Federal Reserve losing control

[vigilant]

If this quote from Paulson isn't enough to get your blood boiling nothing is.

``the vast majority of foreclosures in this country -- as regrettable as they are and as painful as they are -- are coming from people who either don't want to stay in their home and live up to their obligations or those that never had the financial capability to stay in their home.''

Hmmm...Paulson is in charge of untangling this mess (looting), and he doesn't even know that 2 + 2 = 4 every time you add it, and that numbers follow a "known" course just like water does. Sorry but I don't buy it, and its really that simple. Complicating simple issues is the forte of the old style robber barons that have ruled and looted this planet for tens of thousands of years.

(Bob can afford 500 a month for a house payment. Bob cannot afford 850. Since we the bank have taken all Bob's financial data we know this, and we also know his "break point" at which he cannot afford to pay his mortage.

Therefore we can only loan Bob enough money to amount to a 500 dollar payment, because asking Bob to pay more would be the following:

1. Something "we know" he cannot afford to do.

2. Since "we know", bad for our business to loan him more, because he would default on his mortage and we would have a failed loan.

3. Since "we know" it would be unethical.

4. Since "we know" it would be cruel and ruthless.

5. Since "we know" that millions of Bob's that were taken beyond their ability to pay would be bad for the financial system.

6. Since "we know" things bad for the financial system, multiplied many times over cause collapse.

7. Since "we know" that if we add 2 + 2 it will always equal 4, "we know" that if we add 350 to 500 it will always equal 850.

8. Since "we know" the Bob's of the world cannot afford 850, we didn't loan them more than they could afford to pay.

As bankers, we will however, within a few months or couple of years of making Bob the loan, jack up Bob's interest rate to the point that his payment reaches 850.

As bankers, professionals and experts in money and numbers, "we knew" the following would happen.

1. "We knew" that jacking up his interest rate would add 350 to 500.

2. "We knew" that 500 + 350 would equal 850 because it always does.

3. "We knew" that the Bob's of the world could not afford 850.

4. "We knew" that the Bob's of the world would default on their mortage.

5. "We knew" that millions of defaulted mortages would put investments banks in a collapse situation.

6. "We knew" that many investment banks in collapse might collapse the economy and create a depression.

7. "We knew" from the depressions we created in the past that people facing depression will let us do anything we want if we tell them we are "bailing them out".

8. "We knew" that a bailout would also result in us bankers being able to transfer bad debt to the people in financial pain, and that we would be rescued.

9. "We knew" our rescue would result in a transfer of wealth to us bankers of bibical proportions.

10. "We knew" that in the rescue we would gain permanent access to the peoples money for our future use.

11. "We knew" that we would simply be able to say, "we didn't know 2 + 2 always = 4" and the people would believe it because they trust us to protect them.

12. "We knew" they would trust us to protect them because we have been telling them we are here to protect them for thousands of years and it always works.

13. "We knew" it would work because for thousands of years we have exploited one of natures most pure and wonderful principles that she installed in the human race.

The fact that most people are kind, have empathy for their fellow man, and will not hurt each other on purpose. This being the case, people are naive and gullible and do not look for the wolf even though "we" are standing at their door. The Bible warns of "us" in many ways, but we have reinterpreted it, so that it may remain misunderstood. We killed Jesus, who won't we kill?

And until nature and evolution, due the abuse and hostility we heap on humanity, breed the empathy one human feels for another out of the human race, so that all humans become predators and gain the ability to spot "us" easily, we will continue to feed on the blood and naive nature of mankind. Which is why secrecy is so important to "us"....the hounds of hell and evil, the true magicians of society...







Paulson, Democrats Clash on Elements of Financial Rescue Plan

By Christopher Stern and John Brinsley

Sept. 21 (Bloomberg) -- Congressional Democrats clashed with Treasury Secretary Henry Paulson over whether the $700 billion rescue plan for U.S. financial companies should curb executive pay, setting the stage for a fight on the legislation.

U.S. Representative Barney Frank, the chairman of the House Financial Services Committee, said it would be a ``grave mistake'' not to include limits on the compensation of executives whose companies benefit from the plan. Paulson called such a measure ``punitive.''

``We need this to be clean and quick and we need to get it in place,'' Paulson said on ``Fox News Sunday.'' Paulson signaled a willingness to compromise on Democrats' demands that the measure help people avoid foreclosures.

