Up 72% in 2009.
Shares in a $5 billion pool of toxic assets distributed as 2009 bonus pay for Credit Suisse Group investment bankers returned 72% last year, people familiar with the situation said.
Known as the Partner Asset Facility, the plan was originally billed as a way for Credit Suisse bankers to “eat their own cooking.”
The pool is largely made up of commercial mortgage-backed securities and leveraged-loan products Credit Suisse sought to offload in late 2008 as it scaled back its own risk-taking. The fund assets originally included debt of a Japanese shopping center, a mining company and a U.S. supermarket chain.
When the fund was unveiled in January, 2009 Credit Suisse bankers groused about the plan, fearing the securities would register few gains. Some bankers argued that they hadn’t contributed to Credit Suisse’s 2008 net loss. A number of them had hoped for cash bonuses instead.
But Credit Suisse’s timing now appears impeccable. The fund’s 72% increase for 2009 compares with a 23.5% rise in the Standard & Poor’s 500-stock index and an 18.8% gain in the Dow Jones Industrial Average. Credit Suisse shares rose 60% over 2009.
Even the bankers who sold this stuff thought they were dealing in er, barnyard material. Only problem: they can’t withdraw their gains until 2014. Seems fair to me.
Two years ago, when 32 Twin Lakes Drive (Gilliam Lane to the rest of us) came up for sale asking $15 million, I pointed out that the tired old house had long ago lost its water access and land and was now just a moldering wreck with waterviews, hardly worth that sum.
The owner must be gradually beginning to realize he was sold a bill of goods by his listing agent because he’s been slowly reducing his price and it hit $10 million a few minutes ago, just before the closing bell. That’s a good start – assessment is $4.560, which seems like a good ending for this place.
How could the owner have been so gullible? Well, this is the guy who allowed himself to be blackmailed by Internet hookers thrice, twice by the same girl. Hope springs eternal.
613 Steamboat Rd
This new construction opened at $8.75 million in September and is down today to $7.450. I guess its value depends on how much someone appreciates being close to I-95 and the train. To me, 6,000 sq. ft (with I’d guess 2,000 of that underground) on 0.21 of an acre just doesn’t do it, no matter how beautiful the finish work.
But it does offer convenience, and the owner can always stroll down a few yards to the public dock to fish and brush up on his spanish with the limo drivers who hang out there. I mean, have you checked the cost of Berlitz these days?
Up 27% from 3rd quarter, pace of failures expected in quicken. This might actually be good news for home buyers because the people who made bad loans will be gone and their replacements won’t need to worry about defending themselves. Their job will be, I hope, to get rid of the problem loans and that should introduce a more flexible negotiation stance. Should.