Bear Stearns Companies, Inc. was founded in 1923 by Joseph Bear, Robert Stearns and Harold Mayor as an investment company. Despite the 1929 market crash, which triggered the Great Depression, Bear Stearns got through without laying anyone off. As time passed Bear Stearns became an international company, opening its first office outside of the United States in Amsterdam in 1955.
Despite its initial takeoff, Bear Stearns only became a public company in 1985, more than 60 years after its founding. By this time, it had added many services beyond the initial investment services, including foreign currency exchange, corporate finance, risk management, global clearing services and securities lending.
As time passed the company continued expanding. With additional locations in the United States, along with locations in Puerto Rico, England, China, Germany and Japan, Bear Stearns became one of the larger investment banks in the world.
In 2005, it had become the seventh largest securities firm in the entire world. Between 2005 and 2007, it ranked as one of the "Most Admired" securities firms and was seen as a specialist in risk management. That perception lapsed as the financial crisis of late 2007 began to take hold.
By 2008, Bear Stearns had begun to fail as a result of excessive leverage to sub-prime mortgages. In March of 2008, the Federal Reserve Bank of New York offered to provide a US$25 million dollar loan to Bear Stearns after a massive drop in its share value. It was already too late. The next day, the share value dropped to a mere ten dollars. JP Morgan Chase purchased Bear Stearns for a cost of two dollars a share.
The Federal Reserve then provided a loan to JP Morgan Chase of US$29 million to help with the merger. Federal Reserve officials believed it would be disastrous for the economy if Bear Stearns had collapsed. JP Morgan Chase officially abandoned the Bear Stearns name in the year 2010.
The failure of Bear Stearns is informative. The Left likes to blame Wall Street for economic problems, but in fact, the difficulties run far higher than that. Money Power itself is concentrated in the hands of an elite group of intergenerational banking families that have little to do with the day-to-day operations of companies like Bear Stearns.
The failure of Bear Stearns is a reminder that Money Power has little to do with its corporate receptacles. These are merely operative placeholders for a larger authority.