President George W. Bush and Paulson have said the legislation must pass promptly to ease a financial crisis, and the disagreement over its provisions may complicate or delay a measure that would be the most far-reaching federal intrusion into markets since the Great Depression.

Paulson is asking Congress for unhindered authority to buy devalued mortgage-related securities from investment firms in an effort to keep the financial system from coming to a standstill. The proposal would prevent courts from reviewing the Treasury's actions while raising the nation's debt ceiling to $11.315 trillion from $10.615 trillion.

Oversight

Democrats said today that they understand Paulson's demand for passage of a bill that is not weighed down with a myriad of proposals. Still, they insisted that oversight and other provisions be added.

``We have a difference on what is clean,'' Frank said on ``Face the Nation.''

The legislation Congress will consider this week must include provisions to help homeowners avoid foreclosure and it ``needs accountability,'' Senator Charles Schumer, a New York Democrat, said on ``Fox News Sunday.'' ``It needs changes.''

Paulson said that while the bill could include ``mortgage relief components,'' he suggested that the administration's plan would already address the issue. He also noted that ``the vast majority of foreclosures in this country -- as regrettable as they are and as painful as they are -- are coming from people who either don't want to stay in their home and live up to their obligations or those that never had the financial capability to stay in their home.''
Bogged Down

Republicans warned of dire consequences if the proposal becomes bogged down in partisan politics. ``This could be the most serious financial crisis the world has ever dealt with,'' said House Minority Leader John Boehner, a Republican from Ohio, said on ABC's ``This Week.''

U.S. Senator Jon Kyl, an Arizona Republican, did not rule out congressional actions on executive pay and homeowner protections in the future.

``First let's put the fire out and then we can go deal with our favorite solutions to these problems,'' Kyl said today on ``Fox News Sunday.''

House Speaker Nancy Pelosi of California and Schumer promised to act on the plan by end of this week.

[antiaristo]

.

Edited for clarity:

`the vast majority of broken banks in this country -- as regrettable as they are and as painful as they are -- are coming from people who either don't want to stay in their business and live up to their obligations or those that never had the financial capability to stay in their business.''


And that's why we're going to give the banks all of this money!

[tal]

Spitzer’s editorial concluded, “When history tells the story of the sub-prime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably . . . it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. The administration was so willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.” Eliot Spitzer - 02/14/08

[vigilant]

I wish I had kept a running tally of how many times I have seen the threes pop up like this in financial articles over the last few months.




Canada's largest bank is at the top of the list for enforcement agents at the Securities Exchange Commission who are pursuing financial institutions implicated in the collapse of the $330-billion auction-rate securities market, according to two federal officials.
http://www.financialpost.com/story.html?id=832334



Some in the financial industry say stricter oversight is inevitable, as authorities try to protect banks from speculators. HBOS, the U.K.'s largest mortgage lender, fell 33 percent in three days last week, before it agreed to be bought by Lloyds TSB Group Plc in a deal encouraged by the government.

http://www.bloomberg.com/apps/news?pid= ... refer=home

[vigilant]

It looks like these hedge funds and trust funds that were hiding behind the CDO's were probably lying about how much money they were bringing to the table to play the game. It looks like they ran up enormous debts from borrowing from the international central banksters, kept the cash drawer cleaned out of the SPV buried in the CDO, and when it all collapsed, they just ran and hid. Now their game is stalled, and its stalled for everybody in the system. They can't play Monopoly with the world because they have their gameboard boogered up.

It is my impression, that not just anybody can get a CDO. You have to "be" somebody. Like be a "big" somebody with a trust fund or some source of access to wealth, or at least present yourself as such.

Since we know that banksters, most governments, and their ilk, do not routinely provide largs sums of money to people in distress, and they are foaming at the mouth to "help" the players in this game, it begs the question,

is "who" bailing out "who?" Who is on first, and who is on second, and who is on third? Same whos on all bases? Looks likely doesn't it?

Meaning, same guys with the buckets doing the bailing, were probably some of the same "whos" hiding behind the CDO's. Some of these turkeys probably owned some of these hedge funds themselves, or were heavily invested in some of these crashed boats. Created this mess in the first place. Problem is, now they have to figure out how to get the water bailed out of the boat, using someone elses (money) equipment, while keeping it a secret that they are actually bailing out their own boat...


