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(2008-03-14)
Traders work on the floor of the New York Stock Exchange
Wall Street investment bank Bear Stearns has been bailed out by the federal government and JPMorgan Chase in a surprise, last-ditch effort to save the 86-year-old institution.
Bear Stearns said that its financial situation had "significantly deteriorated" within a 24-hour period. Central bankers backed the arrangement to bolster the company, and said they stand ready to provide extra resources to combat a credit crisis that threatens one of America's biggest financial institutions.
Bear Stearns, the nation's fifth-largest investment bank, made its fortune dealing in mortgage-backed securities - a strategy that backfired amid the worst housing slump in a quarter century. The bank had racked up 2.75 billion dollars in write-downs since last year, and faced a possible collapse without some kind of lifeline.
Bear Stearns lost half of its value within 30 minutes of the market open, and its shares were down 41 percent at midday.
© Copyright 2012, Associated Press
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