In a marvelous twist to the short selling story, the hedge funds roll out the 'have your cake and eat it' defence.....

This bail-out does bring us back to the moral hazard issue, but it also provides a perfect excuse for the government (whoever that may be in the upcoming elections) to bring in regulations like we have never seen before. Personally, and those who read our comments will know, we are positive about the regulatory system in general.

Amid all the whining about favoritism for other banks and the failure to prop up Lehman, we should remember the words of the character Gordon Gecko in Wall Street - "..you either get it right or you get eliminated". It is sad to see Lehmans go but we all, as bankers, spout the mantra of 'survival of the fittest', we should not be surprised when natural selection comes back to bite...