There Is a Season Turn, Turn, Turn ...

I’m perusing the comics financial press the other day, and I come across this gem: Goldman Sachs to issue $250 Million 50 year bonds [Due 11/1/2060], expected yield 6.25%, priced at Par = $25.

After I picked myself up off the floor and checked my pulse to see if I was still alive, some serious RED FLAGS immediately presented themselves. OK, so let me get this straight: GS, the bluest of blue investment banking bank holding companies wants some 50 year debt and is willing to pay 6.25%? With the Fed about 8 days away from starting QE2, at about $100 Billion a month, thereby driving long-term interest rates still lower [according to head wizard-of-smart Ben “Helicopter” Bernanke], why would you come to market 2 days before the proverbial  “buy-fest” in debt begins?

Could it be that the suits at GS don’t think interest rates can go much lower, and they might as well take the rubes money ASAP? Mix into this toxic soup some inflation going forward [how about 50 years worth], and you can be pretty much assured that underneath their collective breath they are chuckling mightily.

I know what you’re thinkin’: surely such crap A1 paper can’t be had by the common guy. Why GS could sell this thing out in 5 minutes to every astute pension plan and insurance company with a nickel in the bank. If only, oh my God, if only I [or you] could be let in on this deal. Why is it only the fat cats get the “special” stuff?

Fasten your seat belt Homer!! Maybe the stars are aligned just perfectly, I dunno. But isn’t it fortuitous that they have priced this at PAR = $25 and you can “get in on the deal” via the NYSE and take a piece of this bat guano. Got the “tingle in your legs” yet?

One more juicy tidbit: They got a 5 year window [2015] and then they can buy it back on the open market if they want. With Trillion Dollar deficits as far as the eye can see, hyper inflation around the corner, anyone wanna bet that in, say 2020 for instance, they buy this stuff back at $3 per share?

Since we are now in the “Turn, Turn, Turn … Season”, I am proud to announce that I am floating my own 250 Year, $250 Million Dollar debt issue. Natch, my credit rating is just as good as a TARP bank, so like Uncle Sam’s TIPS [Treasury Inflation Protected Securities] priced at a NEGATIVE -0.55% just the other day, I’m issuing my debt at a negative -0.50%!!

Priced at PAR = $1.00, I expect all of you dear readers to take a chunk of this good stuff. Matter of fact, even though you don’t know it yet, I took the liberty of already selling it to you. YES, I KNOW YOU KNOW HOW GOOD MY STUFF REALLY IS!!

Now remember, negative interest means you gotta pay me to hold the stuff. Just send all of your pocket change to my e-currency account at Liberty Reserve [Acct. # U0041308] every few weeks or so, and we’ll call it even! Hey, I’m a better credit risk than a TARP BANK! Oh yea, and just like GS, my debt is for “Corporate Purposes” also. So, sleep well at night knowing it will be spent invested wisely.

What’s the worst that can happen?

 -vegas

Flash Update as of 3:45 PM 10/26/2010
Honestly folks, I can't make this stuff up because it would be to easy. GS now says it will increase the size of its offering to $1.3 BILLION, from its original size of $250 Million, because demand for the issue is so high.

I'm gonna stay at $250 Million with my issue; I don't need the extra cash - I'll let GS skim the rubes.

-vegas