City Starts to See Capital Flight; Lehmans Regulatory Mess Forces More Selling; Italy Could Bring Down the Euro

``The return of socialism to British shores and the expropriation under terror laws of Icelandic assets has unnerved some foreign investors. The problem with the government doing things out of expediency in pursuit of headlines is that the actions are remembered long after the headlines have faded. "If it can happen to Iceland it can happen to us" some of the huge sovereign wealth funds will be thinking. Trust is key to successful markets, would you risk trusting this government?''