise up over the ruins of our fianncial system when it's all done. These motherfuckers aree playing with the financial well being of the entire planet, all to scrape a nickle off here and there.

Financial fucking terrorists, every single one of them.

Mon, 11/07/2011 - 11:44 | Link to Comment Manthong
Manthong's picture

Precipitous PIIGS Pulled Pork?

Mon, 11/07/2011 - 11:46 | Link to Comment DormRoom
DormRoom's picture

This is nuts..  ECB is absorbing all the bad debt from European spaghetti architecture  and Germany will be on the hook for it all.  Once again, the plutocracy socializes risk, and privatizes profits.

 

The last time GErmany was broke(n), she lashed out. 

 

#occupywallstreet.

Mon, 11/07/2011 - 11:50 | Link to Comment kaiserhoff
kaiserhoff's picture

not she..., Der Vaterland...

Mon, 11/07/2011 - 12:13 | Link to Comment Manipulism
Manipulism's picture

Das Vaterland...

Mon, 11/07/2011 - 12:38 | Link to Comment Vergeltung
Vergeltung's picture

Die Vaterland?

 

Mon, 11/07/2011 - 12:43 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture

 

 

I rather doubt Germany will be on the hook for all this stuff.  Germany will leave the EU.  It's in the works now.

Mon, 11/07/2011 - 11:49 | Link to Comment JPM Hater001
JPM Hater001's picture

This just in: World Domino Championship, er global ponzi scheme, hits snag as Oklahoma, er New York, is rocked by 1000 quakes.

House of Cards competition, er um Europe, braces for win...er I mean someone to declare they have the biggest...er um...

Headlines at the top of the hour. 

Mon, 11/07/2011 - 11:50 | Link to Comment Zymurguy
Zymurguy's picture

Tyler... any word on the SuperCONgress progress on our debt issues?

 

http://usadebtclock.com/

 

Tick tock tick tock tick tock

Mon, 11/07/2011 - 12:48 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

he addressed this earlier:  nope

he'll post stuff as he gets it, i'm sure, Z_guy

Mon, 11/07/2011 - 12:58 | Link to Comment Zymurguy
Zymurguy's picture

Thanks slewie... I always like th pi-rat posts!!!  THANKS!!!

Mon, 11/07/2011 - 11:50 | Link to Comment qussl3
qussl3's picture

The ECB is running out of fingers yeah?

Tue, 11/08/2011 - 07:28 | Link to Comment StychoKiller
StychoKiller's picture

I still have a slide rule with exponential scales they can use...

Mon, 11/07/2011 - 11:53 | Link to Comment Mohan
Mohan's picture

Jefferies actions are so bizzare and defy all logic. If I have to speculate, why they are acting so erratic - the two main reasons could be:

1) clients are fleeing

2) they rely heavily on short-term financing. Just like Bear and Lehman, the spigots have been stopped.

Again - pure speculation on my part.

Mon, 11/07/2011 - 11:53 | Link to Comment topcallingtroll
topcallingtroll's picture

Keep the pressure on them Tyler.

Mon, 11/07/2011 - 11:54 | Link to Comment pasttense
pasttense's picture

Barclay's is a very large bank. How does this compare to its total capital?

Mon, 11/07/2011 - 12:00 | Link to Comment Sudden Debt
Sudden Debt's picture

Capital =  Taxpayers money = Plenty to go arround

Mon, 11/07/2011 - 11:54 | Link to Comment Another Texan
Another Texan's picture

Correct me if I'm wrong, but if Jefferies is #2 in the line on this margin call on sovereign debt, the punishment will just get worse further down the line.  If Jefferies takes a hit at say $.70 on the $ to off load debt further helping the write down, this could slow the tide building, right?  If banks are forced to settle this debt at reduction in principal you must have a buyer!!  Jefferies is backstopped by the FED,  Correct???

Mon, 11/07/2011 - 11:55 | Link to Comment CrimsonAvenger
CrimsonAvenger's picture

Last bag holder - can it be BofA? I'd love to see them get a solid kick in the nuts here.

https://www.youtube.com/watch?v=fjd63o0sbio

Mon, 11/07/2011 - 12:02 | Link to Comment redpill
redpill's picture

If BofA is a bagholder, they won't be the last, the feds will bail them out in a heartbeat, endlessly.  So ultimately the last bag holder will always be the US citizen.  I don't think that reality has dawned on most people yet.  People talking trash about the Eurozone, do they not realize the US-funded IMF is eventually going to be involved and be the supreme backstop for the entire western world?

Mon, 11/07/2011 - 11:57 | Link to Comment Dr. Engali
Dr. Engali's picture

So many bankers playing hot potato and hide the debt. I wonder who will be the first big one to fall.

Mon, 11/07/2011 - 11:57 | Link to Comment partimer1
partimer1's picture

For those who manage other peoples money, and cannot beat the Bridgewater's performance, READ the Ray Dalio's comment, and re-read it, and re-read it.   Dalio's comment has all you need to know about all these nonsenses flying at your face.

 

Mon, 11/07/2011 - 11:59 | Link to Comment Zola
Zola's picture

Correction:

which will achieve nothing until Barclays follows in Jefferies footsteps and liquidates- (delete the rest)

Time for Barclays to go. They add no value and think they are hotshots. Quite pathetic actually.

