only a fool would revel in Lehman's failure

Count me among those fools!

If you want to have a free market, you have to have consequences to risk as an appropriate deterrent against future malfeasance. God knows you can't trust Bush's slash & burn policy to regulatory oversight, and the worst thing would be to let banks believe any of them are immune. Watch AIG and WaMu for signs of imminent failure (though I really can't understand how AIG could be SO leveraged that its physical assets' value would be outweighed by the positions of just one of its many divisions). Anyway, I haven't been following AIG closely though, so maybe the market is right in its heavy devaluation of the firm. It went from $40/share to around $20/share between May - Sep, and now it's trading at the sub-$4/share level. That's a tad extreme.