When Standard & Poor’s, the rating agency, revised its outlook for Bear to negative, from stable, on Aug. 3, 2007, top Bear executives scrambled to put a good spin that, too. “We need to create more liquidity ASAP,” said Sam Molinaro, Bear’s chief financial officer, in an email to Michael Minikes, another senior Bear executive, that day.

But liquidity remained a major problem. Banks were ending their “evergreen” financing arrangements with Bear, and Mr. Friedman doubted they would be available to the firm again unless they “have amnesia,” he wrote. On Aug. 20, Mr. Friedman wrote that since the S.&P. report, Bear had lost $14.5 billion in existing funding and had received only $2.7 billion from new sources. He noted that another $3.1 billion n funding was “already scheduled to be pulled” or was “at risk of leaving.” He expected another $1.9 billion in borrowings to be lost in the next week or two. There was also a “significant dispute” with State Street Bank over the valuation of the collateral backing its $1 billion loan to Bear, “and it’s clear that what they’d most like is to simply pull it.”

On Dec. 3, 2007, Mr. Friedman noted in an email to executives in the fixed-income division that the firm was “starting to see some significant pullback in funding” and lost “close to $2 billion in cash” in one day. “It’s getting ugly out there,” he wrote.

In a Dec. 15 memo to Thomas Marano, the other co-head of fixed income, Mr. Friedman said he worried that another $10 billion to $30 billion of short-term funding would be pulled if and when Moody’s Investors Service downgraded the firm as he expected it would (and which it did five days later). “We will also effectively be out of the derivatives business – equities, rates and credit – since we already have firms refusing our name and many more will refuse us then,” he wrote. “Either way, we’re dead, whether from lack of cash or lack of customers.”

In the same email, Mr. Friedmann worried that Bear employees would soon recognize the reality that Bear might well be out of business. Faced with a lean year for compensation “and the prospect of effectively winding down the firm over the next quarter, how do they respond?” he asked, rhetorically. “I think we all know: Any that can find another place to work will do so. So we’ll be alive in the way that a patient on life support is alive, hoping for a miracle.”

He then asked Mr. Marano why Bear’s executive committee had failed to understand the seriousness of the firm’s predicament. “Beats the hell out of me,” Mr. Friedman wrote. He added that Robert Upton, the treasurer, had spoken to Mr. Molinaro, the chief financial officer, a dozen times but had “been rebuffed.” Mr. Friedman wrote that he had spoken “over and over” with Steven Begleiter, the head of corporate strategy, “and been told that no one believes things are that urgent.” Mr. Friedman wondered if the executive committee was “confusing” raising new equity with having sufficient funding to run the business. “Raising new capital won’t fix the world around us,” he concluded in the email, just three months before the firm’s demise. “But the point that gets lost is that if we don’t do it we won’t be here when the world gets back to normal.”

In the end, Bear’s top executives opted not to raise new equity. And the firm was no longer around when the world got back to normal.