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The recent fall and near collapse of Bear Stearns has been breathtaking. What has caused this once great company to flirt with becoming a penny stock? Will there be stockholders' suits for this remarkable collapse of value? Management of Bear Stearns decided to ride the mortgage-backed securities boom at the worst time. They apparently took an outsized position in these risky securities that eventually led to the Federal Reserve guaranteeing to pony up to JPMorgan Chase up to $30 billion if Bear's most toxic assets become worthless.
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