A former Goldman Sachs trader just took out a loan with the firm, and if he doesn't pay it back, the investment firm can pop 15,000 bottles of his stock of Burgundy and Bordeaux. Andrew Cader, who once worked in Goldman's specialist-trading unit, pledged the collateral with a "secure interest," Bloomberg reports, but jokes aside, while the investment-grade wine market has performed quite well in the last decade, vino's one of the least desirable backings for private banks, below real estate or artwork. That's because it's easy to pass cheap wine off as fine, and vintage counterfeits reach into the hundreds of millions of dollars.
Even so, backing a loan with fancy high-end wine is a common practice. "Pawnbrokers" like USGoldBuyer.com do it; Britain's Prime Asset Loans has a list of wines it'll accept; Credit Municipal de Paris has a designated eighteenth-century wine cellar that can hold more than 90,000 bottles. The value of Cader's collection in question is estimated into the seven digits: The Bordeaux are all first growth, while the Burgundy in this filing are also grand cru and premier cru, both of which also show in the top tier in their class. Cader's private wine assets bank at $1.93 million as of November 30, 2011.