Small literary magazines aren't my usual source of news on the credit crisis (I'm looking your way, Paris Review), but n+1 has posted the second of its long (and I mean looong) installments of Interviews With a Hedge Fund Manger on its site.
Anonymity plus a sense of humor makes for some good quotes and a digestible explanation of what's been causing Wall Street's headaches all year. A few choice bits:
On Bear Stearns's current health:
"You know when somebody falls off a motorcycle, and they want to harvest their organs, they're still alive until they harvest the organs. Right now Bear Stearns, there's an EKG, it is pinging, they're technically still alive, and JPMorgan is waiting for the healthcare proxy to sign and say they can start harvesting the organs. This is where Bear is right now."
Speculating on what really happened after the run on Bear:
[T]he theory we had at the desk here is that the Treasury Department—not the Fed, the Fed's not so tough, but the Treasury Department—went to the top guys at Bear and said: "Either a deal gets done that saves Bear and calms the financial system by the end of this weekend, or we will find some reason to put you in jail." And I think one of the things that every officer of a public company is very sensitive to, post-Enron, is jail. There has been a criminalization of failure. And after Sarbanes-Oxley, and in the wake of prosecutions related to business failures, it was like Beria said: You show me the man, I'll find the crime.