At the North American Bridge Championship in St Louis last March, Jimmy Cayne was still a rogue prince of Wall Street.

The rough-edged, cigar-smoking Bear Stearns chief executive had recently become a paper billionaire as shares in his investment bank remained near their record high of $171.51 at the start of last year. Mr Cayne, who was spending more and more time out of the office playing cards, finished 14th in total points in St Louis out of almost 4,000 players.

A year later, at the spring championships in Detroit, Mr Cayne was again holding his own at the bridge table. But back in New York, the investment bank he led for 15 years before becoming non-executive chairman this year was melting down.

In a matter of three days, from March 13 to March 15, Bear’s $17bn cash cushion evaporated. Rumours the bank faced a cash squeeze led clients, including big hedge funds, to demand their cash balances back.

Creditors refused to roll over the short-term financing on which Bear had become so dangerously dependent.

The rumours of a cash crunch became reality. One senior executive called it a “riptide” from which there could be no escape.

Panic over Bear’s position spread with stunning speed, leaving the bank’s executives powerless to respond as money poured out the door.

“The Street was no longer trading with them, foreign exchange lines of credit from counterparties evaporated and banks pulled back,” said Brad Hintz, Sanford Bernstein analyst. “Strange as it may seem, there is no model for defibrillating a comatose trading business and bringing it back to life.”

By the end of the week, Bear was broke and in need of emergency financing from JPMorgan Chase and the Federal Reserve just to keep the lights on.

Through it all, Mr Cayne remained in Detroit and in minimal contact with Bear executives or other board members. A bridge tournament official said Mr Cayne, 74, could not have left the table to make phone calls even if he wanted to. Tournament rules forbid it.

Mr Cayne finally returned to New York over the weekend and turned up at Bear headquarters but played little role in the talks that led to the sale of Bear to JPMorgan for $2 a share in a deal announced last Sunday.

Those talks were led on Bear’s side by Alan Schwartz, the veteran investment banker who had taken over as chief executive after the collapse of two of Bear’s in-house hedge funds.

The collapse led first to the dismissal of Warren Spector, co-president, in August 2007 and Mr Cayne’s departure as chief executive at the start of this year.

By the time the frantic talks concluded last Sunday night, Mr Cayne’s stake in Bear, worth more than $1bn a year ago, was reduced to $14m. Mr Cayne declined to comment, as did the bank.

Someone, possibly from the firm, taped a $2 bill to the door of the company’s headquarters.

Still, while the final collapse of Bear Stearns took place with stunning speed, the seeds of the demise were planted at least a decade earlier, when Mr Cayne and Bear famously refused to join their Wall Street competitors in a Fed-backed bailout of Long Term Capital Management, the highly leveraged hedge fund.

Bear, which had been considered something of a renegade at the time for its repeated legal problems over junk bond deals and failed stock offerings, became an official pariah with few friends at other banks or among senior regulators.

For a time, Mr Cayne and his management team continued to laugh all the way to the bank. With interest rates low and the housing market booming, Bear saw its share price more than triple between 2001 and 2007 as demand for high-yielding debt played to the strength of its fixed income sales and trading department.

However, when demand for securities backed by subprime mortgages faded, the firm ran into trouble. The problem worsened last summer when the the two Bear hedge funds collapsed on bad, highly leveraged mortgage bets.

Other banks that had lent money to the funds, notably JPMorgan, were appalled that Mr Cayne and Bear did not move more quickly to prop them up and limit counter-party losses.

Mr Cayne responded by being brusque in public – most famously, by leaving a conference call held on August 3 to reassure investors – while working behind the scenes to build up Bear’s financial foundations.

Joe Lewis, the British billionaire, took a big stake in the bank – a $2.5bn note sale was completed in September of last year, and a deal to exchange shares with Citic Securities of China was announced the next month.

Bear’s shares continued to slide even after the Citic deal was announced as the credit crisis worsened and prospects for a quick recovery dimmed. Reports of Mr Cayne’s absence from the bank in times of stress also led to more questions about the quality of its leadership.

Some analysts said late last year that Bear should have acted more aggressively to strengthen its capital base, a notion Mr Schwartz rebuffed upon taking over as chief executive. “We are not in need of capital for capital’s sake,” he said in January.

When Bear found itself near collapse, no one was inclined to rush to its aid. Instead, other big banks stopped taking the other side of Bear’s trades and pulled credit lines.

No one stepped up to publicly rebut initial rumours about Bear as they did when similar whispers about Lehman Brothers circulated briefly last week.

Mr Schwartz and Sam Molinaro, chief financial officer, made reassuring public comments but no one believed them.

Bear’s reputation for going its own way – which dates at least to the leadership of Alan “Ace” Greenberg, a charismatic trader and amateur magician who ran the bank before Mr Cayne – finally left it little trusted on Wall Street.

When regulators stepped in to stabilise the situation they did so to protect the financial system. They had no interest in setting a new precedent by bailing out Bear’s shareholders, 30 per cent of whom are employees.

Like its lack of support from rivals, Bear’s fundamental business weakness also dates to about 1998 when it failed to follow a trail blazed by Lehman Brothers. At the time, both Lehman and Bear were heavily dependent on US fixed income markets. However, under Dick Fuld, chief executive, Lehman embarked on an ambitious plan to bolster its capital position and diversify into other countries and businesses, such as equities, investment banking and asset management.

Bear, by contrast, remained dependent on the US for three-quarters of its revenues. It found no real replacement for its once booming business of packaging mortgages into securities sold to investors.

Last December, it reported the first quarterly loss in its 85-year history following writedowns that were twice as big as expected.

Hedge funds, increasingly in need of a global platform, were deserting Bear’s once proud prime brokerage franchise. The flow of hedge fund money from Bear only picked up speed as rumours spread about the bank’s cash problems and its use of hedge fund balances to fund short-term operations.

Mr Cayne’s joint venture with Citic Securities – which would have given Bear a big boost in Asia, but offered Bear no balance sheet assistance – was too little too late. The deal failed to close before Bear’s collapse.