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Lehman minibonds and its possible successor

with 4 comments

An interesting article by BW on how Lehman’s minibonds were marketed and what became of them and their investors.  Here’s something interesting:

Despite the mess in Amsterdam, new deals are hatching in Europe. On Feb. 11 Goldman registered a plan in Ireland to sell notes that seem similar in structure to the ones sold by Lehman in Amsterdam. The notes will be issued by an Irish unit called Goldman Sachs Financial Products Europe, according to the prospectus. Like Lehman’s notes, some of Goldman’s will be backed by the parent company in New York. Goldman declined to comment.

Goldman’s operation is similar to Lehman’s in another way. Two of the subsidiary’s directors are executives with Deutsche International Corporate Services, a unit of Germany’s Deutsche Bank (DB) that provides trustee and securities services to scores of investment vehicles set up by Goldman and others. The mailing address for Goldman’s Ireland subsidiary? It’s the one used by the Deutsche operation.

Goldman Sachs yet again.  Speaking of how Goldman has turned into a hedge fund, their website shows the following:

Goldman Sachs homepage screenshotClicking on those giant white words bring up a disclaimer which you have “Confirm” before they’ll let you proceed.  Among other things the disclaimer warns that no investment is risk-free, and that Goldman bears no responsibility. An excerpt:

GS will have no responsibility to maintain the Material or to supply any corrections, updates or releases concerning the Material. By accessing this site, you expressly acknowledge and agree that the Material provided by us is on an “as is” basis, and used at your sole risk. Before acting on any information provided in this material, clients should consider whether it is suitable for their particular circumstances and, if necessary, seek professional advice. Information provided on this site does not constitute tax advice and as such, investors or prospective investors should be advised to consult their own tax advisers regarding the tax consequences of their investment activities. We have relied upon and assumed without independent verification, the accuracy and completeness of all information available from public sources.

No investment is risk free. Equity securities are more volatile than bonds and subject to greater risks. Fixed income investing entails credit risk and interest rate risk. When interest rates rise, bond prices generally fall. Credit risk refers to the possibility that the issuer of the bond will not be able to make principal and interest payments. High-yield, lower-rated securities involve greater price volatility and present greater credit risks than higher-rated fixed income securities.

What the hell is Goldman Sachs up to this time?


Written by defennder

May 12, 2009 at 12:56 AM

4 Responses

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  1. HAH! Love the last paragraph in the quote.

    Yes, why such ambivalence by him this time round?


    May 12, 2009 at 9:35 PM

  2. Was it Marx who said history repeats itself twice, first as tragedy, second as farce? I agree with him.


    May 12, 2009 at 11:02 PM

  3. its Max Weber.


    May 14, 2009 at 2:23 PM

  4. Ok thanks for the correction.


    May 14, 2009 at 10:41 PM

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