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FBN’s Charlie Gasparino on Jefferies agreeing to sell itself to Leucadia for $2.76 billion, and the greater implications this has for the financial ...
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SA BT Jefferies announced today that it has merged with conglomerate Leucadia device every child it's -- -- that I would say that's what you're after Fox Business first reported that the firm was shopping for a buyer what does that say about the future of the banking business Charlie Gasparino.
Parity reveal -- next to mean he has the latest.
Unraveling what's happening today and also I want to -- At least address what's -- -- to New York Stock Exchange and we'll get into the -- thing it's kind of agency 216 stocks have been halted for trading for the past three plus hours.
The pretty big name CVS Caremark united health.
Travelers what we have -- New York Stock Exchange moving to a new trading system.
It's it's I'm not gonna get too much into -- here -- as they moved to this new trading system.
They they basically have a technical glitch those stocks though can -- -- are trading at other exchanges.
That's the beauty but we have now -- when you do have.
Sort of competition among among various exchanges including -- trading -- of Goldman Sachs those stocks can trade was not like if you old.
The hold CDS -- can't sell it you can sell and obviously people are selling its found.
A little bit today similar to others so -- -- I just -- address that just in case.
Anybody heard that they can't sell their shares they can itself is conducive sorry action -- -- the problems and I don't know everything and it worked relative in the works -- -- orbit so it.
-- that they called embarrassing internally at the stock exchange but it's going to be fixed guaranteed but it's pretty embarrassing anyways announced go to Jefferies which I think is a fascinating story if you remember last year this time MF global blew up right.
Right after MF global blew up there was a there was a report in Egan Jones but I report about Jeffries said that Jefferies held some of the same exposure.
To soured the European debt is MF global and -- -- wrong on MF are now Jefferies denies that.
Jefferies put out a lot of Russert ashtrays there was a run on -- -- denied that they put a lot of research saint shown that they have.
You know all this sort of they have this whole thing hedged and you know they're not like MF global and -- want to have global is its own story nothing to be as bad as that.
Shares recovered a little -- here's what we report at the time.
They saw the writing on the -- about their future.
And they began at that point a very slow process as you know took a year.
Essentially sell themselves and they found the buyer lot concluded -- Canadian bank it's this conglomerate -- -- Acadia.
Which of people describe as a mini Berkshire it's a bunch of different investments now they have a merger with them.
Now what does that mean for banking and his -- I think this says something.
About what's gonna go forward I don't think midsize firms can survive in this environment.
This is an environment that under Dodd-Frank and Basil three and just the market sentiment that demands capital.
And firms like Jeffrey stepped in trading -- not pure that I like a brokerage firm right that do trading.
They're gonna have issues what does this mean for the big Wall Street -- so if you look.
I think the small -- the Wall Street firms it's Morgan Stanley and this is a fit a from the watch I can tell -- I really respect James Gorman brilliant guy he's moving -- firm in direction of much more of a brokerage firm where it takes less risk but they still have a capital markets -- And this is what would I think is gonna go on -- Morgan Stanley I think they're gonna shrink -- capital markets on my reporter relative to talk about selling.
Various training components I think there's no doubt that's gonna have because.
They are the -- of the Wall Street players.
And they're gonna cut and they and -- -- -- -- something about the market because they have a trading day trading group -- still there and still taken risk.
People's it to people sell the stock and not only that which are real -- whereabouts people lending you money -- just watch Morgan Stanley going forward see how much they adopt the brokerage model.
If they really adopted and I think it's fine but if they think sixty the middle here which is what they are.
I think that an improper going to sit proms are in the forecast gonna break up from Morgan Stanley or consult my my my my gut is that they will get out of certain risk taking businesses even more -- -- been done is they demanded of the Dodd-Frank my -- is that they sell and not listen I've told -- they thought about.
You know unloading capital markets I don't think they're going to be the whole capital markets.
But the commodities business I could see that going I could see them doing some sort away.
To free up their balance sheet because you know all these firms they need balance sheet if you wanna stay in this business it's very difficult.
Unless you're purely a pastor like Charles Schwab right.
You -- buys and -- up you're you're like a broker you don't do much -- you know it's very hard right now very hard to to exist in this environment and obviously now that you have former years in -- Obama.
You're not going to get a -- Dollars that are smaller economies smaller business you know -- and you're not gonna get a relaxation of contract.
You know history is bigger tax them higher taxes smaller paychecks -- -- little -- so we got I guess right up thanks so much illustrating.
