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Really - it made me sad - at least that he was being taken advantage of (though it was no surprise). I was confused though how his loss of short term memory could affect memories before the "condition" like his wife's diabetes - and the story about his client. Hmmm.
 

Well, it's hard to tell what is really going on with that because we only know about it from Teddy and well, can we believe his lies? She may have had diabetes and tested his condition and got herself killed and he created the fantasy of Sammy to escape that pain or she didn't have diabetes and Teddy made up the story about him creating that delusion and got himself killed eventually. But how could he remember killing his wife long enough to create an elaborate fantasy? Hecan't remember new delusions, right? So the diabetes test took place befoer the memry incident and islikely to be the more accurate tale. Therefore Teddy lies and must die!