Credit Suisse PPIPimp Slaps Timmy's Dumb Toxic Asset Idea

Friday, August 07, 2009 , , , 0 Comments

Personally, I would be a tad offended if my bonus came out of a pool of toxic assets but thankfully I'm in private industry and my bonuses usually number in the $100s as opposed to the $bazillions.


Credit Suisse Group AG, the largest Swiss bank by market value, told bankers a pool of toxic bonds and mortgages set aside as part of their compensation gained 17 percent since January, a person familiar with the matter said.

About 2,000 bankers were told of the return, based on a $5 billion fund of bad mortgages and bonds, the person said, declining to be identified because the matter is private.

Credit Suisse decided last year to use leveraged loans and commercial mortgage-backed debt, some of the securities blamed for generating the worst financial crisis since the Great Depression, to fund executive compensation packages. The Zurich- based bank, which sidestepped the worst of the credit crunch, posted a 29 percent increase in second-quarter profit last month as revenue from trading stocks and bonds doubled.

“It came up with a novel idea while the market was depressed,” said Jason Kennedy, chief executive officer of Kennedy Associates, an executive recruiter for Wall Street and the City of London. It’s unlikely other banks will mimic the approach now that markets are improving, he said.

Credit Suisse advanced 86 percent so far this year in Swiss trading, the eighth-biggest gain among the 63 companies on the Bloomberg Europe Banks and Financial Services Index. The stock declined 0.8 percent to 53.1 Swiss francs by 2:44 p.m. today.

Know what I say? Good for Credit Suisse. Of course, in Bizarro World AIG is climbing, the Dow is up on (not as bad but still) bad unemployment numbers, and $CS drops after this news comes out. Yeah that totally makes sense.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.