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Of note concerning Jefferies (JEF -11.9%) is a downgrade by Egan-Jones noting $2.7B of...

Of note concerning Jefferies (JEF -11.9%) is a downgrade by Egan-Jones noting $2.7B of "sovereign obligations" - equal to 77% of shareholders equity. The agency would prefer a lower leverage ratio than the current 12.9:1, though noting it's not in the same ballpark as MF Global's (MF) 40:1.
Comments (5)
  • buybuybear
    , contributor
    Comments (389) | Send Message
     
    Halting a stock is like locking a door of a house on fire.
    3 Nov 2011, 10:17 AM Reply Like
  • Stone Fox Capital
    , contributor
    Comments (5915) | Send Message
     
    still amazing that the market focuses on the total amount instead of the realistic loss possibility. Debt that pays out isn't a loss no matter how weak the country appears to be.
    3 Nov 2011, 10:20 AM Reply Like
  • wyostocks
    , contributor
    Comments (7703) | Send Message
     
    Jefferies was the underwriter of MF's bond offering this past August and will face many legal suits concerning those bonds.
    This seems to me to be a bigger threat to them.
    3 Nov 2011, 10:21 AM Reply Like
  • Blackbeard
    , contributor
    Comments (97) | Send Message
     
    Leucadia (LUK) is moving alongside Jeffries as it owns a substantial amoung of Jeffries shares.
    3 Nov 2011, 10:22 AM Reply Like
  • Ted Bear
    , contributor
    Comments (584) | Send Message
     
    It is prudent to look at both sides of the equation...longs, and shorts.

     

    Yes, the Net is small, but if in the end, one of the counterparties will be unable to perform.....let's say that MF wrote you a CDS for the short....yes, theoretically you have net zero exposure, but practically your short side is worthless, and you are only long.

     

    That's where it all ends...and why the regulators allowed the financial institutions to move the derivatives off balance sheet. Hence, you get the 'great today', 'gone tomorrow' situation with shops like MF global.
    3 Nov 2011, 10:27 AM Reply Like
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