SELF LOATHING DOES NOT GET HEALED ABSENT SELF HATE ALCHEMY INTO ENLIGHTENED LOVE

KATHY FULD

You Wont Read This On The Greenwich Time Website

... New York Times reported the very rich ladies in city have not stopped shopping, despite how "vulgar" it might seem:  simply started shopping in private at shopping parties, private hotel suites, and by-appointment-only showrooms so as not to get tarred and feathered along Fifth Avenue ... Then there are women like Kathy Fuld, wife of former Lehman Brothers chairman Dick Fuld, who, according to The Daily Beast, has been visiting Hermes on a weekly basis and spending between $5,000 and $10,000 at a time. It seems she simply can't be bothered with this whole saving business right now regardless of how much of a public villain her husband has become. (On the bright side, at least she's funneling money back into the struggling economy.)

http://greenwichroundup.blogspot.com/2008/12/121508-kathy-fuld-trying-to-hide-her.html

Left: former Lehman Brother president Chris Pettit with his wife, Mary Anne, in 1984. Right: former Lehman C.E.O. Richard Fuld with his wife Kathy, at a Museum of Modern Art benefit honoring him in 2006. Right by Matt Carasella/PatrickMcMullan.com.

Lehman Brothers C.E.O. Dick Fuld expected his top executives to get married, and stay married. For their wives, the firm was both fishbowl and shark tank, with unwritten rules about the clothes they wore, the charities they supported, and the hikes they took at the company’s Sun Valley retreats. One and a half years after the firm’s collapse, in an excerpt from her new book, the author sums up the high price—a life of isolation, backstabbing, and hypocrisy—paid by Lehman’s better halves.  By Vicky Ward  http://www.vanityfair.com/business/features/2010/04/lehman-wives-201004

Excerpted from The Devil’s Casino: Friendship, Betrayal, and the High Stakes Games Played Inside Lehman Brothers, by Vicky Ward, to be published this month by Wiley; © 2010 by the author.

On Wall Street, they pay you so much that they own you. You know? So it’s different. They have your soul. You gave it to them for the money. —Mrs. Bradley Jack

The senior executives at Lehman Brothers, the storied Manhattan financial firm that was founded in 1850 and went bankrupt in 2008, were expected to have wives. And, if possible, they were supposed to be happy with them. If they were not happy, they were expected to pretend. In later years no one at the firm would ever forget what had happened to the late Chris Pettit, the longtime deputy to C.E.O. Richard “Dick” Fuld.

Pettit, good-looking, six feet two inches, a decorated Vietnam War hero, had been adored by the Lehman rank and file. Seen almost as a god, he was their real captain, instead of the more taciturn and less charismatic Fuld. But in the early 1990s, Pettit, a devout Roman Catholic, embarked on an affair with a woman at the firm.

Lehman Wives: A Family Album

This did not sit well with Lehmanites, especially as Pettit liked to emphasize moral values. He was the man who had banned Playboy magazine from the trading floor, and at a dinner for the senior executives in the 1980s he had said, “Now, look at this! Every single person here is with their original spouse. That is why we are successful. Because our word is our honor. We succeed in business because people can trust us.”

So when he broke his own code, it destroyed his career. His closest allies at the firm deserted him. These were Tom Tucker (head of sales), Pettit’s fair-haired best friend since kindergarten; Steve Lessing (Tucker’s affable deputy); and, perhaps most crucially, the hot-tempered fixed-income head, Joseph Gregory. Gregory, who, along with his wife, declined to comment for this article, disliked Pettit’s new mistress and once told Tucker that she was “evil.” (She in turn described Gregory to colleagues as “dumb as rocks” and “untrustworthy,” according to numerous sources.)

But it wasn’t just the men who were angered. Their wives were, too. Sandra Lessing and Heather Tucker especially were distraught at Pettit’s abandonment of his wife, Mary Anne, a pretty, auburn-haired former gymnast, who had been Pettit’s high-school sweetheart and had borne him four children. She had stuck with him through tough times when they were so poor they couldn’t afford blinds for the windows in their house. The Lessings, the Tuckers, the Gregorys, and the Pettits all lived close to one another in Huntington, on New York’s Long Island. They sometimes vacationed together, and for years the four men had carpooled to Lehman’s Lower Manhattan headquarters, stopping off before work at the gym, where they’d been nicknamed the Ponderosa boys—a reference to the popular 60s TV show Bonanza. At the office and outside of it they were sometimes known as the Huntington Mafia.

But with Pettit’s affair, the group split apart, and the men began to drive in separately. The women continued to support Mary Anne, who always believed her husband was coming back. She kept his clothes in the closet and his slippers under the bed.

After Lehman filed for bankruptcy, Kathy stayed on the MoMA board but was no longer in contention for the chairmanship. She just wasn’t rich enough anymore. Over the past year and a half, the Fulds sold some of Kathy’s art collection for $13.5 million and their 16-room Park Avenue apartment for $25.87 million. She learned something that other Lehman wives had learned before her: “When your husband leaves Lehman, you become a ghost.” But in Kathy’s case, Lehman had become a ghost along with her.