Bailout Could Deepen Crisis; Firms Are Already Insolvent and Won’t Be Able to Keep Hiding It September 25th, 2008
That’s why Americans have to pay premium prices for this garbage.

Via: Washington Post:

The director of the Congressional Budget Office said yesterday that the proposed Wall Street bailout could actually worsen the current financial crisis.

During testimony before the House Budget Committee, Peter R. Orszag — Congress’s top bookkeeper — said the bailout could expose the way companies are stowing toxic assets on their books, leading to greater problems.

“Ironically, the intervention could even trigger additional failures of large institutions, because some institutions may be carrying troubled assets on their books at inflated values,” Orszag said in his testimony. “Establishing clearer prices might reveal those institutions to be insolvent.”

In an interview later yesterday, Orszag explained using the following example: Suppose a company has Asset X, whose value is recorded on the books as $100. Because of the current economic decline, Asset X’s real value has dropped to $50. If the company takes part in the government bailout and sells Asset X for $50, the company has to report a $50 loss on its books. On a scale of millions of dollars, such write-downs could ruin a company.

Such companies “look solvent today only because it’s kind of hidden,” Orszag said. “They actually are insolvent” already, he said.


Posted in Economy | Top Of Page | 2 Comments »


FDIC May Need $150 Billion Bailout as Local Bank Failures Mount September 25th, 2008

Via: Bloomberg:

By the end of 2009, about 100 U.S. banks with collective assets of more than $800 billion will fail, predicts Christopher Whalen, managing director of Institutional Risk Analytics, a Torrance, California-based firm that sells its analysis of FDIC data to investors.

“It’s not going to be Armageddon,” says Mark Vaughan, an economist and assistant vice president for banking supervision and regulation at the Federal Reserve Bank of Richmond, Virginia. “But it’s going to be bad.”

FDIC’s Secret List

The FDIC knows which banks are at risk; it has a watch list with 117 institutions. The agency won’t disclose their names because doing so could cause depositors to panic and pull out all of their funds.

It won’t take many more failures before the FDIC itself runs out of money. The agency had $45.2 billion in its coffers as of June 30, far short of the $200 billion Whalen says it will need to pay claims by the end of next year. The U.S. Treasury will almost certainly come to the rescue.

Regardless of who wins control of the White House and Congress in November, no politician is likely to vote in favor of leaving federally insured depositors out in the cold.

A taxpayer bailout of the FDIC would come on the heels of intervention by the U.S. Treasury Department and Federal Reserve to save investment bank Bear Stearns Cos., mortgage giants Fannie Mae and Freddie Mac and the world’s largest insurer, American International Group Inc.

[freemason9]

I like this one:

It's a $700 billion dollar bail out, according to the administration.

That's $700,000,000,000.

Thats a 7 followed by 11 zeros.

And then there's this:

Sarah Palin
Paris Hilton

and, of course,

John McCain
Joe Biden

I think I caught something from HMW.

[slimmouse]

I wish I had kept a running tally of how many times I have seen the threes pop up like this in financial articles over the last few months.

Im more fascinated by the timing of these events. I would say that the Bear Stearns takeover was the start of the mainstream exposure to this thing - Sprinq equinox,

And now of course this lot on the Vernal equinox.

Didnt one of the high and mighties once say that you wouldnt make simply millions, but Billions by following the markets and astrology ?

[vigilant]

Didnt one of the high and mighties once say that you wouldnt make simply millions, but Billions by following the markets and astrology ?


I'm not positive, but if my memory serves me correctly, I think it was J.P. Morgan.

He said anybody could become a millionaire, but in order to become a billionaire, you needed a damn good astrologist.

[geogeo]

[color=blue]Canada's largest bank is at the top of the list for enforcement agents at the Securities Exchange Commission who are pursuing financial institutions implicated in the collapse of the $330-billion auction-rate securities market, according to two federal officials.
http://www.financialpost.com/story.html?id=832334

HA! I KNEW CANADIAN BACON WASN'T REALLY A SPOOF. THOSE CANADIANS ARE TRICKY - PROBABLY BEHIND 9-11 TOO! I MEAN, THAT WHOLE "ABOOT" THING IS THE CLINCHER. WHO TALKS LIKE THAT? THEY'VE BEEN LITERALLY ON TOP OF US FOR HUNDREDS OF YEARS, AND NO ONE NOTICED? HOW CLEVERLY THEY HAVE BEEN DEFLECTING OUR WRATH SOUTHWARD TOWARD THE MEXICANS.

