How close are we to seeing Goldman Sachs CEO Lloyd Blankfein standing in front of storage unit telling perspective bidders, “You can just look in, don’t touch, don’t go in.”
That the mental image I have from a story moving Thursday morning of Goldman repossessing a 217-ft luxury yacht from a former (i assume) client down in Palm Beach, Fla., according to a WSJ.com story.
Goldman, Morgan Stanley and UBS wealth management units have been active in lending cash to their clients against some esoteric belongings, such as wine collections, art collections and equity portfolios.
These banks are pushing these loans for two very specific reasons. They have an existing relationship with the client and knows his asset holdings. The banks also keep more of the profits from these loans, since there are little broker fees or other charges against the loan.
Goldman’s private bank has quadrupled its overall lending balances since 2012 to $29 billion. Morgan Stanley wealth-loan balances are up 420% since 2012 to $74 billion, according to the article.
To get back to the yacht, the luxury boat is listed for $39.9 million, according to broker. The outstanding balance of the loan owed to Goldman is roughly $28 million. So there is some wiggle room to haggle with Lloyd.