Tuesday, November 22, 2011

Update On Jefferies

The SilverDoctors blog was the first place I saw this story (god knows I don't watch Fox Business - not sure who does).  It turns out that apparently Jefferies CEO is looking for a large white-knight firm to take them over.  Translation:  "our balance sheet is hopelessly insolvent unless we get bailed out and I still might be able to sucker a big bank to buy our firm while the stock still has value to insiders who own a lot."  Here's the LINK  I would initiate an account transfer out of there tomorrow if I had money at Jefferies...

To be quite frank, I'm not sure why Jefferies would be of value to any buyer.  I firmly believe that on a market-to-truth basis that Jefferies has a substantial net worth.  The brokerage and investment banking model can be replicated anywhere.  The asset management business and banker relationships probably have good value on a stand-alone basis, but they are entwined in the roach motel that is Jefferies balance sheet and who knows what other hidden and contingent liabilities are lurking off-balance-sheet and "in the closet."   The asset management business can be plucked out of bankruptcy and the bankers who have valuable relationships will go to the highest bid from other firms...


  1. Off-topic:
    Quick comment from Janszen...
    Video: EJ Quick Comment

  2. Your childishly snide remarks about anything related to right-wing media or politics is really embarrassing anymore.

  3. What's snide about being truthful and non biased?

    I've been coming to this site for a long time and while I don't always agree with every idea on the blog...Dave usually punches with both hands...left and right...but sometimes readers are so punch drunk with their ideologies they can't see the TRUTH!(see top of page)

    Happy Thanksgiving!


  4. Just remember before long that turkey you're eating on the table tomorrow could be each of us before long...gobble,gobble!

    Court Closed Door To MF Glob Customers, Future Theft Timeline Strategy

    The Court Closed the Door To MF Global Customers. What happens behind closed doors is obvious. There is a timeline which the major players are following to close the door to "Fraud." The word Fraud would open the door for customer recourse at the cost of a large swatch of the derivatives market.


  5. (Dave)

    Always good to have differing opinions - it's what makes markets. What I was referring to is the fact that Fox Business - last time I saw the market poll on it - had less than 10,000 viewers nationwide at any given time.

    Having said that, cable news is appallingly pathetic, whether its CNBC, Bloomber, Fox, CNN or MSNBC. People who rely on those sources for their news are lazy and like to engage in mental masturbation.

  6. How's this going to be covered?

    More Moral Hazard on the way

    brought to us courtesy of senators Kay Hagan of North Carolina and one of the banking lobby's most obedient lap dogs, Bob Corker of Tennessee;
    The United States Covered Bond Act of 2011 is designed to allow bundling of any kind of debt including derivatives, into marketable securities guaranteed at full face value by the FDIC.


  7. Who Will Bail Out the Fed?

    November 23 (King World News) - From Occupy Wall Street to the halls of Congress there is anger at bailouts orchestrated by the U.S. Federal Reserve. These bailouts have not been limited to banks but include brokers, money market funds and foreign corporations. The Fed has released details grudgingly and some disclosures were forced by the Dodd-Frank legislation. Gradually the bailouts have been revealed as if a veil were slowly being drawn to display a densely formed mosaic. The bailouts have enriched stockholders, bondholders and CEO’s while unemployment remains at depression levels and forty-six million Americans survive on food stamps.


  8. They need these big #'s to cover every crime they all committed or partook in...notice always the same players, same names...unreal!

    Sarkozy: Europe's "Liquidity Run" Has Begun Because There Is An Unsolvable $30 Trillion Problem

    No, not that Sarkozy. His half-brother - the one who actually can use a calculator. In an interview on CNBC, the Carlyle group head had the temerity to tell the truth, the whole truth, and use math - that long-forgotten concept which one has to scour various backwater blogs to rediscover - to explain nothing but the truth which is that Europe needs many more trillions than either the EFSF or the ECB can afford to give.

    In Europe, that $3 trillion is $30 trillion. so if you multiply the $212 by 10, you get the $2.12 trillion. In my view, the issues on the European banks are bigger than the issues on the books of the US Banks. So if you want to stabilize that $30 trillion and in my view it's not that you want to, it's that you have to, you do not have a choice, you're going to have to be at least at 2.1 trillion and i suspect it may need to be more." Q.E.D. - there, the math wasn't that difficult, was it?


  9. compared to $ rally golds holding up rather well...

    Mint raises $600-million in gold fund IPO

    The Mint issued exchange-traded receipts that offered the buyers direct beneficial ownership of gold with no intermediaries, such as an asset manager or counterparty. The ETRs will be listed on the Toronto Stock Exchange in Canadian and U.S. dollars.


  10. i understand the gld slv paper trade isnt prudent going forward but what about silver mining shares? safe or not safe?

  11. (Dave)

    Depends on the silver mining shares. Ultimately all paper will be very risky, including shares. Best to have about a year's worth of gold/silver in your actual possession. If you think our system won't collapse for a few years, the shares are a good way to try and make more fiat paper that you then convert into metal.

    I like HL, FSM, AG, and SLW in the large cap silver universe. I like Wildcat Silver in the junior realm. And AUMN