First went Bob Diamond, who snapped up Lehman's U.S. securities business for Barclays, and who stepped down at the beginning of July after his bank agreed to pay $450 million to settle an investigation into its efforts to manipulate interbank lending rates.

Next fell Nomura chief executive Kenichi Watanabe and chief operating officer Takumi Shibata—who led Nomura's deal for Lehman's European and Asian units—amid an insider trading scandal that roiled the Japanese firm.

This week, it seemed, Barclays and Nomura appeared to pare back their respective global ambitions in tandem. Barclays was first again, naming retail banking chief Antony Jenkins to replace Mr. Diamond as chief executive; Mr. Jenkins told Bloomberg that he was"very confident" about the investment bank, and has previously spoken in favor of the universal banking model. Nontheless, Mr. Jenkins becomes the only CEO of a global, universal bank without an investment banking background, raising speculation that Barclays would back away from Mr. Diamond's quest to build a premier investment bank—a quest defined in part by the Lehman acquisition.

Nomura followed suit today, announcing $1 billion in cost cuts in its wholesale unit in a move that marked a retreat from the play for increased global importance hinged on Mr. Fuld's sloppy seconds. Like Mr. Jenkins, new Nomura CEO Koji Nagai has a background that would suggest a more humble strategy: According to The Times, Mr. Nagai "spent most of his career focused on Nomura’s domestic operations"; last month, Mr. Nagai said he plans to reduce the firm's footprint “to an appropriate size.”

(Carolyn Kaster/AP)

Simple Sandy: Former Citigroup chairman and CEO Sandy Weill went on CNBC yesterday and said we'd all be better off if banks split off their investment banking units. That was a little like Joe Camel swearing off cigarettes, a friend quipped, for Mr. Weill was the driving force behind the creation of the "supermarket" banking model in the 1980s and 1990s. But the banking boss has been simplifying his entire life lately, selling off his penthouse at 15 Central Park West last year, and spending more time in California. "I think that simpler is better. But my life is still not very simple," Mr. Weill told CNBC's Robert Frank.

Drab banking: "There's no sexiness, there's no fun, there's no intellectual intrigue" in banking these days, a former Credit Suisse and Bear Stearns trader tells Bloomberg.

Geithner didn't know...About the "specific conversation" in which a Barclays employ told the Federal Reserve Bank of New York that the British lender wasn't posting an honest Libor rate as early as 2008. Mr. Geithner, who headed the New York Fed at the time and is now Treasury secretary, told the House Financial Services Committee yesterday that he thought the FRBNY took appropriate action by sharing its Libor-related concerns with U.S. and U.K. regulators.

New odds on Grexit: Citigroup economists hung a 90 percent chance on Greece leaving the euro in the next 12 to 18 months.

Pain in Spain: Banco Santander, Spain's largest lender, said profit fell 93 percent in the second quarter as the bank set aside more cash to offset soured loans.

Libor-ated: Employees at Lloyds Banking Group have received subpoenas as parts of investigations by regulators across the globe into the manipulation of Libor and other interbank lending rates, the company said yesterday in announcing second-quarter earnings. Until those investigations have run their course, the bank doesn't see a need to set aside funds to settle civil lawsuits arising from the matter, executive George Culmer told investors on a conference call.

Look out below: Zynga plummeted 37 percent in trading after the close of New York markets yesterday, as the firm announced disappointing second-quarter results. Key Zynga partner Facebook announces earnings today.

Tax hole: The official in charge of multinational effort to tax offshore accounts questioned a report released last week that rich individuals are hiding as much as $32 trillion. "I was wondering where the equivalent of 450 Bill Gates are hiding from everyone," OECD official Pascal Saint-Armans told Reuters.

"This seems extreme," Tonucci wrote in an e-mail on June 12 to Moody's executive Blaine A. Frantz. "Is there any way to appeal?"

It’s funny now, when Moody’s action—it placed a negative outlook on Lehman’s debt on June 9, and put the bank’s A1 rating on downgrade watch on June 13—looks anything but extreme. Even Fitch, which took a stronger stance when it downgraded Lehman to A+ from AA- on June 9, would seem restrained three months later, when Lehman’s debt was slashed to junk status following the firm’s disastrous third quarter.

Well, the story from there has been told and retold. What we read in documents from the Lehman Chapter 11 is a company in middle stages of desperation: If Fuld and Tonucci couldn't convince the ratings companies, at least the executives might convince themselves.

Again from the desk of Tonucci, this time to Fitch managing director Eileen A. Fahey, after receiving a draft of the press release announcing the imminent downgrade:

Fahey's response:

Christine Packles and her husband Aaron, a managing director at Merrill Lynch, had bought the place in June 2007 for $9.75 million, and they put it on the market in January 2009 for $12.95 million. A bold flip, especially as the sky was falling, which led to that "aggressive" price cut two months later, to $9.95 million.

Yet try as the Packleses might, this bull turned out to be another bear, and a plodding one at that.

