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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 | 1853141 Killuminati
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66.6 billion... perfect number for the devils

Mon, 11/07/2011 - 11:46 | 1853187 Quinvarius
Quinvarius's picture

That is how they ask for help.

Mon, 11/07/2011 - 12:03 | 1853287 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 | 1853300 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

Mon, 11/07/2011 - 12:35 | 1853433 Cash_is_Trash
Cash_is_Trash's picture

Bilateral Netting, bicthezz

Mon, 11/07/2011 - 11:39 | 1853142 Ellesmere
Ellesmere's picture

Blow that Whistle !!

Mon, 11/07/2011 - 11:42 | 1853159 Killuminati
Killuminati's picture

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

Mon, 11/07/2011 - 11:51 | 1853205 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 | 1853213 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 | 1853256 Lord Blankcheck
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plus the SEC destroyed all the evidence

Tue, 11/08/2011 - 09:28 | 1856018 ToNYC
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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 | 1853161 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 | 1853162 Rubicon
Rubicon's picture

The dominoes are a wobbling!

Mon, 11/07/2011 - 11:43 | 1853163 trampstamp
trampstamp's picture

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

Mon, 11/07/2011 - 11:43 | 1853166 redpill
redpill's picture

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

Mon, 11/07/2011 - 11:51 | 1853218 john39
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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 | 1853167 GeneMarchbanks
GeneMarchbanks's picture

Egan Jones puttin' in work.

Mon, 11/07/2011 - 11:48 | 1853194 fuu
fuu's picture

We need an Egan Jones gang sign for flashing.

Tue, 11/08/2011 - 09:38 | 1856024 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 | 1853404 Scisco
Scisco's picture

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

Mon, 11/07/2011 - 11:43 | 1853169 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 | 1853173 Manthong
Manthong's picture

Precipitous PIIGS Pulled Pork?

Mon, 11/07/2011 - 11:46 | 1853182 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. 



Mon, 11/07/2011 - 11:50 | 1853203 kaiserhoff
kaiserhoff's picture

not she..., Der Vaterland...

Mon, 11/07/2011 - 12:13 | 1853330 Manipulism
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Das Vaterland...

Mon, 11/07/2011 - 12:38 | 1853449 Vergeltung
Vergeltung's picture

Die Vaterland?


Mon, 11/07/2011 - 12:43 | 1853473 cranky-old-geezer
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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 | 1853200 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 I mean someone to declare they have the um...

Headlines at the top of the hour. 

Mon, 11/07/2011 - 11:50 | 1853207 Zymurguy
Zymurguy's picture

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


Tick tock tick tock tick tock

Mon, 11/07/2011 - 12:48 | 1853520 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 | 1853581 Zymurguy
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Thanks slewie... I always like th pi-rat posts!!!  THANKS!!!

Mon, 11/07/2011 - 11:50 | 1853208 qussl3
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The ECB is running out of fingers yeah?

Tue, 11/08/2011 - 07:28 | 1855847 StychoKiller
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I still have a slide rule with exponential scales they can use...

Mon, 11/07/2011 - 11:53 | 1853227 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 | 1853229 topcallingtroll
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Keep the pressure on them Tyler.

Mon, 11/07/2011 - 11:54 | 1853233 pasttense
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Barclay's is a very large bank. How does this compare to its total capital?

Mon, 11/07/2011 - 12:00 | 1853269 Sudden Debt
Sudden Debt's picture

Capital =  Taxpayers money = Plenty to go arround

Mon, 11/07/2011 - 11:54 | 1853242 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 | 1853243 CrimsonAvenger
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Last bag holder - can it be BofA? I'd love to see them get a solid kick in the nuts here.

Mon, 11/07/2011 - 12:02 | 1853277 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 | 1853251 Dr. Engali
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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 | 1853258 partimer1
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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 | 1853263 Zola
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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 | 1853275 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 | 1853279 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 | 1853295 Seasmoke
Seasmoke's picture

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

Mon, 11/07/2011 - 12:05 | 1853296 romeplebian
romeplebian's picture

this is like watching the movie margin call all over again

Mon, 11/07/2011 - 12:08 | 1853302 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 | 1853303 glepo
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Mon, 11/07/2011 - 12:40 | 1853457 Vergeltung
Vergeltung's picture

excellent point.


Mon, 11/07/2011 - 12:11 | 1853316 EZT
EZT's picture

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

Mon, 11/07/2011 - 12:15 | 1853341 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 | 1853347 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 | 1853360 s2man
s2man's picture

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

Mon, 11/07/2011 - 12:29 | 1853395 Lord Peter Pipsqueak
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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 | 1853416 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 | 1853435 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 | 1853481 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 | 1853484 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 | 1853865 hannah
hannah's picture 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 | 1853900 Grand Supercycle
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Latest NASDAQ chart porn suggests fun times ahead:

Mon, 11/07/2011 - 14:14 | 1853941 mccoyspace
mccoyspace's picture

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

Mon, 11/07/2011 - 14:39 | 1854027 bugs_
bugs_'s picture

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

Mon, 11/07/2011 - 14:45 | 1854048 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 | 1855258 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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