It's better to PIK then be PIKed

The company Christmas party Wednesday night was actually very fun. As the CIO said we rolled back the rugs, had music, food, wine and good friends. A few of us went across the street before hand and had hot toddies- we had to explain to the bartendress how to make them though. Afterwards I and one of the other traders who shares the same surname as me went across the street to a different bar for one more that turned into about six more just because. I got home, went right into the boys room and slept on one of the twin beds there. Thursday morning- hell all Thursday was not fun. At least I made it to the desk only about a hour late whereas the COO did not get in to the office until about 10:45. The CIO did not even make it in to the office.

The big story Thursday was what CSFB did to their executives for their bonus. They are taking all the toxic shit they collateralized and putting it into a partner asset pool. The bonuses will be paid out in from that crap as it matures and/or defaults. Oh, by the way it's also levered 7:1. There is also a clawback- that is if the executives leave before it pays out, any cash they did get will have to be paid back. That my friends is called PIK. Before Mr. Barrett asks me PIK stands for Pay In Kind. When someone asks for cash back, or redeems, you are allowed to deliver to them securities that at the time have a market value equivalent to the cash they asked to be remitted. It is a possibility in many financial ventures particularly hedge funds. For the record the hedge fund I worked at did it to all the scummy European fund of funds. The best part about that was we gave them all the gains and all the illiquid crap.

Thursday night when I got home I took a nap as the husband had drinks with a broker and got his haircut. We met for dinner at our local favorite, came home and went to bed at 9:30.

This morning it was cold and overcast in preparation for the storm that was coming our way. It started snowing around 10 AM. At one point I could not see the Hudson River, New Jersey or the building next to me. I was debating leaving work early because I had to drive down to central Jersey to pick up the boys but decided against it. By the time the markets closed it was not nearly as bad weatherwise. The drive still took me two and a half hours to get there and one and a half to get back.

So it looks like everyone but the ECB will go the Q.E. way. The BOJ cut rates to 10 bps. Since the Fed is targeting a range of zero to 25 bps apparently BOJ did not want the yen to lose its crown of the carry trade. If the USD is not the new carry trade it will be soon.

Tomorrow we get the Christmas tree. I think Sunday I will take the boys into the city to see the tree at Rockefeller Center.