This week, the financial world is in shock.  Lehman Brothers is bankrupt after 158 years in business and my friend, Richard Fuld, is the Chairman & CEO of Lehman Brothers ... If he can fail, then what chance do the rest of us have?  Actually, quite a good chance, since we're still here and he's looking for a job.  Ha ha.  [Off the record, I have offered Dick a first-look production deal at Manka Bros.  He has a couple of screenplay ideas that sound really good.  He'll let me know by tonight.]  ... Richard "The Gorilla" Fuld and I met over 30 years ago.  He was a die-hard Deadhead and used to follow the Grateful Dead in a Volkswagen van (he notched over 300 shows before Jerry Garcia died!).  As you all may know, I was in my own band back then and would catch the Dead whenever they played Southern California because of the easy access to experimental drugs.  Dick Fuld was known as the King of the Deadhead Parking Lot.  He organized drum circles, tie-dye t-shirt joint ventures, brownie sales, etc.  I knew he was cut out for business when he told me that he "increased bongo playing by 10% after just one week on the road" ... I met him in the ocean near the Ventura County Fairgrounds where the Dead were playing.  He seemed a little out of it.  He had just seen Jaws and was trying to get a shark to eat him.  I pulled him out of the ocean, gave him a beer and we've been friends ever since ... After he worked his way up the Lehman Brothers chain, finally becoming Chairman & CEO in 1994, we continued to be close.  Lehman Brothers funded every Manka Bros. project I threw his way.  He once told me, "If you can dream it - I can fund it."  ... Our most recent deal with Lehman was in 2007.  Dick gave us a $500 million dollar line of credit to complete Rampage Of The Stegosaur (which went on to lose over $200 million) and several other movies on our slate that year.  We had run out of money by Valentine's Day and really needed that infusion of cash to get us through the year.  I remember Dick Fuld telling me after I asked for the money:  "Look, Khan, I'm pissing thousand dollar bills these days.  And I drink a lot of water.  So I make a lot of piss.  Whatever you need, you got."  Those days are apparently over ... I assume we don't have to pay that money back now.  Which is good - because we don't have it ... Khan Manka, Jr. - Chairman & CEO - Manka Bros. Studios ... http://mankabros.com/chairmans-blog/2008/09/disgraced-lehman-brothers-ceo.html

The biggest fall: Lehman Brothers, 5 years on http://rt.com/business/lehman-brothers-5-year-817/   September 14, 2013 16:41 Get short URL

Dick Fuld, who called himself "the most hated man in America” after the crisis at a House Oversight and Government Reform Committee hearing on on Capitol Hill in Washington DC. Protestors hold signs behind Fuld as he takes his seat to testify on October 6, 2008 file photo. (Reuters/Jonathan Ernst)

The US is just emerging from the financial meltdown and experts are asking if it will happen again. Wall Street is “reformed” with new “anti-crisis tools,” while Lehman Brothers’ former CEO is tucked away in his $19 million Sun Valley, Idaho mansion.

On September 14, 2008, Lehman was the fourth-largest investment bank in the US. On September 15, in the early hours of the morning, the firm filed for bankruptcy. 

Lehman went bust in a sensational downfall, as its stocks became valueless and the firm was downgraded by rating agencies. After a failed acquisition by Barclays and minutes before Japanese markets opened, Lehman declared bankruptcy, which eventually pulled the entire global economy into a tailspin.

The day before Lehman announced bankruptcy, America’s secretary treasurer Hank Paulsen flew from DC to New York for an emergency meeting with Wall Street's top bankers. Paulsen refused to bail out Lehman, proving to America some banks weren't "too big to fail." 

The Dow and the Nasdaq crashed, hitting lows that weren’t seen since the financial crisis of 1987, and two days later, the US government bailed out AIG, an insurer which had backed billions in subprime loans.

The US government shelled out dough to save GE and Chrysler, companies as American as apple pie, and employed hundreds of thousands of people who weren’t Wall Street bankers, but plant workers and manufacturers.  

Four months later, and three days before Obama’s inauguration as president, Bank of America received $20 billion from the Trouble Asset Relief Program (TARP). If the government hadn’t intervened, many other top banks would have shared Lehman’s fate.The Fed put together a giant, $800 billion bailout for Wall Street at US taxpayers’ expense. 

The US government became a lender of last resort, and the UK government also handed out massive bailouts to subsidize British banks.

The source of the 2008 crisis is still an open case, and isolating different factors can yield varied analysis. Hindsight is, however, clear enough to say bankers oversold subprime mortgages which led the housing market to burst. Investment banks had overleveraged their stake in real estate, and Lehman in particular had nearly $40 billion tied up in real estate they couldn’t easily liquidate.

