There's nothing like a fire-sale of a company that wipes out billions of dollars of imaginary value for sending the reputation of a Wall Street CEO right down the tubes. In January, when long-time investment banker Alan Schwartz took over the chief executive position at Bear Stearns from Jimmy Cayne, he was lauded by one analyst as "one of the most impressive investment bankers I have ever known," and by another as "brilliant... he has tremendous raw intellect."

Then came the forced sale at bargain-basement rates to J. P. Morgan. And in a flash, everything Schwartz touches, or has touched, turns to mud. Case in point: a Forbes Magazine story on Monday noting that Schwartz had been retained earlier this year by Microsoft as an adviser on its hostile bid for Yahoo.

Writes Elizabeth Corcoran:

As Silicon Valley wakes up on Monday and assesses the fallout from the Bear Stearns fiasco, no one will be thinking through the implications more carefully than executives in Redmond, Washington.

Bear Stearns will go down in history as a victim of its own aggressive borrowing. That legacy might well give pause to Microsoft's chief executive, Steve Ballmer.

There are some problems with Corcoran's story -- she has no actual evidence to support her thesis that Microsoft might be getting cold feet because of Bear-Stearns' woes, and her suggestion that "Bill Gates can't be thrilled with watching Ballmer drain the company's cash," is rank speculation.

Of course, out here in the blogosphere, we adore rank speculation, so How the World Works can't really hold that against Corcoran. And her core point, that massive market turmoil might encourage Microsoft to be a bit more cautious in its approach to Yahoo seems plausible. But does that mean there's a silver lining for Yahoo in Bear-Stearns' demise?

Only if you think Yahoo wins by fending off Microsoft.

The forced sale to J. P. Morgan is being hailed as a coup for the new top gun of Wall Street, J. P. Morgan CEO Jamie Dimon, chiefly because the price per share was so low, and the Fed is promising to shield J. P. Morgan from at least $30 billion dollars worth of deals that might possibly go bad. So isn't the lesson here that if the price is right, any deal can be a good deal? From Yahoo's perspective, in a world where companies can be worth $30 billion on a Friday and $270 million on a Monday, an offer in which shareholders could receive $31 a share might suddenly look a lot better than it did prior to collapse of Bear-Stearns.