The couple have finally sold their full-floor, 11-room
spread, and, despite all that waiting, they have had to settle for selling at a loss, hitting an even $9 million, according to city records. The buyers are Joseph Samuels, a Merill Lynch alum, and Erica Samuels, the co-founder of cleverly named four-year-old art consultancy Art & Advisory.

Just off Park Avenue, 79 East 79th Street is an attractive if unremarkable prewar co-op with one unit to a floor. The ninth-floor home has views of the Park down the block and an especially large dining room--perfect for art parties. The living room and library boast fireplaces, and there are four bathrooms. "This offering represents a rare opportunity to acquire a classic pre-war home in meticulous, just renovated condition, with beautiful hardwood floors, new windows, full air conditioning, custom fitted closets," writes Brown Harris Stevens' Kathryn Steinberg in her listing; she had a co-exclusive with Corcoran's Wendy Sarasohn.

The Samuelses had been living at 11 East 68th Street, according to the deed, where rents command $35,000 per month for a six-bedroom. Meanwhile, the Packleses list an address one block east of their old home, at 175 East 79th Street. The co-op's two-bedrooms trade for around $2 million, and Carter Horsley calls the building "pleasant." Put another way, not aggressive.

Read past Manhattan Transfers here. >>

mchaban [at] observer.com | @mc_nyo

White-collar defender Lewis Liman is representing ex-CFO Ian Lowitt. Lowitt replaced Erin Callan in June of 2008. Callan, as well as ex-CEO Dick Fuld and Christopher O'Meara, another former CEO, are under investigation, according to The Journal. The cost of legal defense for the former executives may reach $55 million by October. The company's outside auditor, Ernst & Young, is also under SEC scrutiny.

At issue, as usual, is the Repo 105 accounting trick wherein a firm masks a short-term loan as an asset sale. Lehman was quite fond of shuffling its assets around right at the time it was due to report quarterly earnings, potentially hiding as much as $50 billion in assets.

The FCIC's hearings last week had already revealed some cracks in Federal Reserve Chairman Ben Bernanke's heretofore oft-repeated contention that an intervention by his agency to prevent a Lehman failure was illegal and therefore impossible. Last week, Bernanke added that, even taking into account extralegal measures, the Fed was powerless to prevent Lehman from going belly up.

Some emails published and excerpted over at The New York Times' DealBook bolster the case that Bernanke, then-Treasury Secretary Henry Paulson, then-New York Fed chief Tim Geithner and others faced some political pressure to hang Lehman out to dry. Ex-Lehman CEO Dick Fuld has emphatically voiced his suspicions that Lehman was singled out by officials as sacrifice to public anti-bailout sentiment.

The emails reveal some discussion of public perception of a prospective Lehman intervention, but perhaps the biggest bomb from the meeting is an email from Bernanke, which says, "In case I am asked: How much capital injection would have been needed to keep LEH alive as a going concern? I gather $12B or so from the private guys together with Fed liquidity support was not enough." As Lehman sunk, top officials whose job it was to ensure the stability of the financial system, had little idea what the cost of saving Lehman would ultimately be.

In hindsight, we know that the added market dysfunction created by the Lehman blowup imposed tremendous costs to the economy, and there's a growing consensus that extraordinary measures to save it were probably justified. At the time, though, policymakers were mainly confused and indecisive in the face of the tremendous crisis.

It didn't help that Mr. Rattner was ensnared in the billion-dollar New York State pension fund scandal. Those problems haven't gone away, in fact they only seem to have gotten worse, but Mr. Rattner's book is finished. And, according to an advance manuscript that was sent to the Observer this morning, it looks awfully interesting.

So far, this reporter has read just the opening and the finale, which, normally, is a terrible and book-ruining thing to do. It was excusable in this case, especially because of a three-page acknowledgement passage that is one of the all-time greats.

For starters, the book—whose cover features very serious expressions from Larry Summers, Tim Geithner and President Obama, but not our author—has an alluring table of contents. "Dead Man's Curve" is Chapter One, "Mr. Rattner Goes to Washington" is third, followed by "F**k the UAS," and later "Harry Wilson's War" and "The Chief Executive Shuffle" for the finale. There is a six-page character list, followed by a prologue that opens up with the image of Obama body man Reggie Love watching Tiger Woods in March 2009, who was "then still respectable and heroic." Was Mr. Rattner referring to himself metaphorically? Probably not.

The book, which was written with the help of a Fortune editor, a Team Auto colleague, a financial journalist and four others, begins with lovely turns of phrase. The Oval Office on weekends was filled with "T-shirts and jeans worn by unshaven, sockless men." The president "had the air of a man in the business of calmly executing." General Motors and Chrysler were being "fed intravenously" with cash. And Governor Jennifer Granholm's' voice "barely rose above a whisper," but "a chorus of anxious voices crackled through the speaker" during a conference call with senators.

The book, which comes out next month, and was sent without an embargo, is up to date. Mr. Rattner writes that he was disappointed with Ed Whitacre, who just announced he was stepping down, despite a promise "to see GM through its initial public offering." He is also annoyed that Dan Akerson will be both chairman and CEO, which means the roles won't be separated as he had hoped.

