The last gasps of Bear Stearns

The Los Angeles Times today has an interesting review of ‘Street Fighters: The Last 72 Hours of Bear Stearns, the Toughest Firm on Wall Street’ by Wall St. Journal reporter Kate Kelly, which purports to show the extent to which federal officials — mostly then Treasury Secretary Henry Paulson — orchestrated the first domino in the country’s financial collapse.

No paragraph is more compelling than this one:

“Regulators may never know what really happened. But one thing is clear: Once confidence in a company falls away on such a grand scale, it can never recover. Bear started that week with more than $18 billion in capital, its largest cash position ever. Three days later, negative headlines, a stock drop, lender reticence and big withdrawals from client accounts had cut those capital levels in half. Eight hours later, it was nearly dead.”

Another YouTube video says Kelly’s book reads nothing like the newspaper stories that were coming out at the time of the collapse. You decide. Here’s Kelly’s lengthy blow-by-blow account in the Journal a year ago.