jangis, That might be the answer and of course, normally it would be. However, Bear Stearns is not an ordinary trader as they are also the bank that underwrites much of the stock trading activity that goes on. I might be wrong but as I have been reading about this financial mess, it seems that Bear Stearns could potentially be backing up their own trades. In a situation like which occurred last week where there was a run to pull out funds, Bear Stearns might possibly not have enough money, even if they sold all the stock they had, to cover all of their debts and obligations. If this is not possible, how is it that Bear Stearns got sold to JP Morgan for less than the worth of the building they own as their corporate headquarters? That's total, including all of their other assets!
Is it possible in a bankruptcy situation, that because of a shortage of funds, the shorted stock never gets covered?
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