It seems that Wall St. are trying to blame the straw for breaking the camel’s back. As The Independent report today:

Suspicion over the collapse of Bear Stearns is centring on a massive options trade, less than two weeks before the historic investment bank went under in March, by which a single investor made a profit of more than $270m (£141m) on a bet against the company’s share price.

In a “whodunnit” that has gripped Wall Street for months, many traders and senior executives at Bear Stearns have become convinced the firm was brought down by a conspiracy of rivals and hedge funds, who spread malicious rumours and ultimately triggered a collapse in confidence among its trading partners.

These conspiracy theorists received new evidence yesterday, with news of an extraordinary bet placed in the derivatives market on 11 March, near the start of the week when rumours of Bear’s financial problems snowballed. By 14 March, the Federal Reserve was having to extend emergency funding as Bear’s customers deserted. On 16 March it was sold at a fraction of the previous share price to JPMorgan Chase.

Wait a second, isn’t that the same day that Helicopter Ben lunched with a who’s who of Wall Street bigwigs?

The chairman’s March 11 lunch with financial-industry executives was held at the New York Fed, with Geithner also attending. Bernanke and Geithner told Congress last month that they were informed of Bear Stearns’s troubles on March 13.

I wonder whether the trade was made before or after this meeting?