Goldman and Morgan can only blame

Bank bosses. Don't you just love 'em? The heads of Morgan Stanley, Goldman Sachs and the rest have been sternly condemning the evil short sellers in hedge funds for wreaking havoc on their share prices, spreading panic among counterparties and generally being beastly.

But wait a minute... Who is it who has been lending most of these hedge funds the money in the first place? The very same Morgan Stanley and Goldman Sachs — the latter is widely said to have given seed capital to more hedge funds than any other bank on Wall Street. Many of the funds are run by ex-traders of Morgan and Goldman, and proudly count the banks as being among their biggest investors. Hmmm...

* How does Philip Collins, chairman of the Office of Fair Trading, feel about seeing competition rules torn up in his face? Might he be considering resigning if emergency legislation is rushed through over his head?

* So you're Santander and you're feeling pleased with yourself for having bought Alliance & Leicester. Then news of Lloyds TSB's purchase of HBOS breaks. You're not singing any more...

* Santander claims it was approached about rescuing HBOS. And HSBC bosses are muttering they were asked as well. Of course they were.

Hoping that bigger is better

Lloyds TSB was prudent and avoided the worst fallout from the credit crunch, leaving it as one of the most financially strong banks around. It has now taken over HBOS, a much weaker bank, which in turn means the combined group will be weaker than Lloyds was. And this will somehow be good for stability? One problem with banks is that they are too big. Making them bigger seems an odd solution...

* Insight into what it is really like in the bailouts. A New York lawyer tells The Lawyer about the Fannie Mae and Freddie Mac rescue: "It's a big assignment, true, but there's not much to do. They've just been marched in and the Treasury's said, Sign here.

Darling is clued up – this time

They are determined to be seen to be in control this time. Midway through an interview with Alistair Darling on Today, Evan Davis interrupted the Chancellor to bring breaking news that the Federal Reserve, Bank of England and European Central Bank were pumping about £100 billion into the money markets.

Darling assured Davis he already knew about that — which makes a change from a year ago when the Chancellor only discovered by reading that morning's Financial Times the ECB was making money available to cash-strapped banks.

* The London travel industry is keeping its fingers tightly crossed that Barclays takes as much of Lehman's Canary Wharf operations as possible. It is reckoned Lehman's travel budget in London was running at £120 million a year. Half of that is believed to have been doled out equally to British Airways, Virgin Atlantic and American Airlines on flights mainly to the US. Another £12 million is thought to have gone on cabs and chauffeured cars — with the biggest suppliers being Radio Taxis and Cabot cars. The rest went on hotel accommodation and private jets.

* Talking of which... The protracted drama at AIG has robbed London of the face of its banking unit. Hard-nosed New Yorker Joe Cassano was head of financial products, and used to have an office next door to hedge fund GLG Partners in Mayfair's Curzon Street. He was such a frequent visitor to these shores that he was a signed-up NetJets corporate jet owner.

A big slice of humble pie for Numis

James Hamilton at Numis is scoffing humble pie. After months of being bullish about the prospects for HBOS, he has finally had to concede the obvious truth: he was wrong.

Here's his volte-face note to clients: "We have highlighted the structural weakness in the UK economy and have anticipated a severe recession for 18 months. Despite this, we have consistently remained positive on HBOS, believing that the balance sheet and P&L were robust enough to sustain a substantial and protracted period of increased impairment. We were wrong."

It seems like another era. On Wednesday, with the City in turmoil, genial former Prime Minister Sir John Major was in the Square Mile to open the new global offices of Standard Chartered. Major used to work at the bank, and did the honours in front of City minister Kitty Ussher (who surely had a few other more pressing issues to worry about), Standard Chartered chairman Mervyn Davies and former minister Lord Waldegrave. The bank's new home has a multi-faith room where staff can kneel and pray...

* You can't even get away from the crisis by going to the theatre. At the opening of Ivanov, starring Kenneth Branagh, at Wyndham's Theatre, there have been knowing laughs when Chekhov's characters discuss the financial world of 1880s Russia. Lottery tickets are selling fast, and those attending an evening gathering are not surprised. "There's no point holding capital
in the present climate," says a guest at the Lebedevs' soirée. "Interest on securities is too low and speculation too risky."

* Congratulations to Bang & Olufsen. It set up a stand in the centre of Canary Wharf yesterday, displaying a full range of its products, including £10,000 plasma televisions. Unsurprisingly, it was empty.

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