It's getting harder to consistently make money: Jefferies has just confirmed it
JPMorgan is announcing its third quarter results later today. While the world awaits to see what's happened since June, Jefferies has kindly relieved some of the tension.
The ambitious mid-sized investment bank has just released its 10Q for the three months to August 2010. It shows the number of days on which Jefferies made a trading loss leaping upwards.
In its third quarter (to August 31st), Jefferies lost money on 22 days. In the second quarter (to May 31st) it lost money on only 13 days. So far in 2010 it has lost money on 49 days in total.
This compares unfavourably with the whole of 2009, when Jefferies only lost money on 10 days.
The message is clear: banks can't rely on trading businesses to be consistently profitable, even before new capital rules are introduced. Compared to 2009, traders' compensation is likely to fall. Anyone still thinking otherwise is mistaken.
