Freddie Mac CFO hangs himself

[mustang84]

Not a good sign...

Executive at Freddie Mac Is Found Dead

By CHARLES DUHIGG

Published: April 22, 2009

David B. Kellermann, the acting chief financial officer of the troubled mortgage giant Freddie Mac, was found dead Wednesday morning at his home in Northern Virginia, the police said.

The executive apparently committed suicide by hanging himself, according to people with knowledge of the investigation.

A spokeswoman for the Fairfax County police said there were no signs of foul play. A police spokesman said that they would not comment on whether a note was found, but did say that no files or anything except the body have been removed from the house.

Police were called to the home at 4:48 a.m., reportedly by Mr. Kellermann’s family. His body was taken away by the Fairfax Coroners Office shortly before 9 a.m. By then, the large home about 20 minutes outside Washington was surrounded by eight television trucks and about two dozen reporters. When a neighbor in a car inquired what had happened, and was told of Mr. Kellermann’s death, she began screaming and drove away.

Mr. Kellermann, 41, had been Freddie Mac’s chief financial officer since September. He was named to the position when the federal government seized the company and ousted its top executives last fall. In recent weeks, according to neighbors and company officials, Mr. Kellermann had received a bonus of about $800,000. Such bonuses — which totaled $210 million for executives at Freddie Mac and its sibling company Fannie Mae — caused some controversy earlier this month, and some lawmakers called for them to be rescinded.

According to neighbors, Mr. Kellermann hired a private security firm after reporters came to his house to ask about his bonus.

Mr. Kellermann was also involved in recent tense conversations with the company’s federal regulator over its public disclosures. Freddie Mac executives wanted to emphasize to investors that the company was being run for the benefit of the government, rather than shareholders.

The company’s regulator, the Federal Housing Finance Authority, had reportedly pushed to play down that language. Freddie Mac ultimately reported that it made changes to business practices to help the government that “have increased our expenses or caused us to forgo revenue opportunities."

Mr. Kellermann’s death is the latest blow to the company. The chief executive, David M. Moffett, resigned last month after apparently clashing with the company’s regulator over compensation issues and independence.

In a statement, the interim chief executive of Freddie Mac, John A. Koskinen, said the company was saddened by the news of Mr. Kellermann’s death.

“We extend our deepest condolences to David’s family and loved ones for this terrible personal tragedy,” Mr. Koskinen said, adding that Mr. Kellermann would be “be most remembered for his affability, his personal warmth, his sense of humor and his quick wit.”

Freddie Mac and Fannie Mae, which together own or back more than half of the home mortgages in the country, have been hobbled by skyrocketing loan defaults and have received about $60 billion in combined federal aid.

http://www.nytimes.com/2009/04/23/business...tml?_r=1&hp

[balthazar]

I recall late last year that, in a radio discussion RE the current situation vs the Great Depression... that one significant difference (of many) why things now are not nearly as bad as then, was that then, people were throwing themselves out windows to their deaths.

Edited April 23, 2009 by balthazar

[ocnblu]

Wasn't there a Senator or somesuch who suggested these bank officers "follow the Japanese lead" and either resign or kill themselves? That pompous bastard got his wish, didn't he.

[K.C.]

Sad. It's just sad all the way around, for all involved.

[Oracle of Delphi]

I recall late last year that, in a radio discussion RE the current situation vs the Great Depression... that one significant difference (of many) why things now are not nearly as bad as then, was that then, people were throwing themselves out windows to their deaths.

Give it time ...

[daves87rs]

Just sad.

While I am mad, but nobody should die....

[gm4life]

Wasn't there a Senator or somesuch who suggested these bank officers "follow the Japanese lead" and either resign or kill themselves? That pompous bastard got his wish, didn't he.

That is my Senator, a man I have voted for and support.

