We learn from Bloomberg that Credit Suisse has devised a stunningly brilliant way to give year-end bonuses to its most senior executives: it's going to give them some of the rubbish assets they've got stuffed in their balance sheet.

Leveraged loans and mortgage-backed securities will be handed over as bonus payments, reducing the bank's exposure to these things while at least giving execs something that's better than nothing. If they go up in value, so much the better. If they go down further, tough!

The idea was described by analyst firm Sanford C Bernstein as "monstrously brilliant", and we have to agree - but wouldn't you have loved to have seen the expression on the faces of the top execs when they were told?

Maybe this should be the basis for remuneration schemesin future: 0.5% (or whatever) of everything that investment banks sell should be put into the bonus pool and distributed to bankers when the assets mature. Maybe then they'll think more carefully about whether they should be selling it if they aren't so keen on being given it.

The US Fed announced last night that the Federal Open Markets Committee is now setting a target rate for the Fed Funds rate of between 0% and 0.25% - and that this rate range is likely to hold "for some time".

Here's what they had to say about it:

"Since the Committee's last meeting, labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further.

"Meanwhile, inflationary pressures have diminished appreciably. In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate further in coming quarters."

Markets were encouraged by the promise that the Fed "will employ all available tools to promote the resumption of sustainable economic growth".

As for Britain, Bank of England Governor Mervyn King had to write another of his "inflation letters" to the Chancellor yesterday as the CPI was still more than 1% above target at 4.1%. King said that, once inflation gets back within the 1-3% range next year, the next letter he has to write may be to explain why inflation is below the target.

Next Bank of England MPC meeting is on 8th January. Over to you, Mr Governor...

* Noon Libor update, lifted from FT Alphaville:
3m sterling --- 3.0525%
3m dollar ----- 1.57750%
3m euro ------ 3.145%

Well, nobody, as it turns out. But the firm of Friehling & Horowitz has certainly been Bernard L Madoff Investment Securities LLC's auditor, at least until very recently.

Who? According to Bloomberg, it appears to be a firm with one partner in his 70s, one accountant and one secretary.

And this is where Friehling & Horowitz are based, according to Google Maps, in a suburb about 40 miles from Wall Street - and you can see how many other businesses are in this commercial park, so Friehling & Horowitz are obviously not quite as big as any of the Big Four nor any other conventional auditor that happens to have a multi-billion dollar client.

Wonderful thing, Google Maps. Maybe some of the investors who have lost their shirt might have given it a try to see how substantial the hedge fund's auditors were. As Bloomberg reports, one firm of hedge fund advisers told its clients last year not to invest in Madoff once they found out how tiny the bookcheckers were. So what was everyone else doing?

Apparently we Brits spend about £35 billion on Christmas festivities.

The horrendous, jaw-dropping $50 billion fraud perpetrated by former Nasdaq chairman Bernard Madoff is almost exactly the same amount.

It's a comparison that helps get our heads around the scale of this rip-off: the amount of money that suddenly doesn't exist is so great, it's as if Christmas was cancelled. It's like the Grinch who stole Christmas - but there's not going to be a happy ending in this one.

Gold used to be pretty much the only major financial asset with a negative yield, in the sense that you have you pay someone to look after it for you.

Today, the FT reveals that the yield on three-month US Treasury bills went negative yesterday at -0.01% -- the first time yields have been less than zero since the second world war.

Yesterday the US Treasury sold 30 billion dollars' worth of four-week bills at a yield of zero.

It reminded me of a young, starry-eyed (and slightly drunk) corporate financier I met decades ago who said that his dream was to launch a "perpectual zero" -- a bond that need never be redeemed and which paid no interest.

For a moment I thought that if the current flight to quality continues, he may yet realise his dream. Then I remembered he was talking about a perpetual zero corporate bond rather than a government bond. We already have perpetual zeroes in the government arena. They're called "taxes".

Just flew back from New York (and boy, are my arms tired. Boom, boom). It was an eye-opener just how much time is being devoted on the news to the debate on Capitol Hill about the bailout of Detroit.

Particularly interesting was the passion and the range of views. On the one hand, there's the "If we can bail out the banks, we can bail out the car manufacturers" brigade. Then there's the league who say, "If we give you this money now how do we know you won't go bust anyway?" -- which seems a perfectly sensible question.

