What's Really Going on with Bear Stearns

Bear Stearns, the fifth largest investment bank in the US, was sold to JPMorgan over the weekend in what will forever go down in financial history. Last week, the troubled bank constantly reassured its clients that it had no problems with liquidity and that the rumors surrounding its financial situation were false. By Friday night, a classic bank run scenario left the company reeling at its knees: the investment bank's clients pulled nearly $17 billion in two days and its creditors stopped renewing loans. The collapse brought the Fed and only two prospective buyers to the dealing table in an effort to salvage what was left of the bank. In the end JPM, one of the few banks to suffer only relatively small sub prime losses, prevailed in a deal guaranteed to prove lucrative. The two companies revealed the Bear Stearns was to be bought for $240 million, or approximately...