One year ago, amid the equivalent of a run on the bank, J.P. Morgan Chase hurriedly rescued Bear Stearns Cos., one of Wall Street's five large investment banks at the time. It represented one of the opening chapters in what would become a massive financial crisis that is still being sorted out today.

The Wall Street landscape has changed dramatically since Bear's failure. In the bleak weeks of September, Bear's demise precipitated to the collapse of Lehman Brothers, the rescue of Merrill Lynch by Bank of America, and the reorganization of Goldman Sachs and Morgan Stanley, the two remaining big Wall Street firms, into bank holding companies.

Wall Street, in a sense, ceased to exist as it had long been known. (See Michael Lewis' elegy for Wall Street, "The End," from the December 2008 issue of Condé Nast Portfolio.)

Before its demise, Bear Stearns had a plucky reputation. Its longtime chief executive, Alan "Ace" Greenberg, answered his own phone and scrimped on paper clips.

While smaller than its competitors, Bear Stearns carved out lucrative niches in the fixed-income arena and in servicing hedge funds. Unlike the other four large investment firms, the firm eschewed acquisitions.

James "Jimmy" Cayne, Greenberg's successor, declined to acquire businesses that would have diversified Bear's portfolio—and might have given it a better chance of surviving. Instead, the firm remained focused on its core businesses, and for some time racked up strong profits while maintaining its independence.

But a combination of expensive bad bets tied to the imploding housing sector undid Bear Stearns, a firm that began business in 1923 and had survived many earlier crises, including the Great Depression.

Like many of its banking brethren, Bear Stearns borrowed heavily to invest in exotic derivatives. Most of these derivatives were tied to the housing market. The underlying assumption for these investments: housing prices would always rise, even if a little.

Housing prices, however, began dropping in 2006. By the summer of 2007, two in-house hedge funds at Bear Stearns, stuffed with housing-related derivatives, began to fail.

Through the fall and early winter months, questions about Bears' liquidity and financial strength began to grow. After a multi-month windup, the end came swiftly for Bear.

With questions mounting about its financial position, counterparties began to stop doing business with Bear. Its credit lines started getting called. In a process similar to a "bank run," Bear found itself unable to find enough cash and credit to maintain its operations.

Just days before its demise, the firm said it was in healthy financial shape.

J.P. Morgan's offer to buy Bear Stearns, initially for what was then a scandalous price of $2 a share, came with manifold guarantees from the Federal Reserve. Eventually, to appease outraged investors, the purchase price moved to $10 a share, but Bear's existence as an independent securities firm was over.

One year later, it's clear that Bear was just at the front end of a long line of trouble. Its rescue marked the start of an extensive government and regulatory effort to prevent the financial system from outright collapse.

Today, those efforts are still incomplete and the costs of the various rescue plans continue to mount, with another $750 billion requested for financial-system rescue in the Obama administration's budget proposals.

The government stepped in to rescue Bear because it was considered too big and too complex to fail. In the following months, the government would take similar steps to deal with other ailing firms, including Fannie Mae, Freddie Mac, AIG, Washington Mutual, and Citigroup.

Bear Stearns epitomized what had gone terribly awry in the financial industry: overconfidence in the ability to manage risk, a penchant for using large amounts of debt to drive investment strategies, and a massive overindulgence in complex instruments based on questionable assumptions, such as housing prices always rising.

Today, the swashbuckling ways of Wall Street seem a distant memory. Bear's fall marked the beginning of the end, but what shape the new Wall Street will take remains an open question.

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