What would another week on Wall Street be without the consistent "bend over and take one for the team" moment for the American working class?

Sadly, it has become such a common occurrence that I've learned to give a fake smile and quietly drop an F-Bomb to the whole situation. However, as details of Bear Stearns being sold for a price less than the New York Yankees paid for A-Rod's new contract were released, my ability to filter my speech went absent for several moments.

Bear Stearns (NYSE: BSC), founded in 1923 and the 5th largest investment bank in the US is no more.

Considered one of Wall Street's blue chip companies, Bear Stearns was sold to JP Morgan Chase in what can arguably be considered the best timed deal in merger and acquisition history -- for JP Morgan Chase of course, not BearStearns. And certainly not for it's employees and shareholders!

The deal boils down to Bear Stearns being sold for $2 per share, or a mere $240 million dollars.

For those who do not follow the markets, BSC had traded at it's all time high of $171.50 in January 2007. Therefore, the $2 dollar fire sale price represents a discount of 99% from the all time high no less than 14 months ago. Now why can't I get that type of discount on my next set of golf clubs or my girlfriend's designer heels!

What caused the problem?
Enter CEO Allan Schwartz and former CEO, now Chairman James Cayne, who stepped down as CEO in January 2008.

As most things in life, if you follow the big money, you will find the people who make the big decisions. In this case, it's where we will find the guy's who screwed over 14,000 employees and destroyed the financial futures of most of them.

These two Einstein's (said sarcastically) essentially made a Texas Hold'em like bet by purchasing large quantities of mortgage backed securities that were forced to be written down, or were incapable of being sold since no bank in their right mind would buy high risk loans after the real estate bubble has burst.

Rest assured, they were well compensated for their "expert guidance and hard work" for their time at the helm. Both sold large quantities of company stock before the downturn in the company share price, and have a well diversified portfolio far larger than that of their employees.

What did this do for day to day bank operations?
Disaster! One of a banks requirements keep it's doors open is to remain liquid (i.e. have cash) for it's customers.

If you need a storybook example of what happens when a bank runs out of cash, try flashing back to It's a Wonderful Life with Jimmy Stewart proudly waving his last two dollars after he survived the entire town wanting their money back.

Could this have been prevented?
Certainly! If someone could have thwarted Schwartz and Cayne from the country club socials, the golf courses, and any number of events that kept them from overseeing the daily activities of their company as any successful corporate manager would do.

As a final show of complete mismanagement, or even a case of general apathy, Chairman Cayne was actually playing bridge while CEO Allan Schwartz was negotiating the fire sale of BSC this weekend.

What happens to the company and employees?
At this time, the successful buyout of Bear Stearns is still up for debate. A majority of the shareholders must accept the buyout, which would appear unlikely considering their feelings of betrayal, but also because the stock price closed today's trading session at $5.91. That is $3.91 above the agreed upon selling price.

The employees on the other hand, are definitely in for a less fortunate and definitely unnerving waiting period for the final shareholder decision. Many employees had worked with the BSC for decades, and accumulated substantial amounts of company stock that was supposed to pay for their retirement, children's college funds, etc., which will essentially be forced to wipe the slate clean and go back to the drawing board.

The jury is still out on the final decision to sell, or if the shareholders will reject the buyout plan. Lawsuits have been filed, employees have cleaned out their desks, but hey... at least Cayne and Schwartz made their millions right?