Mon, 11/07/2011 - 12:08 | Link to Comment LouisDega
LouisDega's picture

Leave Barclays alone. They are my friends. They loaned me lotsa moola for my 2 Macbook pros interest free. What they do in their spare time does not concern me. Thanks Barclays. Its a pleasure doing business with you.

Mon, 11/07/2011 - 12:02 | Link to Comment Zap Brannigan
Zap Brannigan's picture

So what do we think will give first? Will nations be declared in default, triggering CDS' but starting the dominoes... or will "voluntary" actions not trigger CDS, and financial institutions lose big??

 

I'm thinking defaults will occur; the big boys always seem to get their way

Mon, 11/07/2011 - 12:05 | Link to Comment Seasmoke
Seasmoke's picture

the music is slowing down, where are the chairs ???

Mon, 11/07/2011 - 12:05 | Link to Comment romeplebian
romeplebian's picture

this is like watching the movie margin call all over again

Mon, 11/07/2011 - 12:08 | Link to Comment YesWeKahn
YesWeKahn's picture

When you have an idiot FED chairman and a mafia ECB chairman, there is no worry. They will print until problems are solved. Btween zinbabwe's great economy "boom" and USA great depression, you choose. BernankDickHead already chose one for you.

Mon, 11/07/2011 - 12:08 | Link to Comment glepo
glepo's picture

Mon, 11/07/2011 - 12:40 | Link to Comment Vergeltung
Vergeltung's picture

excellent point.

 

Mon, 11/07/2011 - 12:11 | Link to Comment EZT
EZT's picture

Is it too much to hope fore a downgrade today..

Mon, 11/07/2011 - 12:15 | Link to Comment The Deleuzian
The Deleuzian's picture

We're sure to see who Bernanke's friends are...and yes those who aren't...

Mon, 11/07/2011 - 12:16 | Link to Comment RiskAverseAlertBlog
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Why "woe to the last PIIGS sovereign debt bagholder?" Won't this be the likely "winner" most able to impose that hot new brand of neo-fascism called "governance" with the military backing of those poliitically dysfunctional bastions of fraud and swindle today called the United States and the United Kingdom?

Mon, 11/07/2011 - 12:18 | Link to Comment s2man
s2man's picture

According to European Banking Authority, Barclays has 20.3 billion euros (27.9 billion USD) in sovereign debt:

http://www.gordontlong.com/Tipping_Points-2011-Q4/11-07-11-EU-BANKS-Toxi...

Mon, 11/07/2011 - 12:29 | Link to Comment Lord Peter Pipsqueak
Lord Peter Pipsqueak's picture

Tyler said to them, "Go!" They came out, and went into the herd of PIIGS: and behold, the whole herd of PIIGS rushed down the cliff into the sea, and died in the water.

To answer pasttense, today, Barclay's market cap is £21.4bn, around $34.25bn,so in relation its potential sovereign and other losses on its debt it is a wee bit vulnerable to any haircuts.  

Mon, 11/07/2011 - 12:32 | Link to Comment jmcadg
jmcadg's picture

This might sound bad for Barclays now, but better being Primary Dealer 3 of 20 than 20 of 20.

Sadly I would like to see them as no. 20. I would love to wipe the smug grin of the sack of shit that is Bob Diamond.

That motherfucker is the UKs Jamie Dimon.  Mmm they seem almost related!!!! Banking incest.

Banzai can you knock this one up for me?

Mon, 11/07/2011 - 12:35 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

the banksters may need medical attention, or at least an IV

they're blowing liquiditiy outa their asses and projectile vomiting the bad paper they've been consuming in giant reams...

...speaking of giant reams...

...fuk the banksters & let them fail, BiCheZ!

Mon, 11/07/2011 - 12:43 | Link to Comment riley martini
riley martini's picture

 Berkshires derivatives lost 23% of their value in the last quater . Ignored by the corp. media .

Mon, 11/07/2011 - 12:44 | Link to Comment Greater Fool
Greater Fool's picture

Mmm, those EUR sovs starting to look tasty. Might have to move some US equity BTFD proceeds over there soon. Certainly after the next episode of the "crisis."

Mon, 11/07/2011 - 13:55 | Link to Comment hannah
hannah's picture

...so the banks just move this sh%t off-balance sheet and 'it is gone'....!.....why do we even fool with this kinda PR BS at this point...?

Mon, 11/07/2011 - 14:03 | Link to Comment Grand Supercycle
Grand Supercycle's picture

Latest NASDAQ chart porn suggests fun times ahead:

http://stockmarket618.files.wordpress.com/2011/11/2011-11-05_nas-8_x.png

Mon, 11/07/2011 - 14:14 | Link to Comment mccoyspace
mccoyspace's picture

won't the last PIIGS sovereign debt bagholder be the ECB and the FED?

Mon, 11/07/2011 - 14:39 | Link to Comment bugs_
bugs_'s picture

had that feeling about barclays - could barclays be in worse shape than BAC?

Mon, 11/07/2011 - 14:45 | Link to Comment Bastiat
Bastiat's picture

Friend of mine who's a farmer (a legit. user of futures) just told me his cash is frozen at Jeffries.  No positions open--now he just waits for the Trustee.

Mon, 11/07/2011 - 21:28 | Link to Comment Buck Johnson
Buck Johnson's picture

I totally agree, what fool is buying the other fools problems.  Either they are getting threatened by the govt. of the US to take these or they are being threatened by the major banks to take these and promised that they will back them up ala a gentlemens agreement.  Sooner or later the game will be shown that it's a farce and everyone will be running for the last few lifeboats. 

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