New York Times article on Bear Stearns.
Two points: They deliberately inflated their market value to increase their stock price by way of simply bluffing. People on Wall Street bought it.
Okay, three points: The Fed, (i.e., US taxpayers) are bailing them all out.
Okay, okay, four points: As much as this "moral hazard" of bailing out the screwheads bugs the hell out of me, if the Feds didn't, the entire house of cards which is the US economy and the stock market would collapse, and that would hurt the innocent far more than the guilty.
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I've often been struck by the fact that the financial markets are the one domain of human life in which magical thinking really works. If we all believe, truly and fervently, and if we all clap our hands, the economy will live . . .
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