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FBN's Charlie Gasparino reports on Jefferies CEO Richard Handler weighing his options on whether the firm can remain independent.
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-- not -- it's a short time ago Charlie Gasparino broke the latest news.
On embattled brokerage company Jefferies Charlie is joining us on the phone right now he's got much more on this Charlie.
You know that is what we hear that essentially what we reported earlier today that's.
-- -- -- -- -- He's clearly out bear looking -- advised statement is Richard and where you get his name right circuit.
It out there are you know clearly weighing his options to those options.
Include primarily where the Jefferies can stay as an independent firm we should point out that I.
We spoke with people data analysts approach -- securities what he says is that if they had their druthers they want this stage.
As an independent firm but you know the market is moving away from -- what does that mean.
I'm much -- that they have toxic assets like MF global but they have a business model at this midsize firms every -- -- short term short term financing.
-- to handle trades.
That the market is pretty negative on right now -- -- are pretty negative on.
And it did have a right that was -- -- so negative.
Whether he should sell out the question is -- sell to there's lots of talk out there about potential Canadian acquisition Canadian banks have a lot to capital.
And -- may be able to buy other people say might just merged.
But it asset manager at a change the business model little bit that -- but what biggest kind of becoming clear.
-- have to do something.
You know he -- again -- -- -- -- report today that they need to raise capital that the bet that investors are sour on this business model get the business model.
Is not that -- invested in bad stuff I think he's kind of -- those.
Questions to rest with some interest -- disclosure -- along the lines or what we're reported last week they came -- said they've reduced their European exposure they've shored up to.
Too -- to credit -- you -- it.
Our but the -- that the business model is the notion that it's a midsize banks.
Which is a certain amount of capital and based other business -- they take risks in the market they are leverage twelve -- one.
As the -- as opposed to smaller firms.
For example elected I guess people necklace that relies on brokerage that's -- much less 2213.
Don't want.
So that's where he is right now.
-- basically look at that possibly merging to selling doing something that changes the business model.
Obviously -- by -- -- find out exactly what's going god who they're doing this with.
You know I I will go on the I would but I will say this I don't know yet to do it immediately.
But what is clear when he -- -- investment bankers.
That that -- the firm that no handler they'll tell you this Jeffrey in its current form will not be here two years and out this will be.
It is sold or merged or a completely different -- at and it's basically because the market is selling on the business spot.
You know Charlie I'm sure that the -- The deck on Wall Street would just say -- a case seen from the midwest or something for thinking this but.
Let -- flirted with for California and and earlier you know I don't -- leveraged forty to one leverage twelve to one wind will these people leverage -- You know this the bottom line is that these are businesses that rely on financing yeah.
You can't.
You can't help but the question is you know how do you finance yourself in what way.
You know I really believe that it you know listen.
And that's global had a real issue right I mean there's no doubt that people lost money that we hear that amount of money that's being -- the -- -- double -- about.
But it's -- impact on the market was muted because it was more.
And and -- yes it was -- is leveraged 31 but you know what.
It blew up and life goes on you know I don't break my heart goes out the people that have money in the accounts but the reality this systemic risk of like a Lehman Brothers.
Was not there and I think we really do have to come to terms about you rate as well I think it'll happen after the elections.
That -- come to terms -- do we want this -- model that we have now.
Citigroup should Citigroup be able to exist as both the securities firm.
At a bank.
Right where you have to hold all these all this sort of capital -- they can't -- they can't lend money with the kids do what we think the big profits by -- smaller firms blow up.
Well it doesn't have that -- of it is that that they get built part of the market well.
-- it should be that everybody -- are allowed to fail at this point after the lesson we hope we want right.
It but tell you can't you can't let a big banks fail and nowhere else to be you know -- -- the markets -- it's a real problem.
Charlie thank you very much hope that you got -- I'd rather have you here instead of on the phone parent.
See if you can work something -- that you see from Beverly Hills.
That's what I don't think that's probably a typical places Atlantic end of -- of anything I say hi there.
Charlie thank you.