Still, working with "such a talented and collegial group of extraordinary individuals has been the high point of my career," he says. Geithner and Summers were "available, supportive, and decisive," and "servants of the highest order and integrity." And other government people? "Contrary to what some Americans may think," he writes, "the Treasury is blessed with a large array of talented and dedicated staff members."

He saves his best for a close friend. "I pay particular tribute to Mayor Michael R. Bloomberg, who truly knows the meaning of loyalty and standing up for people you believe in." Despite Mr. Rattner's pension fund problems, Mr. Bloomberg has stuck by his side: "It’s certainly true he’s not moving away from Steve," a source told The Observer for the March story.

After that thank-you comes a glorious list of names "to whom I am equally grateful." In order of appearance, just a few of those names are The Times' Michiko Kakutani (he calls her Michi), Ambassador Richard Holbrooke, billionaire Barry Diller, Clinton adviser Vernon Jordon, JP Morgan's Jes Staley, billionaire Leon Black, Senator Chuck Schumer, billionaire David Rubenstein, Harvey Weinstein (thanked twice, actually), Bear Stearns' Warren Spector, billionaire Jerry Speyer, billionaire Mort Zuckerman, Barbara Walters, Lehman's Dick Fuld, The Times' Arthur Sulzberger, the Mets' Fred Wilpon, and Harvard's Skip Gates. He doesn't bother with the Henry Louis part.

• First of all, "the incorrect perception and accompanying rumors that Lehman did not have sufficient capital to support its investments."

• Unfair treatment by the government: "Lehman was the only firm that was mandated by government regulators to file for bankruptcy."

• The Fed should've opened its funds window to supply liquidity to the financial system. "I believed then, and still do now, that had the Fed opened the financing window to investment banks just before the Bear Stearns problem, that decision might have provided the necessary liquidity to keep Bear Stearns operational and, more importantly, might have lessened the need for additional government intervention."

• The government should've let Lehman turn itself into a bank holding company (it later did this with Goldman Sachs and Morgan Stanley)

• The government should've banned naked short selling (it did this after Lehman's bankruptcy filing)

Then Fuld brings it on home:

In the end, however, Lehman was forced into bankruptcy not because it neglected to act responsibly or seek solutions to the crisis, but because of a decision, based on flawed information, not to provide Lehman with the support given to each of its competitors and other nonfinancial firms in the ensuing days.

• Wall Street, long known for its adoration of Barack Obama, has gotten over its presidential crush, thanks mainly to the commander in chief's insistence on strict regulation of financial services. [NYT] 

• A section of the Dodd-Frank financial reform bill will force companies to say by how many orders of magnitude their executives' pay dwarfs that of the typical workaday grunt. CEOs have concluded that this law will create a "logistical nightmare." Long division is difficult! [Financial Times] 

• On a related note, a recent survey indicates companies are planning on granting meager pay increases to employees in 2011. Those plans, however, depend on whether the economy emerges from the sinkhole in which it currently resides. [MarketWatch] 

• Ben Bernanke, Dick Fuld, Sheila Bair and Robert Steel will gather this week for a two-day Panic of 2008 Reunion Concert hosted by Congress' Financial Crisis Inquiry Commission. They'll play renditions of such classics hits as "Too Big to Fail," "Financial Meltdown," and "So Long, Lehman Brothers." [Reuters]

• "Robo-tripping," also known as "skittling" -- the practice of teenagers getting high on Robitussin -- is the latest moral panic, and so regulators may place additional controls on cough medicine. Pfizer and Johnson & Johnson, two of America's leading dextromethorphan dealers, think additional regulation would place an unnecessary burden on law-abiding syrup swillers. [Bloomberg]

Avoiding getting shot, for starters. The last time Fuld granted an interview, all the way back in November 2008, he greeted a Reuters reporter with, "You don't have a gun. That's good." And at a meeting with Lehman managing director Ken White, Fuld asked him, "You're not going to shoot me, are you?"

Although Fuld's worries about assault at the hands of gunmen disguised as journalists and former colleagues may be a little excessive, there are still plenty of people gunning for him in a figurative sense. The SEC, the Department of Justice and others are hot on his trail, and he's been working what sounds like 12-hour days at his firm, Matrix Advisors, to help him fight a legal onslaught: "Many in Fuld's circle believe that he would not be working so hard if he did not need the money to pay for his luxurious lifestyle and ongoing legal bills related to Lehman's collapse."

Fuld is also learning to tone down his profile and live on a more modest budget—which is to say he's taking commercial flights (instead of a private jet) to and from estates in Sun Valley and Jupiter Island. But further details on Fuld are scattered and opaque, thanks to strict orders from his attorney not to talk. He's got millions, but how many is unclear, and it's unlikely that we'll find out for sure until litigation against him ramps up in public. Dead men tell no tales, and in that sense, Fuld is acting like one of those imaginary assassins has already gotten to him.