Jefferies Releases Yet Another Set Of Numbers On Its European Exposure That Differ From 24 Hours Ago

Jefferies is out with its third consecutive promise it has done nothing wrong, issuing a press release in which it says "Jefferies has no meaningful credit risk in respect of the sovereign debt of these nations, and an insignificant risk related to interest rate movements" and hopes to slay the dragon of doubt once and for all. Furthermore as CEO Dick Handler adds, "Later today, after the markets are closed in Europe and we have completed our inventory control accounting, we will post on our web-site our day-end, CUSIP-level holdings in the securities of these countries. We care for our clients, shareholders, bondholders and employees and want to allay any concern that may have arisen. As was the case yesterday, the facts about our sovereign debt exposure and other matters are straightforward and easily understood. We encourage all market participants and interested parties to review our public filings that contain extensive disclosure of the nature, extent and financing of our assets. Our firm stands on a solid foundation of over $8.5 billion of long-term capital and we look forward to continued success." We congratulate this espousal of transparency and clairty. We are also 100% certain that Jefferies will be so kind to disclose not only the Cusips but the maturities and tenors of all synthetic products. It will of course also publicly highlight the dates of all transactions: the last thing the public will want to think is that Jefferies took advantage of the grace period of the past 2 days to neutralize its cash book sufficiently. Because one can't help but be curious what the reason for the material difference between the numbers posted as of yesterday and those posted today is, or rather, when the offsetting buys and sells took place.

From today's press release:

Positions stated in USD MM’s
      Long     Short     Net Cash     Futures     Net Total
Italy     2,086     (2,011)     75     (100)     (25)
Spain     191     (209)     (18)     -     (18)
Ireland     110     (80)     30     -     30
Portugal     20     (16)     4     -     4
Greece     -     -     -     -     -
Total     2,407     (2,316)     91     (100)     (9)


And from yesterday:

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>

for "combined net short exposure of approximately $38 million"



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