Investors are waking up this morning to the news that the U.K. government had to rescue real estate lender Bradford & Bingley Plc and the Benelux government bailed out Fortis. This isn't a Wall Street problem and it isn't a U.S. problem. It's a global credit market problem and the system is unraveling as we speak.
Even if the system gets bandaged up and limps through, what we're going to need is much smarter regulation. With the leverage and the interconnectedness of all the players in the system, it's a huge job. Not many people even understand it. How much would you have to pay someone who is qualified to understand and monitor a balance sheet as complex as Lehman's? Will the credit market regulators be the new investment bankers?