[balthazar]

>>"Wasn't there a Senator or somesuch who suggested these bank officers "follow the Japanese lead"... "<<

There was such a clueless fool, yes. Irony: FM/FM are gov entities, with gov-appointed leadership- so he damned himself, in effect.

Can you smell the implosion the gov is cooking??

[Justin Bimmer]

I think the media is trying to call this "The Great Recession" which MEANS THE SAME FU#@!*G THING AS GREAT DEPRESSION! Kind of like Guerrillas and Insurgents

[ShadowDog]

Yay money! How well you treat the world.

Maybe we should all just go back to trading beaver pelts?

[Robert Hall]

Wasn't there a Senator or somesuch who suggested these bank officers "follow the Japanese lead" and either resign or kill themselves? That pompous bastard got his wish, didn't he.

I think it would have been quite appropriate to see the CEOs/etc of the corrupt financial firms jump off (or be pushed off) the top of NY high rises...people would be cheering in the streets.

[Justin Bimmer]

I think it would have been quite appropriate to see the CEOs/etc of the corrupt financial firms jump off (or be pushed off) the top of NY high rises...people would be cheering in the streets.

They have no souls. So I would not expect them to kill themselves.

[Teh Ricer Civic!]

I think the media is trying to call this "The Great Recession" which MEANS THE SAME FU#@!*G THING AS GREAT DEPRESSION! Kind of like Guerrillas and Insurgents

Pfft, what a load of bunk. This is not even close to the Depression and besides do you know who has been responsible for the depression, the inflation of the 70s and today's recession?? THE FEDERAL RESERVE.

There is a reason the constitution puts the power to print money in congresses hand and not some private entity, which the Federal Reserve somewhat is.

Edited April 23, 2009 by Teh Ricer Civic!

[PurdueGuy]

Yay money! How well you treat the world.

Maybe we should all just go back to trading beaver pelts?

greed will screw people over no matter what the currency is.

[trinacriabob]

Some exec at fallen Enron did the same thing...but with a gun.

That's how the movie "The Smartest Guys in the Room" starts out. (PCS, a lot of aerial views of Houston...you'd like it).

I really think that living a fairly simple life, without all this ridiculous excess, is the best thing. The "mucky mucks" who are at the top of the pyramid and make the big bucks can keep their stress...I'll just drive my GM cars to scenic places, eat well or take in a buffet, and compute my mileage.

[daves87rs]

greed will screw people over no matter what the currency is.

+1

[Drew Dowdell]

Wasn't there a Senator or somesuch who suggested these bank officers "follow the Japanese lead" and either resign or kill themselves? That pompous bastard got his wish, didn't he.

I happen to agree with him whoever he was. There is ZERO responsibility at the executive level at these banks. Just the other day there was an article where some bank exec was complaining that because he went to a fancy college he should get to collect a high salary regardless of what the economy or his company are doing.

[Robert Hall]

I happen to agree with him whoever he was. There is ZERO responsibility at the executive level at these banks. Just the other day there was an article where some bank exec was complaining that because he went to a fancy college he should get to collect a high salary regardless of what the economy or his company are doing.

Agreed...these companies get government bailouts, yet the 'leaders' that led them into bad shape are often keeping their jobs. They need to be held accountable for their incompetence and corruption.

[balthazar]

Fed Gov officials are NO BETTER- they never get arbitrarily replaced by an overseer, never are called on the carpet to answer 'witch trial' questions, are even more out of touch that corporate executives, execute failure after failure yet still get LIFETIME salaries and 100% healthcare, PLUS they vote their own pay raises in. Where's the 'board of directors' for Congress ?? Throw them the f**k off the building too, but first and head first.

>>"Just the other day there was an article where some bank exec was complaining that because he went to a fancy college he should get to collect a high salary regardless of what the economy or his company are doing."<<

Just the other year Barney Frank was assuring everyone that there was no impending crisis in the housing market. He take any pay cut, face being fired, field public outcry over his job performance? Not a chance- instead he gets even more power.

