Credit crisis diary: Spurned: the naked hedge fund manager

Now this is what we call naked shorting. A New York judge has dismissed a lawsuit in which a woman complained that a hip-hop magazine published without her consent a photo of her in a topless mermaid costume at a party thrown by the rap mogul Sean "P Diddy" Combs. The photo of three bare-breasted women, taken at the annual White Party in East Hampton in 2003, was captioned "Mermaids Gone Wild" and published in Vibe magazine alongside an article about Combs, below. One of the women was a hedge-fund manager, Maria Kristina Dominguez, who sued Vibe and Combs for $3m (£1.6m). However, the judge said the picture was related to newsworthy issues of public interest and concluded that Ms Dominguez had no right to privacy while she was cavorting topless. A lawyer for Ms Dominguez said she was "exploring her options". Sounds like she's hedging her bets.

In defence of short selling

The clampdown on short selling transports older City hands back to the 1980s, when there was a similar debate about insider dealing, a previously tolerated practice which the authorities were then trying to restrict. Even after it was made illegal, Sir Martin Jacomb, the former chairman of Barclays de Zoete Wedd (whatever happened to them?) went so far as to call it as "a victimless crime". More amusing still, one leading Japanese securities house applying for a licence told the Treasury it couldn't understand why there were any restrictions on insider dealing at all, as the practice had the entirely beneficial effect of adding to the liquidity of markets and thereby oiled the wheels of commerce. Cue the same defence for short selling.

Lehman Bros keepsakes going for a song

Spotted on eBay: Lehman Brothers branded memorabilia for sale including, appropriately enough, an evacuation kit complete with breathing mask, goggles, torch and instructions (£5.55 last time we looked); a Lehman Brothers mug ("Where Vision Gets Built" – £33), cigar boxes, paperweights and, again fittingly, a stress ball. Other gear includes a rucksack, souvenir cube, baseball caps and even a visitor's dining place card. Over on the US site, you can find many hundreds of items, with bids topping $200. eBay can be humbling.

* Joke of the day: What's the difference between a CDO trader and a pigeon? A pigeon can still leave a deposit on a Ferrari.