Goldman Sachs contacts them to ask if there’s any way they can “help”:
If Goldman was calling to be “helpful,” Molinaro and Upton thought, that meant everyone on Wall Street knew that Bear Stearns was in serious trouble. “So that’s taps,” Upton said, “… because all that means is they want to come in and see our positions so they can trade against us and make money.”
Upton continues:
From that moment on everything else was “wholly irrelevant.” He grabbed a cigar and went outside and had a smoke. “I was fucking mortified. [...] I tried to pull my shit together, but it just didn’t feel the same. I called Martha [his wife] and I said ‘It’s done,’ and I closed my door and I cried.”
As counterparties got more and more hesitant to deal with Bear Stearns for critical loans, and funds pulled their money out of the firm, $18 billion in cash on hand was eaten through in less than 5 days.
“What are my options?” Molinaro asked Upton. Since the
previous Friday, Upton reported to Molinaro, the firm’s cash had
declined to $5.9billion from $18.3billion, and Bear still owed
Citigroup $2.4billion. Mr. Molinaro buried his head in his hands. Mr.
Schwartz looked ashen and left abruptly.
(excerpts from House of Cards: A Tale of Hubris and Wretched Excess on Wall Street)