London is cheaper and warmer, at least compared with Davos, says London Mayor Boris Johnson.

"The fall in the pound is of huge value to London's exports and all sterling-denominated assets. We're seeing a very impressive effect here. We take advantage of the upside and the upside is that the pound is competitive," Johnson told Reuters.

"And everybody in Davos, once they finish this massive negotiation of egos, this complete vanity, should come to London. It's considerably cheaper and considerably warmer."

Was letting Lehman go down the biggest mistake of the crisis? Many, including George Soros in the Financial Times, have argued that letting Lehman go down sowed panic to markets, consumers and businesses.

Not so fast, says Harvard historian Niall Ferguson, in an interview in Davos:

"My position is this is a typical error of historical understanding in which a single event is blamed for much more than it can possibly have caused. You can say ‘Hank Paulson is to blame for my troubles' and if you can change one thing in the story it would have a happy ending.

It's like saying if only Princip had not shot the Archduke Franz Ferdinand in 1914 there wouldn't have been a First World War.

If you go through the events of September of last year you will find it incredibly hard to produce a counterfactual scenario in which it could have been possible to save both Merrill Lynch and Lehman. There is one bank which could be bought by Bank of America but there couldn't have been two.

This is a crisis of too much bank leverage which began in August of 2007 and indeed had it roots far before. A bank leveraged 25-1 only needs a 4 percent decline in their assets to have their equity wiped out. And the notion that saving one investment bank could somehow have prevented or mitigated the crisis is a fantasy. The problem would have happened at some point somewhere else. There is a fundamental problem of bank solvency."

Ferguson argues that without another buyer for one of the two, one would have needed to have been taken into a kind of Treasury conservatorship, as Fannie Mae and Freddie Mac were. But those were already quasi-government and such a move would have required Congressional approval, which given that Congress turned down the first version of the TARP, was not likely.

"Historical arguments need to be based on a credible counterfactual, " Ferguson said. "Nobody has been able to tell me a credible story about how both Lehman and Merrill could have been saved. It wasn't possible."

My view is that the "Oh no, they killed Lehman" meme is just part of the denial phase of grieving. Few in financial circles wanted, or indeed want, to believe that things have changed fundamentally and that the good days won't be coming back any time soon. Blaming mom and dad is the last first refuge of the adolescent.

Jim Saft is a Reuters columnist. Any views expressed are his own.

So, back we go next week to Davos for the World Economic Forum 2009, titled this year "Shaping the post-crisis world."

Except the crisis ain't over yet and shaping the world while it is happening is proving to be about as easy as tying your shoes while riding a bicycle.

Let's dial back briefly to those more innocent days in 2008 and remember what was being discussed at Davos then.

Q - Will Sovereign Wealth Funds save the world financial system through equity investments? Are they a menace?

A - No, and even if they are it doesn't much matter.

Q - Isn't this just about a bunch of red-neck American sub-prime borrowers and the banks that were dumb enough to lend to them?

A - No and no. It is all of us, every one, and if the heart isn't pumping sooner or later the limbs stop moving.

In fact this year's SWFs, the people everyone wants meetings with, are just plain old governments, which are more or less the lenders of only resort and increasingly the owners of the global banking system. Think of them not as Sovereign Wealth Funds but Sovereign Debt Funds. One unofficial theme of Davos this year will be the positioning that is now madly going on by businesses which feel a new shall we say, urgency, to get close to government. Davos used to be a way for politicians to seem cool, cutting edge and productive by being seen with business people. That now would be just about reversed, but the point is no longer to seem cool but to be viable.

From that perspective Davos is arguably more relevant now, but oh lord has the balance of power changed.

Another theme, in my opinion at least, is how people are trying to position themselves for what promises to be an absolute blizzard of new regulation, on everything from how much banks can borrow to what they can pay, and to whom and how they can lend.

One person probably not coming back this year is John Thain, the now former CEO of Merrill Lynch, who left the company amid a flap over a reported $1.2 million office redecoration and the payment of billions of dollars of bonuses just before the firm was sold to Bank of America. Ironically, he was among the most downbeat about the prospects for banks last year.

Remember too that the villain last year was SocGen rogue trader Jerome Kervial, whose antics, just coming to light as Davos met, seem quaint in comparison with his 2009 counterpart Bernie Madoff. Come back Jerome, all is forgiven.

Here is the Davos pre-presser, which gives a more traditional read on the agenda.

James Saft is a Reuters columnist. The opinions expressed are his own.

Thanks are due to the World Economic Forum for clearly  explaining the interlinked web of misery currently facing the world.  Make what you will of the details in the graphic below – and if you can, please do let us know! — but the overall impact really does spell it all out.

This Vonnegutesque cat’s cradle, incidently, comes from the forum’s new report, Global Risks 2009, released ahead of its annual meeting in Davos between January 28 and February 1. It shows an interlinked world facing a monumental series of interlinked risk, some of which  investors are having to confront for the first time.  Sheana Tambourgi, head of WEF’s global risk network, explains the report in this video: