Bear hunting

Does positioning yourself to profit from a firm’s demise mean you caused it? That’s a question that needs to be examined in light of news that, in the week before the firm’s demise, investors bought some $1.7m worth of put options that would only become profitable if Bear Stearns’ stock collapsed. Yes, regulators looking for villains should take a careful look at who bought the options and why. But in themselves, the puts don’t constitute a smoking gun. Bloomberg reports that the options were...