Leucadia National Buys Jefferies

While the stock market is open today, the bond market is closed in honor of Veteran’s Day. The stock market still seems unnerved by recent events although I think it’s unfair to blame President Obama’s reelection for the entire downturn. There are still concerns about the fiscal cliff and more unresolved problems in Europe.

Regarding the fiscal cliff, I think leaders of both parties realize that the American public is weary of more partisanship, and it’s in their best interest to reach some sort of deal. If nothing is done before the end of the year, automatic across-the-board tax increases will go into effect. I imagine that some tax increase on the wealthy will be passed in exchange for some measures on entitlements (like higher retirement age). I won’t guess as to the specifics but it’s not in anyone’s interest to have a bloody, drawn-out affair.

There’s actually some good news out of Greece for a change. The country’s parliament passed its austerity budget by a vote of 167 to 128. Once the bigwigs in the EU give the thumbs up, this will clear the way for Greece to get another $40 billion in aid. The problem for Europe right now is that the southern part is weak and that’s starting to pull Germany down.

One of our former Buy List stocks is in the news as Leucadia National ($LUK) is buying Jefferies ($JEF) for $3.7 billion. LUK already owns a big chunk of JEF. In fact, they even increased their stake last year during the sovereign debt crisis. Now LUK will buy the whole thing.

Posted by on November 12th, 2012 at 10:33 am


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