The real estate strategy was complicated by mortgage groups Fannie Mae and Freddie Mac, who drove the housing bubble, selling more than 25 million shoddy mortgage bonds prior to the crisis.

The two mortgage companies were saved by the US government, which has kept the firms afloat with roughly $190 billion in assistance.

Banks were left exposed, and unable to liquidate. 

‘Not an act of God’

Only Lehman was dismantled, the rest were given government handouts and still remain huge – not only in New York, but in London, Singapore, and other financial hubs worldwide.

Asked if economic crisis could strike again, Paulsen said, “The answer, I’m afraid, is yes,” in an interview with Bloomberg Businessweek.  

"Henry Paulson is correct, another financial crisis could easily happen either in a European or American context. However the impact would be felt wider, BRICS countries wouldl be adversely affected by any crisis and would not be able to isolate themselves from impact," Malcolm Coates, a partner at Deloitte CIS, wrote in a note to RT.

One of the biggest Black Swans for economic policymakers is this 'impact', a so-called “Lehman moment” – which in 2008 triggered the fall of a single industry. Financial leaders have worked tirelessly on new tools to protect the banking sector from another such crash.

Societe Generale warned that Greece’s exit from the euro zone risked another “Lehman moment” as the shift could have crippled stocks and brought similar devastation to debt markets.

Olli Rehn, EU commissioner for economic and monetary affairs, wants to keep Lehman in the past, and said the crisis was “not an act of God.” Rehn said policymakers must remain “vigilant” and “never lower our guard,” even though regulation and supervision have been significantly strengthened. 

Stress test dummies

Are we safe now, do our banks have the tools our leaders say they do to prevent another Lehman moment?

Rhetoric like “more transparency” and “more accountability,” harvested from grassroots campaigns like Occupy Wall Street, now dominates global financial summits and doctrine. No world leader can publicly be pro-shadow banking or anti-disclosure in a post-Lehman era. Even the Swiss, notorious for secret banking, are coming into the light.

The banking industry has rebuilt itself, and large firms claim to be healthier, which the post-recession record number of small business loans in America last July is testimony too.

Low equity levels led to the hemorrhaging of Wall Street in 2008, as some banks had just pennies of equity for every dollar lent. The problem is being tackled with higher capital requirements for banks, to protect taxpayers from big bank losses.

The Fed is pushing big banks to meet these requirements, but says there is "still considerable room for advancement,” maintaining that more, high quality capital will help absorb any potential losses. 

More financial regulation, however, means decreased margins, so financial experts are trying to find the right balance between higher capital requirements, risk control, and profit. 

"If the regulators continue to over supervise the banks they could stifle their ability to make meaningful returns for their shareholders," Coates told RT. 

Stress tests, the annual check-ups of capital adequacy quotas, are performed by the Fed on 19 major banks. They require banks like JP Morgan, Citigroup, Goldman Sachs, Morgan Stanley and Bank of America provide roadmaps on how they would in theory handle a future crisis, ranging from mild to severe. 

Financial institutions are transitioning through Basel II to Basel III, a voluntary stress test many banks have pledged adherence to.  

"As a global industry we see regulators throughout the world implement requirements of the Basel Accord," Coates told RT. 

The problem with these tools is that bank lobbyists assist, and often dictate, the draft legislation of new regulations. An obvious conflict of interest, this usually benefits the banks and not the taxpayer.

“Banks have ended up in a toxic alliance with governments, and that’s a fundamental problem for society,” Patrick Young, Executive Director of DV Advisors, an emerging markets advisory firm, told RT.

According to stress tests, the books are better than they were five years ago, yet numerous incidents – such as the Libor-rigging scandal, whale-sized disclosure cover-ups, and probes against countless banks – have shown that for some Wall Street execs, the market is still their personal playground, and they are just as detached from Main Street as they were back in 2008. 

The lonely 'gorilla'

Lehman CEO Dick Fuld, nicknamed “the Gorilla” among bankers for his crass, aggressive demeanor, spearheaded the company for nearly 15 years – making him, until the fall, Wall Street’s longest surviving chief exec.

Starting as an intern and rising through the ranks, Fuld took an American Express spinoff and did what he promised his employees and crushed all other competition.

His hubris demanded great respect from his employees and also deluded him into thinking the burst was just another routine downturn in markets. He refused to accept he would be the final CEO of a bank he helped build so much.

Investment for Fuld in the bank was both financial and personal, as much of his wealth was tied to the firm. This money disappeared into thin air after the bankruptcy, and he is only worth a fraction of his former fortune, which once exceeded $1 billion.

Fuld walked away with no severance package, but enough security coverage to fend off legal claims. On September 15, nearly all employees came to work were immediately sent home with their office belongings. It was over.

Though somewhat a pariah in investment circles, Fuld is still in the game, trying to keep the Lehman days in the past. In 2009, with his wife Kathleen, he founded Matrix Advisors, a merger and acquisition firm.