Credit Suisse (CS) Has Become My Favorite Bank

This is brilliant... simply brilliant! We are told how extremely valuable all this toxic junk the banks have on the balance sheet, and how it is SO undervalued by the market. So undervalued that our government is more than willing to buy it and hold it for a time so that when it reaches its "TRUE" value we all "win" (or that's how they sold TARP to us).

Can you even imagine taking away American banking head honchos bonuses in cash and giving them the same "assets" they spewed onto the world and now tell us are worth so MUCH but the market is IMPROPERLY valued? (note - these are the healthy type of assets, not even the truly toxic stuff they sold to customers worldwide) Would this ever happen in America? Laughable. Instead we are going to change the accounting rules of "mark to market" in 2009 (I assume) so banks hide more losses (another step toward Japan). But I love this - the Swiss just went up 20 pegs on my "favorite" list.

On a similar vein I keep asking where all the insider buying is in the banks, since the values are so compelling? So "cheap"?

• Some Credit Suisse Group bankers were left reeling after the bank said it would pay a substantial percentage of their 2008 compensation with an illiquid group of junk bonds, mortgage-backed securities and corporate loans. The move Thursday represents a radical revamp for the Swiss bank, which posted as much as $4.6 billion in losses so far this year, a number that could increase when it announces full-year earnings. For years bankers had received about half their compensation in cash, and the rest in stock.
• This year, up to 80% of the stock portion will come via what Credit Suisse is formally calling a "Partner Asset Facility," of the illiquid assets, largely corporate loans. About 90% of the assets are healthy and wouldn't fall into the "distressed" category. The portfolio will have fully matured in about eight years and the average life of the portfolio is a few years, the person said.
• The announcement elicited livid reactions from senior bankers, many of whom questioned whether it was legal. Many said they believed they were being unfairly punished for risky assets bought by colleagues in distant parts of the firm. And while the securities may prove lucrative over time, many bankers are already stretched for cash. "I guess I had a hard time vacillating between which was more offensive: that cash is no longer cash or that equity is no longer equity." (why the outrage - this is actually the good stuff that is only illiquid due to credit crisis, not the truly toxic stuff?) The bank is considering allowing outside investors to invest in the pool, a person familiar with the matter said. (see, it's good stuff - even outside investors want some of that action. Or is there an important piece of art that just MUST be purchased this year; hence you'd rather give up the huge upside for cash today?)

Myself, I'd love to see these top honchos who were paid egregious bonuses in 2003-2007 for what is now all mostly a hoax, and killed the careers of many in the lower ranks of the financial food chain - along with helping to dismantle the entire US financial system, get paid only in the illiquid assets they now claim are excellent and are unfairly valued - at least for the next 5 years. I mean if they are correct, their upside is enormous - this junk sells for 10,20 cents on the dollar so when it returns to its "rightful" 60-70 cents they triple (or more!) their bonuses! You think they'd go for that? Hah! Instead, we hand them TARP money which goes to their bonus pool, err I mean ... which goes to be lent out to Americans.

Well a hand clap from across the pond to the Swiss at least.