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Fire Fuld? (Updated)

Fuld has ditched his CFO and COO, but should he himself follow in the footsteps of Stan O’Neal, Chuck Prince, Marcel Ospel, Mark Litzler and Wachovia’s Ken Thompson?

At the very least, Dick has proven short-sighted.

In April, he declared the worst of the credit crunch to be past. And last month the now departed Erin Callan told CNBC that Lehman would have no need of raising additional cash.

Needless to say, this is no longer the case. Lehman has now posted a huge $2.8bn Q2 loss, is raising (or at least trying to) another $6bn and announced its quarterly results early after its stock plummeted 48% last Monday.

There’s also a slight whiff of ineptitude (or it confusion?). On one hand, Lehman has ditched $120bn of illiquid assets in an attempt to bolster its balance sheet. On the other, it appears to have squandered precious capital trying to prop up its share price.

Lehman came perilously close to the edge under Fuld’s stewardship in 1998, when the bank’s shares plunged 50% following the Russian crisis. The precipice is now in sight again.

Is Fuld’s apparent blindness compounding the risk that Lehman will fall? Or is he still the best man to navigate a return to safer ground? Dump or defend Dick below.

Comments (11)

  1. In 1998 Fuld made the mistake of not taking Lehman’s position seriously enough. He has learnt from that – Lehman has done everything it can to raise cash and the balance sheet is sound. This is not Bear Stearns and Fuld is not James Cayne. He is the right man for this moment.

  2. Firing Fuld would be the WORST thing Lehman could possibly do right now. This is a guy who has been at the bank for the past decade and commands the respect needed to bring it back from the brink. Who the hell would replace him? Erin Callan? Yeah right.

  3. Makes one wonder what has happened to Lehman’s celebrated risk culture.

  4. Of course he should be fired, he has headed a bank that has fired others, many of whom have done a good job, and promoted others who have done a bad job, evidently. He is responsible for the mess. There is little to suggest he has the skills to get them out of the situation they are in. He is tainted character. There are others at the bank who have the skills to lead Lehman’s.

  5. He should be fired! He withheld information about the bank exposure and then tried to create the impression that everything was under control at Lehman. No one can convince me that he did not know about the toxic waste that was on the balance sheet. It was just a timing decision when to let the sh*t hit the fan. He was hoping to get away with it by denying it till the very last moment. He should go as should others around him. The really important question is how to claw back all these bonuses that the management was awarded for undue risk taking.

  6. fire joh varley. He has made a mess of barclays share price and doesn’t want to come clean with the capital raising. all the dumb money has dried up and he has no choice but to issue a rights issue. and he is thinking of buying UBS? what crap. Fire the man

  7. Fuld getting rid of Callan stinks of desparation and finger pointing. Where was he while she was telling everyone everything was fine and Lehman had no need of extra cash? And what is going on with that extra cash by the way? Anyone?

  8. The mistake was Fuld’s. He was the man who leveraged Lehaman up and loaded it with dud debt when things were good. He is the man who should go now that things are bad. Callan wasn’t up to much either though.

  9. Bart McDade is the man to replace Fuld, now.

  10. Fuld cannot distance himself from Gregory. They were big pals and there’s no way Gregory would have done something without Fuld’s say. Dumping him is a crass case of self-preseveration.

  11. I find it fascinating that anyone finds this blurbsome rambling about who knows who interesting enough to publish or comment upon.

    Whilst all very cosy for those in the circle of acquaintance, outside that circle, including investors and Financiers, there is zero interest in the rather turgid gossip. Indeed such idle chatter highlights very clearly the vanity of banking circles and indeed the demise. Vanity is all very well in it’s place, at the bathroom mirror. In the world of business, business must be done. Focusing on individual gain does not make money.

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