WAIT--MAYBE MEXICO AND CANADA HAVE CAUGHT US BETWEEN THEIR PINCERS? OH MY GOD.

[vigilant]

yep geogeo strawman heaven is opening up big time now. Its the evil canadians, short sellers, speculators, and the sorry ass american people that don't want to live up to their financial obligations or could never afford those loans they stole from the bank in the first place.

This shit is getting so damn comical that i just can't imagine where they will go next........

[vigilant]

You know its funny now jp morgan always seems to come out on top when financial horse shit hits the fan in this country. this bank was sucking it in on the last huge crash during the depression and now its so healthy during this bank failure that it plans to open new branches as it buys out the assets of the biggest bank failure in history. who ya reckon really owns jp morgan bank? who ya reckon jp morgan bank is a straw man for? its not hard to guess...........



WASHINGTON MUTUAL: LARGEST BANK FAILURE IN U.S. HISTORY
September 26th, 2008

It’s not even FDIC Friday yet in the U.S.

Via: Bloomberg:

JPMorgan Chase & Co., the third- biggest U.S. bank by assets, agreed to pay $1.9 billion for the deposits of Washington Mutual Inc. after the thrift was seized by regulators in the biggest bank failure in U.S. history.

The U.S. government closed Seattle-based Washington Mutual amid customer withdrawals of $16.7 billion since Sept. 15, the Office of Thrift Supervision said in a statement. WaMu had “insufficient liquidity” and was in an “unsound” condition, the OTS said.

WaMu’s fate played out as Congress tried to reach an accord that will ease the global credit crunch, which has already driven Lehman Brothers Holdings Inc. and IndyMac Bancorp out of business, and Bear Stearns Cos. and Merrill Lynch & Co. into hastily arranged rescues. WaMu in March rebuffed a takeover offer from JPMorgan that WaMu valued at $4 a share. In most bank seizures, little or nothing is left for shareholders.

“JPMorgan is getting a steal compared with what they were going to pay,” said Scott Adams, a pension and investment analyst at the American Federation of State, County and Municipal Employees in Oakland, California, which owns WaMu shares. “It’s very tragic.”

WaMu collapsed after its credit rating was slashed to junk and potential suitors passed on making a bid. Facing $19 billion of losses on soured mortgage loans, the lender put itself up for sale last week.

New York-based JPMorgan won’t acquire liabilities of the lender, including claims by shareholders and subordinated and senior debt holders, the Federal Deposit Insurance Corp. said.

JPMorgan Expands

JPMorgan said it is adding branches in California, Washington and Florida and will have 5,400 offices with about $900 billion in deposits, the most of any U.S. bank. The branches will carry the Chase brand and will be integrated by 2010, JPMorgan said. They will be open for business tomorrow as usual, the OTS said in its statement.

WaMu had about 2,300 branches and $182 billion of customer deposits at the end of June. Its $310 billion of assets dwarf those of Continental Illinois Corp., previously the largest failed bank, which had $40 billion ($83 billion in 2008 dollars) when it was taken over in 1984.

[vigilant]

i had to read this three times.........but i think i know what it says......


asset valued at 100
loses 50 - 50
gets bailout + B
sells 50 + 50 or actually minus a damn toxic 50

i'm pretty tired right now, so tired i can hardly stay awake, but isn't that ending up in the end

+B as in cha ching, dumped the toxic shit, made some + B money?




Bailout Could Deepen Crisis; Firms Are Already Insolvent and Won’t Be Able to Keep Hiding It
September 25th, 2008

That’s why Americans have to pay premium prices for this garbage.

Via: Washington Post:

The director of the Congressional Budget Office said yesterday that the proposed Wall Street bailout could actually worsen the current financial crisis.

During testimony before the House Budget Committee, Peter R. Orszag — Congress’s top bookkeeper — said the bailout could expose the way companies are stowing toxic assets on their books, leading to greater problems.

“Ironically, the intervention could even trigger additional failures of large institutions, because some institutions may be carrying troubled assets on their books at inflated values,” Orszag said in his testimony. “Establishing clearer prices might reveal those institutions to be insolvent.”

