Oh how the mighty have fallen.

With Lehman Bros. in the midst of winding up what's left of its operations following its bankruptcy filing, chairman and CEO Richard Fuld has been kicked out of the corner office at Lehman's Manhattan headquarters -- and sent packing to to a 41st floor office at 1271 6th Avenue.

Lehman's building at 745 7th Avenue is now the headquarters for Barclays' investment banking operations. It has no use for Mr. Fuld. With a flair for drama, The Wall Street Journal sums it up (subscription required) this way: "Napoleon cooled his heels on Elba. The Dalai Lama lives in Dharamsala, India. And Lehman Brothers Holdings Chairman and CEO Richard Fuld Jr. will be banished to 1271 Sixth Ave."

Meanwhile former CFO Erin Callan -- who was pushed out as a sacrificial lamb back in July -- gave her first post-Lehman interview to Fortune, telling the reporter that Mr. Fuld had been brought to tears by the difficulties the company was facing.

If you're in the market for $15 million worth of Fuld's modern art collection, Christie's has got you covered.

In the wake of the collapse and bankruptcy of Lehman Br Holdings (OTC: LEHMQ), chairman and CEO Dick Fuld and his wife Kathy have begun selling off their prized collection of modern art.

The couple has been consigning parts of their collection to Christie's, the renowned auction house. 16 post-war drawings have been consigned with a pre-sale estimate of $15-$20 million. At its peak, Fuld's stake in Lehman was worth just under $1 billion, but those shares are now virtually worthless.

What does all this have to do with Lehman, the proposed bailout of the banking industry, and the economy? Nothing really. But at least it's now clear that the insiders will be suffering alongside taxpayers and foreclosed homeowners: Fuld has to part with $15 million worth of post-war drawings!

Who's going to buy that art, you ask? Perhaps hedge fund manager David Einhorn, who was one of the few people calling Lehman's bluff a few months ago, will drop a few bucks to redecorate his office.

Lehman Brothers CEO Dick Fuld has been in seclusion since the company's bankruptcy filing last week, but get out your popcorn and soda: he's set to be in Washington this week to testify before the House Committee on Oversight and Government Reform. Fortune's Patricia Sellers reports that "Fuld is supposed to explain what led to Lehman's collapse and explore the impact on financial markets and the U.S. economy."

For those of you who are playing along at home, there are essentially two possibilities for what Mr. Fuld will offer as an explanation:

• "I screwed up. We borrowed too much money to make bad investments that we didn't understand, and when the crap start to hit the fan, I was dumb enough to buy back stock instead of raising cash. Can you believe that? I take full responsibility for this mess and, no, I'm not giving back my money."
• "My company was destroyed by mean nasty short-sellers who spread mean nasty rumors about the company, and then drove down the stock through naked short-selling. If the SEC would have reined in market speculators and manipulators, we would still be alive and I'd still have that cushy leather desk chair."

I'm going to go out on a limb and suggest that Fuld's explanation will be mainly the latter. But take it with a grain of salt: when former Enron CEO Jeff Skilling was hauled before Congress to explain that company's collapse, he said that "It is my belief that Enron's failure was due to a classic run on the bank, a liquidity crisis spurred by a lack of confidence in the company."

But the reality is that Enron and Lehman filed for bankruptcy protection because they didn't have enough assets to cover their liabilities. Period. And it's wrong to blame that on the few short-sellers who were prescient enough to see through optimistic and misleading "forward-looking statements."

The Observer reports that Lehman Bros. (NYSE: LEH) CEO Richard Fuld could be out of a job by the end of the year. The Observer states that "Whether a Lehman suitor emerges or not, well-placed sources within the bank are certain that Fuld is set to hand over the reins before the end of the year. 'He is involved less and less with day-to-day executive affairs, and his credibility is shot,' one senior Lehman source said."

The sources for the story are extraordinarily vague, and even if they are reasonably credible, it's hard to imagine who would be able to say with certainty that Fuld is on the way out.

It's not a difficult rumor to believe. The incredible part is that Fuld hasn't already been ushered out to a cushy retirement with a thoroughly undeserved severance package. The stock is off more than 80% in 2008, and Lehman's future as a stand-alone public company is very much in doubt.

While Fuld's firing would obviously be well-deserved, it's probably too late for it to matter one way or another. The distraction and expense of paying him to go away and finding someone else with nothing better to do than leap aboard a sinking ship makes it hard to say whether his departure would even do shareholders any good.

Goldman Sachs (NYSE: GS) reported earnings today, and while revenue and profit were -- not surprisingly -- down from a year ago period (but higher compared to the previous quarter), it actually had profits to speak of, $2.09 billion of them to be exact. Indeed, Goldman did it again, surpassing Wall Street expectations for a profit of $3.42 per share on $8.74 billion of revenue with a profit of $4.58 per share and revenue of $9.42 billion.

It would be only natural to ask how Goldman made $2 billion while Lehman lost $2.8 billion. The answers are many, not the least of which is size: Goldman is the world's biggest securities firm, Lehman Brothers (NYSE: LEH) is the smallest among the four Wall Street investment banks. Other factors could include better hedging, financial decision making, diversification, management and strength of balance sheet.

To get a feel of the differences in numbers, Goldman currently holds about $14 billion of leveraged loans, down from $52 billion at their height less than a year ago in August. Residential mortgages, which include the subprime loans, have fallen to about $15 billion on Goldman's balance sheet from $19 billion last quarter. Lehman Brothers' portfolio of mortgages, including commercial loans, stood at $60.8 billion. It also has about $18 billion of leveraged-buyout loans. It is no wonder CEO Fuld took ten minutes at the beginning of the conference call to take responsibility.

Bear Stearns-(NYSE-BSC) volatility Elevated at 56; above 26-week average of 31. BSC is recently down $5.78 to $115.49. BSC August & September option implied volatility of 56 is above its 26-week average of 31 according to Track Data, suggesting larger price movement.

Lehman Brothers Holdings, Inc. (NYSE: LEH) volatility Elevated at 55, above 26-week average of 30. LEH is recently down $2.47 to $59.56. LEH call option volume of 16,716 contracts compares to put volume of 18,651 contracts. LEH August & September option implied volatility of 55 is above its 26-week average of 30 according to Track Data, suggesting larger risk.

Volatility Index S&P 500 Options-VIX up 1.34 to 24.86.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.