This is Some Sweet Schadenfreude

As both my readers are no doubt aware, there is in the financial world a large number of assets for which no regular market exists.

Regulations call them "Level 3 Assets", but I call them "The Big Sh&$pile", a term that I stole from Atrios.

Normally this means that if you want to sell them, it's a laborious process to find a buyer and set a price, which differs from "Level 1 Assets", like stocks, where you can fire up your PC and trade them online.

These days it means that there are no buyers at all, for these Byzantinely complex instruments that the financial whiz kids created, so they are, for intents and purposes, worthless.

Well, it now looks like employees of Credit Suisse will be getting pieces of The Big Sh&$pile instead of cash for bonuses this year:

Credit Suisse Group AG’s investment bank has found a new way to reduce the risk of losses from about $5 billion of its most illiquid loans and bonds: using them to pay employees’ year-end bonuses.

The bank will 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, people familiar with the matter said. The new policy applies only to managing directors and directors, the two most senior ranks at the Zurich-based company, according to a memo sent to employees today.

Talk about just desserts.

Me, I would also use them for severance packages for "the most senior ranks" of employees too, but I like to twist the knife.