In an interview later yesterday, Orszag explained using the following example: Suppose a company has Asset X, whose value is recorded on the books as $100. Because of the current economic decline, Asset X’s real value has dropped to $50. If the company takes part in the government bailout and sells Asset X for $50, the company has to report a $50 loss on its books. On a scale of millions of dollars, such write-downs could ruin a company.

Such companies “look solvent today only because it’s kind of hidden,” Orszag said. “They actually are insolvent” already, he said.

[geogeo]

Last bank standing?

I've been predicting a JP Morgan Chase merger with Citibank for a long time. There are three giant conglomerates left in the US. How's it going to be? Predictions? I'm thinking because of the 'history' between Dimon and Weill, that Dimon will go for Weill. On the other hand I think they might still be friends... Where does that leave BoA?

[ninakat]

Ruppert:

http://www.mikeruppert.blogspot.com/

A Prediction

From sniffing around, I am beginning to suspect that Citigroup wil be the next to fall if the bailout isn't signed. If that happens, in my opinion, it will reveal the inevitability of (and perhaps trigger) the fast crash scenario. I don't see any way around it. It will provoke the biggest emotional shock wave in history. It will be a great moment of truth and make it possible to save infrastructure, personal wealth and lives. Fast crash leaves infrastructure functioning (in whatever degree) and we need that infrastructure to prepare. From what I just heard at ASPO, Global oil production could drop to 79 or even 78 G/bpd from this year's roughly 85. Nothing else need be said on that subject. Now is when the real lifeboat building begins. Anything before this was just practice.

MCR

[vigilant]

http://www.bloomberg.com/apps/news?pid= ... refer=home


Wall Street Executives Made $3 Billion Before Crisis (Update1)

By Tom Randall and Jamie McGee

Sept. 26 (Bloomberg) -- Wall Street's five biggest firms paid more than $3 billion in the last five years to their top executives, while they presided over the packaging and sale of loans that helped bring down the investment-banking system.

Merrill Lynch & Co. paid its chief executives the most, with Stanley O'Neal taking in $172 million from 2003 to 2007 and John Thain getting $86 million, including a signing bonus, after beginning work in December. The company agreed to be acquired by Bank of America Corp. for about $50 billion on Sept. 15. Bear Stearns Cos.'s James ``Jimmy'' Cayne made $161 million before the company collapsed and was sold to JPMorgan Chase & Co. in June.

Democrats and Republicans in Congress are demanding that limits be placed on executive pay as part of the $700 billion financial rescue plan proposed by U.S. Treasury Secretary Henry Paulson. The former Goldman Sachs Group Inc. CEO, who received about $111 million between 2003 and 2006, said in testimony to Congress on Sept. 24 that he would accept such limits as part of the plan, after initially opposing them.

``Shareholders and boards should have done something about this a long time ago,'' said Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware in Newark. ``They justified these levels of pay on the idea that they're all geniuses. I think that balloon has burst.''

Wall Street firms have shared profits liberally with employees. The five biggest -- Goldman, Morgan Stanley, Merrill, Lehman Brothers Holdings Inc. and Bear Stearns -- paid their 185,687 employees $66 billion in 2007, as problems with subprime mortgages mounted, including about $39 billion in bonuses. That amounts to average pay of $353,089 per employee, including an average bonus of $211,849. The five firms had combined net income of $93 billion during the five years through 2007.

CEO Pay Doubled

The $3.1 billion paid to the top five executives at the firms between 2003 and 2007 was about three times what JPMorgan spent to buy Bear Stearns. Goldman Sachs had the highest total, with $859 million, followed by Bear Stearns at $609 million. CEO pay at the five firms increased each year, doubling to $253 million in 2007, according to data compiled from company filings.

Executive-compensation figures include salary, bonuses, stock and stock options, some awarded for past performance. The options were valued at a third of the fair-market price of the stock at the time the options were granted, a method recommended by Graef Crystal, a compensation specialist and author of the Crystal Report on Executive Compensation, an online newsletter. The companies value the options using different methods.

`Make It Rain'

Wall Street firms have paid employees a greater share of revenue than any other industry, about 50 percent, Crystal said. That tradition at investment banks comes from their history as closely held partnerships of investors who put their own capital at risk, he said.

