Goldman Says It Did Not Imbibe

Well, that didn't take long.

One day after Lehman bankruptcy examiner Anton Valukas issued a damning report that outlines how Lehman Brothers made billions of dollars of debt briefly disappear for the benefit of its quarterly reports, banks are starting to assert that they never used such techniques.

The questionable transactions were made in the repo market, which is short for repossession. They are short-term loans in which Lehman "lent" its debt in exchange for cash, then reversed the transactions after the reporting period had passed. It also used a so-called repo 105 structure, which made the loans look like sales.

The Valukas report says Lehman did $39 billion at the end of the fourth quarter of 2007, $49 billion at the end of the first quarter of 2008, and $50 billion at the end of the second quarter of 2008. It filed for bankruptcy protection on September 15, 2008.

"Goldman Sachs has never used this transaction," the bank told MarketWatch.

And it turns out that all of the counterparties in Lehman's repo 105 trades were based in other countries, according to Zerohedge. It says Mizuho, Barclays, UBS, Deutsche Bank, ABN Amro, and KBC lent money to Lehman in the repo 105 transactions.

The role of Barclays is particularly interesting, since it bought Lehman's core asset in September 2008, a few days after Lehman sought bankruptcy protection. The question is whether Barclays charged Lehman high rates for the transactions, in an attempt to weaken the bank, push it into bankruptcy, and buy it for a song. Lehman has sued Barclays, claiming that the $1.35 billion deal was undervalued.