Rumors, rumors, rumors. They can devastate. Despite assurances from Bear Stearns CEO Alan Schwartz that the firm had adequate liquidity, no one believed him. So no bank would extend any credit. The result was JP Morgan Chase moved to bail out the firm. It did so with a deal that assigns very low value to what was, just a few months ago, a top firm. This was done at the behest of the Fed and Treasury. The bottom line is that the company is cooked--the first major victim of the credit crunch. It's fitting; it's hedge fund woes in some ways really ignited the crunch. The sad fact is that this same fate could befall others.

For more:
- here's the AP article

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