``In Wall Street and Hollywood, the profits tend to come in great big packets, and everyone wants a piece,'' said Crystal, a former Bloomberg columnist. ``Whether it's the movie `Dark Knight' or a huge merger deal, he who can make it rain, he who can bring everyone to the theater, can earn whatever he wants.''

Until the rain stops.

Lehman Brothers filed for the biggest bankruptcy in history on Sept. 15, with more than $613 billion in debt. The same day, Merrill Lynch was sold to Bank of America for $29 a share, about 70 percent below the stock's high of $97.53 on Jan. 24, 2007.

Goldman and Morgan Stanley, the two biggest independent U.S. investment banks, were forced to convert to bank holding companies, giving them more access to Federal Reserve funds and buying time to acquire deposits. Goldman Chief Executive Officer Lloyd Blankfein made $57.6 million in 2007 in salary and bonus, which includes stock and options granted at the beginning of the fiscal year to reward performance the previous year. Co- presidents Gary Cohn and Jon Winkelried each got $56 million.

`Tied to Performance'

Morgan Stanley's current and former chief executives, John Mack and Philip Purcell, were paid about $194 million over the last five years.

Mark Lake, a spokesman for Morgan Stanley, pointed to Mack's decision not to take a bonus for 2007 and said the $1.6 million in salary and other compensation he was awarded last year isn't ``a lot'' compared with other Wall Street CEOs.

``He has taken everything he had since rejoining the firm in equity, other than salary,'' Lake said. ``There's a difference in taking stock in the firm as a bonus and taking cash. Stock in the firm, obviously you are tied to performance of the firm.''

Goldman Sachs spokesman Michael Duvally declined to comment. Merrill Lynch spokeswoman Jessica Oppenheim, JPMorgan spokesman Brian Marchiony and Lehman spokeswoman Monique Wise didn't return calls for comment.

Paulson, Bush

``The American people are angry about executive compensation, and rightfully so,'' Paulson told a House panel on Sept. 24, departing from his prepared remarks. ``We must find a way to address this in the legislation, but without undermining the effectiveness of this program.''

President George W. Bush said that night in a televised address to the nation that the plan would provide ``urgently needed money so banks and other financial institutions can avoid collapse'' and ``should make certain that failed executives do not receive a windfall from your tax dollars.''

Congressional Republicans splintered late yesterday over the proposed $700 billion rescue plan. Senate Majority Leader Harry Reid said this morning at a news conference that Democrats are circulating a draft of legislation that contains limits on executive compensation and ensures that Congress has oversight over the bailout. Lawmakers from both parties are meeting again today in Washington.

Weak Record

The U.S. government has a weak record when it comes to regulating compensation, said Kevin Murphy, a professor of finance at the Marshall School of Business at the University of Southern California in Los Angeles.

``Every government attempt that has existed to limit or regulate CEO pay has backfired,'' Murphy said. ``I'm fairly confident this one will backfire too. There are always loopholes.''

Regulation of golden parachutes, or protection for executives in the case of an acquisition, were circumvented in the 1980s with severance agreements, and Nixon's wage-and-price- control experiment in the 1970s ultimately failed, Murphy said.

``It's either the compensation committee or the general counsel or the head of human resources who are trying to negotiate a pay package with someone who will be their boss in a week,'' he said. ``These are things that can be done a lot better.''

Corporate Governance

Rather than government regulation, the solution is in better corporate governance, Elson said. Companies should negotiate more aggressively with executives and should establish rules that encourage shareholders to protest excessive pay. The rescue package is not the place to have that debate, he said.

``This will get in the way'' of passing the $700 billion financial rescue legislation, Elson said. ``We are in a crisis. The patient is dying. Let's work on the details as soon as we get the patient out of the emergency room when we can do it in a thoughtful or deliberate manner.''

Not all Wall Street CEOs have escaped unscathed. Cayne sold a Bear Stearns holding once worth $1 billion for $61 million in March. Lehman's Chief Executive Officer Richard Fuld, who made $165 million between 2003 and 2007, sold 2.88 million of his firm's shares for 16 cents to 30 cents apiece, or less than $500,000, according to a regulatory filing.

Fuld owned 10.9 million shares and restricted stock units as of Jan. 31, valued at $931 million at their peak. He also had in- the-money options and other stock worth almost $300 million, according to Crystal.

To contact the reporter on this story: Tom Randall in New York at trandall6@bloomberg.net; Jamie McGee in New York at jmcgee8@bloomberg.net.