JPMorgan Chase & Co. (JPM), Goldman Sachs Group, Inc. (GS): 5-Year Anniversary: The Epic Collapse of Bear Stearns

The bank was likewise at the very heart of the structured-security business that suffered the most during the crisis. In 2006, $5 billion of Bear’s $9 billion in total revenue came from principal trading — nearly three-quarters of which came from fixed-income products like mortgage-backed securities, leveraged loans, and credit derivatives. Again, that wasn’t a completely new development. In 1998, roughly a quarter of Bear’s total revenue came from fixed-income principal trading.

There were also the personalities at Bear Stearns. A colorful crowd led by former scrap-iron salesman Jimmy Cayne, many at Bear relished the view of firm as rough-and-tumble “street fighters.” While perhaps skilled traders, the leaders of Bear weren’t always the best politicians — Cayne’s refusal to join the syndicate of major Wall Street firms bailing out Long-Term Capital Management in 1998 was likely not forgotten by others on The Street.

But the reason Bear Stearns’ imploded — even as close competitors Goldman Sachs Group, Inc. (NYSE:GS) and Morgan Stanley (NYSE:MS) managed to navigate the storm — can’t be found in any one of these things. In the end, it was all of the above, and more. And even that caustic concoction didn’t cause the collapse on its own. Those ingredients simply put Bear on the train tracks — it took the screaming freight train of the once-in-a-generation financial panic to bring it all together into tragedy.

The article 5-Year Anniversary: The Epic Collapse of Bear Stearns originally appeared on Fool.com.

Matt Koppenheffer owns shares of Morgan Stanley. The Motley Fool recommends Goldman Sachs. The Motley Fool owns shares of JPMorgan Chase.

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