[CaddyXLR-V]

I happen to agree with him whoever he was. There is ZERO responsibility at the executive level at these banks. Just the other day there was an article where some bank exec was complaining that because he went to a fancy college he should get to collect a high salary regardless of what the economy or his company are doing.

How many CEOs of the banks that were bought by other banks kept their positions? Which bank exec was that? I follow the sector closely, and I haven't seen it.

[Drew Dowdell]

How many CEOs of the banks that were bought by other banks kept their positions? Which bank exec was that? I follow the sector closely, and I haven't seen it.

I'll see that and raise you a "Golden Parachute"

[CaddyXLR-V]

I'll see that and raise you a "Golden Parachute"

The Merrill Lynch deal was basically forced by the government, and Ken Lewis is taking heat for deceiving shareholders, even when the government forced him to be quiet. Some of the CEO's should rightfully take the blame. What I don't agree with, is when people say all bank CEOs are crooked, and ALL are to blame, because that is not true. There are always going to be ups and downs, it's inevitable. The better run banks will actually be stronger because of this. There is actually some good coming out of this depression also. People are paying down credit card debt, and there is change starting in peoples spending habits.

[Drew Dowdell]

There is actually some good coming out of this depression also. People are paying down credit card debt, and there is change starting in peoples spending habits.

No, not all CEOs are bad, but of the bad ones few, if any, have taken any responsibility for their company's actions. If they do leave the company, it's usually with a handsome bonus.

As far as paying down credit debt and changing spending habits.... these are good things in a vacuum, but it will end up dragging this depression out longer.

I've maintained for a while that instead of giving all of this money to the banks, the government should have just given everyone in America $10,000 with the stipulation that it be used to pay down debt first. It would have immediately recapitalized the banks while also wiping out the debt of the American consumer so they could start buying again. If you're going to inflate the currency anyway, at least do it in a way that benefits the most people.

[Sixty8panther]

There is a reason the constitution puts the power to print money in congresses hand and not some private entity, which the Federal Reserve somewhat is.

somewhat?

It's 99.99999% "private"

[Oracle of Delphi]

somewhat?

It's 99.99999% "private"

+1

[CaddyXLR-V]

No, not all CEOs are bad, but of the bad ones few, if any, have taken any responsibility for their company's actions. If they do leave the company, it's usually with a handsome bonus.

As far as paying down credit debt and changing spending habits.... these are good things in a vacuum, but it will end up dragging this depression out longer.

I've maintained for a while that instead of giving all of this money to the banks, the government should have just given everyone in America $10,000 with the stipulation that it be used to pay down debt first. It would have immediately recapitalized the banks while also wiping out the debt of the American consumer so they could start buying again. If you're going to inflate the currency anyway, at least do it in a way that benefits the most people.

Don't blame the banks for that. The 2 top banks in the country didn't want the money, it was forced on them. BofA most likely wouldn't have needed any money either, until the Merrill Lynch deal was forced on them. I believe they saw the losses and wanted to back out, but they weren't allowed to. The govt probably just told them to buy Merrill Lynch, and we will give you the capital you need if you need it. When they got the additional 20B, everyone put them in the same boat as Citi, when they really were/are not the same.

The govt is playing both sides. Forcing the banks to do something against there will, then directing the anger of the public towards the banks for doing it. Could that be a source of stress for CEOs and CFOs?

[Teh Ricer Civic!]

somewhat?

It's 99.99999% "private"

Well sixty you gotta win over the less libertarian people subtly... Besides its more like 90% private

But yeah, i find it funny that people aren't blaming the government for this mess and instead are blaming CEOs... and its not even really partisan, its A) unbalanced spending (Bush and Obama are both guilty of this) and B) The Federal Reserve.

I find it sad that people get so tied up in the Us vs Them Democrat vs Republican crap that they fail to see the real causes of our economic swings.