The car bosses certainly didn't do themselves any favours rolling up in stretch limos having driven all the way from the airport where their executive jets were parked.

Some in America are demanding various reforms and restructurings as part of the deal -- demands that are met with the riposte, "When you're putting out fires you don't discuss architecture." "Dinosaurs!" cry the troop who don't want to finance a dying industry. "This isn't the same car industry your dad worked for in the 1950s and 60s," say those who claim that Detroit is now a modern, high-tech industry -- but still one in need of Federal support.

In Obama's America, though, don't be in any doubt that a deal will be done. Then place your bets as to who demands money next. Based on my experience this past weekend, it won't be Macy's department store.

* It was good fun skating on the rink in Bryant Park, facing the New York Public Library and overlooked by the glorious Empire State Building. The skating was free, courtesy of Citibank. Ironic, given that the bank itself is on such thin ice.

A press release arrives, informing us of the views of Professor David Hillier from Leeds University Business School. "We're all to blame for the current economic crisis!" it trumpets.

And he means everybody. Shareholders were to blame because they were happy for banks to take risk, bankers were to blame since they were happy because of their remuneration schemes, consumers were to blame because they were happy to take out cheap credit, and the government was to blame because it was happy with the tax receipts it was earning.

So everyone, therefore, is to blame.

Now we're not saying that Prof Hillier isn't right -- it's just that we don't think he's going to get many Christmas party invitations this year...

We've been keeping an eye on Libor in this blog, as regular readers will have noticed. There have been a few encouraging signs that the lending risk premium is starting to fall a little, but the FT today reports that the premium that has to be paid by even top-quality corprate borrowers is going stratospheric.

National Grid, for instance, which describes itself as "an extraordinarily low-risk business", issued EUR600m in 6-year bonds at a ridiculous 330 basis points above euro Libor - about seven times what it was paying before the credit crunch. (See our recent interview with Grid's FD here.)

Daimler had to pay 600bp over Libor - 20 times more than in 2005 (but perhaps bond investors have half an eye on the parlous state of Detroit).

Add to that, we read that the cost of insuring debt against default via credit default swaps (CDSs) has also reached record highs. Apparently a thing called the iTraxx Crossover index (treasury junkies will know all about this) reveals that the annual cost of insuring EUR10m of debt against default over five years is EUR 934,000 - in other words you're giving over half the value of the debt in insurance!

There's worse news: Business secretary Lord Mandelson is wagging his finger at the banks. If that doesn't get them lending again, what hope do we have?

Fannie Mae, the beleaguered American mortgage shambles, has just appointed David Johnson as its new CFO.

Curiously, it appointed controller David Hisey to that role three months ago, with no mention that we can see to the effect that his appointment was 'interim'. Hisey took over from Stephen Swad, who took on the role in mid-2007, and so was the one with the front-row seat when it all went pear-shaped, as our recent feature reported.

Three CFOs in just over a year is pretty good going. But of course it's even worse than that. It was as recently as January 2006 that Robert Blakely was appointed CFO, and he, in turn, took over from an interim CFO, Rob Levin, who took on the job at the end of 2004 after an accounting scandal that forced the group to withdraw and restate its accounts for 2001-2004.

So, including the guy that Levin took over from, that makes six CFOs in barely four years.

If you fancy a crack at the job yourself, you may get another chance before long, the way things are going...

With expectations running high of a cut in interest rates on Thursday that will take Bank Rate down to its lowest level since Mervyn King was a prince, we've already made history as the 10-year gilt yield hits a 30-year low of 3.67%.

Just to equip you for Thursday's cut, a 100bp reduction from 3% to 2% would take Bank Rate to a level that has often been matched, but never beaten.

In fact, if you want some pointers for your office Christmas party pub quiz (we're guessing that a team outing to Claridge's is off this year), then have a look at these factoids:

• The last time Bank Rate was 2% was November 1951, when it was increased to 2.5%
• At that time, Bank Rate had remained unchanged at 2% since October 1939 - fully 12 years with no change in interest rates!
• 2% was a common rate throughout the second half of the 19th century, when rates often oscillated between 2% and 5% (and sometimes 6%).
• The first time interest rates went as low as 2% was in April 1852

• When the Bank of England was established in 1694, the first interest rate was 6%

12.05 Libor update: 3-month sterling Libor now at 3.88125%, so the premium over Bank Rate continues to edge lower...