Over the past several days, a rapid sequence of events has both rattled the financial markets and effectively led to the demise of one of the nation’s largest investment banks. Last Friday, Bear Stearns came under pressure as the Federal Reserve stepped in to bail out the firm in cooperation with J.P. Morgan Chase, who agreed to act as the intermediary between Bear and the Fed. While Bear had already been under pressure due to the uncertainty surrounding the valuation of mortgage debt and related investment vehicles on its balance sheet, the suddenness of the firm’s collapse was precipitated by a crisis of confidence in its financial viability among its trading partners.

Read the complete Special Market Commentary.