Sandy May Have Ruined Billions in Bearer Bonds

Wall Street could lose $70B, source says
By Neal Colgrass,  Newser Staff
Posted Nov 18, 2012 2:02 PM CST
Water from superstorm Sandy is pumped from a flooded basement of an office building near New York's Battery Park, Friday, Nov. 2, 2012. The massive storm that started out as Hurricane Sandy slammed into...   (AP Photo/Richard Drew)

(Newser) – Add this to Superstorm Sandy's damages: billions of dollars in soaked bearer bonds that may never be recovered, the New York Post reports. The storm surge flooded a huge underground vault in New York, sousing 1.3 million bond and stock certificates with water, sewage, and diesel. Now a cleanup crew is on the scene, probably trying to dry out the bonds with a freeze-dry process. But one source says $70 billion in bonds may be lost forever.

The vault's owner won't reveal its contents, and member firms like Deutsche Bank, JP Morgan Chase, and BofA didn't return the Post's calls. Goldman Sachs did call back, however, and estimated its bonds at "less than $1 million"—then quickly called with a new appraisal of "less than $10,000." One tip from a hardhat on the scene: "I know they were all under water. Billions of dollars’ worth, soaked." For the record, bearer bonds are usually issued by governments and can be redeemed after a set term—but were popular for hiding cash, so the feds stopped issuing them in 1982. (Read more bonds stories.)

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