Financial Collapse

After months of credit worries, the moment finally arrived when it was time for Wall Street to fling open the closet door and confront the monster -- well, in this case, the Bear.
Bear Stearns became the first big bank to fall victim to the credit crunch, announcing that it was going to receive emergency funding from the New York Federal Reserve via J.P. Morgan.
The news sent Bear Stearns shares into a freefall and the Dow Jones Industrial Average on a pit-in-the-stomach rollercoaster drop. The blue-chip index shed 1.6 percent, but amazingly, after this week of gyrations, managed to finish up about 0.5 percent from where it ended last Friday.
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It's hard to see past this Bear-induced haze, but the Dow's gain came from two spectacular rallies this week: one on Tuesday, when stocks turned in their best performance in five years after the Fed announced a liquidity plan to loosen the credit crunch and the second on Thursday after Standard & Poor's said there's an end in sight to all of this write-down madness. Those two days helped offset losses the rest of the week thanks to general credit worries, oil's ascent above $111 a barrel and the big finale, the Bear Stearns bailout.
"This has got to be the most skittish and suicidal bunch of shorts that I have ever seen in 45 years," Art Cashin, director of floor operations at UBS Financial Services, told CNBC. "Many of these people are just out of Pampers ... they haven't traded a bear market and watched bear-market turns."
Friday marks the 30th triple-digit close for the Dow so far in 2008. For those of you keeping score at home, that would be 18 negative and 12 positive. The Dow is now down nearly 10 percent for the year.