Whatever you’ve heard, whatever you’ve read, whatever you’ve seen, whatever you saw- lies, all lies, spread by a hedge fund that Jefco isn’t going to dignify with a name-check. Continue reading »
Jefferies
Berkshire Hathaway Is Too Big, Interconnected, Smart, Awesome For You To Worry About What It’s Up To
By Matt Levine
Two bits of news are out today at the high and low ends of what you could loosely call big financial institutions. At the low end, Jefferies, which I’ll stick with calling wee given its $40 billion balance sheet, is blasting out minute-by-minute, issuer-by-issuer, maturity-by-maturity, CUSIP-by-CUSIP accounts of its holdings of European sovereign bonds, its trading activity in those bonds, and the lunch orders of the traders trading those bonds. First it had no exposure – $2.4bn gross, $9mm net short notional, $37k of DV01, almost all cash with some futures – and then it had even less exposure, cutting gross exposure in half although apparently increasing net. The aggressive PR campaign seems to be working, with the stock basically where it was before anyone spent any time thinking about Jefferies, and up today in a down tape.
At the high end, Berkshire Hathaway, which is not entirely unlike a thinking man’s AIG and has a $385 billion balance sheet, disclosed Friday that it lost two billion dollars last quarter in mark-to-market on its $34 billion notional of short S&P index puts. Also Berkshire is ramping up single-name equity investments without telling anyone what they are.
One more thing about BRK/A that you may or may not find related is that it may or may not be a “non-bank G-SIFI,” that is, a financial institution that is not an FDIC insured bank but is nonetheless “too big to fail” because of its size and interrelationships:
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Let’s talk about Jefferies for a bit. Jefferies is a wee broker-dealer who briefly traded down 20% this morning though they got better. They have some problems that they like talking about because they aren’t really problems (being long $9mm of MF Global bonds), and some problems that they don’t like talking about because they’re maybe small deep holes and also kind of embarrassing (missing problems at MF Global repeatedly when underwriting and considering buying it).
Then there’s the problem that they have to talk about, even though it’s maybe not a problem, and it goes something like this. They have $2.7 billion gross long exposure to sovereign debt, or 77% of their book equity. That’s bad. They have $38 million net short exposure to PIIGS debt, or 1% of their book equity. That’s good.
There are about three things you can think about that information:
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Can Anyone Translate What A Person Familiar With The Matter Meant When He Said A Deutsche Bank Exec’s Jump To Jefferies Was An “Interesting Move”?
By Bess LevinSean George, a Deutsche Bank managing director in corporate bond and credit derivatives trading from Deutsche Bank recently accepted an offer to work at Jefferies, as the firm’s “first addition in credit derivatives trading.” A person familiar with the matter commented that Jefferies “must have thrown the kitchen sink at [George]” to get him to come over and that it was an “interesting move.” It feels as though this PFWTM wanted to say or meant to imply more, but couldn’t risk having it come back to him. What do you figure he was driving at?
Last January, analyst Jonathan Hollander’s name was mentioned as possibly having a connection to a Blackstone insider trading case, based on information presented to the government by his former employer, SAC Capital-owned CR Intrinsic. Not much has been heard about Hollander since then, but this morning Reuters‘ Matthew Goldstein reports that he’s actually in the super fun position of waiting to find out if federal authorities still have a problem with him.
One individual sitting on the prosecutorial bubble is former SAC Capital Advisors analyst Jonathan Hollander, who last worked for Steven Cohen’s $12 billion hedge fund in November 2008. Federal authorities have linked Hollander to several allegations of insider trading in both court filings and testimony at a recent criminal trial, but he has not been charged with any wrongdoing. Reuters has learned that prosecutors disclosed for the first time in August that they had taken at least two confidential statements from Hollander at some point over the previous 18 months.
Prosecutors disclosed the Hollander “proffer statements” in an August 25 letter to lawyers for former Jefferies Group Inc hedge fund manager Joseph Contorinis, who was convicted by a federal jury of insider trading in October.
Traders Who Commute Psyched For Opportunity To Spend The Night In The City, Momentary Respite From The Old Ball And Chain
By Bess LevinBloomberg reports that not everyone is freaking out over the prospect of a little more snow and are in fact keeping fingers crossed they’ll be forced to tell the wife/husband they’re stranded for the night. ‘Cause that’s when the real party* gets started.
Weather advisories calling for as much as 20 inches of snow prompted firms such as New York-based Jefferies & Co. to reserve hotel rooms in Manhattan as a precaution if employees can’t make their usual commutes. That’s good news to traders who welcome an evening at the pubs.
“Bars and restaurants are the beneficiaries of the blizzards,” said Doreen Mogavero, president and chief executive officer of Mogavero Lee & Co., a brokerage located on Broad Street in Manhattan. She plans to stay in the city tonight. “We always manage to make the best of it and have a good time — good friends, some dinner and a glass of wine in a gorgeous blizzard.”
*One night each year they get off from the nagging wife/fat husband and screaming children.
Rice Student Thinks Jefferies Is “More Courteous” Than Its Counterparts And Has “The Best Corporate Culture In Town”
By Bess LevinAnd she’s sorry she missed her interview with the rainmakers and hopes they’ll be able to find it in their hearts to forgive her. Because they’re not like those other banks. They’re different.
From: [redacted at Rice]
Sent: Thursday, February 04, 2010 9:22 AM
To: [redacted at Jefferies]
Subject: Interviewee
To Whom It May Concern:
I would like to sincerely apologize for not attending the interview I had scheduled with Jefferies & Company on Rice campus. I would also like to thank you for informing the CSPD, so as to keep me accountable for my selfish and careless actions. While I cannot take back time and no excuse suffices to rectify this great wronging, I would like to offer a brief explanation of my lack of attendance in hope that you will forgive me.
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