Like the Bourbons, Bear Stearns CEO Alan Schwartz has learned nothing, and forgotten nothing. Amid five hours of blather on Capitol Hill yesterday about the credit markets’ near-meltdown, Schwartz explained away the demise of his firm with a rationalization that even OPEC ministers no longer believe when trying to explain high oil prices: in his own words, it was “unfounded rumors and attendant speculation.”

“Due to the stressed condition of the credit market as a whole and the unprecedented speed at which rumors and speculation travel and echo through the modern financial media environment, the rumors and
speculation became a self-fulfilling prophecy,” Schwartz told the senators. “There was, simply put, a run on the bank.”

So there you have it. Bear’s collapse had nothing to do with packaging worthless mortgages destined to turn upside-down. It had nothing to do with derivative instruments whose value could be determined only in the abstract, through mathematical models that had no bearing on real-world considerations. No, it was rumormongers who started raising impertinent questions about the mortgage securities and the derivatives of derivatives of derivatives. And it was speculators who had the temerity to act on those rumors. Bear’s balance sheet was pure as the driven snow until a bunch of ne’er-do-wells started stirring things up.

And none of the senators in attendance called BS on Schwartz. If they really want to take him at his word, one wonders if they’ll start investigating and identifying all those rumormongers and speculators who so recklessly and with no reason took down one of the pillars of American finance.