We can all agree on this: 2008 was not your typical year at the beach. While no year is exactly like another, the past 12 months have featured levels of turmoil and change unprecedented since -- you knew this was coming -- the Great Depression. With the financial system imploding under too much leverage and too much complexity, deals cratered, institutions failed, the government intervened (whether effectively or not we'll be debating for years), altering the structure of deal markets. We suffered through a credit crunch, bank runs, bailouts, rescues, contagion, recession, even a shorting and
rumor jihad.

-- See the full slideshow: 2008 Deals of the Year --

The year stretches the concept of the deal and challenges conventional definitions of a Deal of the Year. In the midst of carnage, large or groundbreaking deals have been rare. Some of the most interesting transactions turned out to be those that failed to close, such as the BCE buyout or the year-long Reed Business Information auction. And many truly seminal transactions involved the Federal Reserve, Treasury or the Federal Deposit Insurance Corp. as financier, facilitator, principal or all of the above.

Consider the emergency weekend acquisition in mid-March of Bear Stearns Cos. by J.P. Morgan Chase & Co. This was neither the largest, most complex nor most damaging deal of 2008. But it's the transaction that not only gave us a sense of how much damage markets could wreak, but set precedents that effectively shaped how regulators and markets reacted to subsequent failing institutions. Bear was not Lehman Brothers, which many believe triggered a global meltdown. But the "lessons" of Bear helped determine the reaction to Lehman, Fannie Mae, Freddie Mac and American International Group.

Bear was an early warning sign of subprime disaster: The firm took out a $13.2 billion loan in August 2007 to backstop huge losses at two of its highly leveraged hedge funds with mortgage exposures. It was the smallest of the major Wall Street firms and thus more easily capsized. Under stress, Bear suffered through dysfunction and turmoil. In early August, CEO Jimmy Cayne sacked No. 2 Warren Spector. A few months later Cayne, who had been devastatingly portrayed as a pot-smoking absentee CEO in The Wall Street Journal, was replaced as CEO by investment banker Alan Schwartz (Cayne remained chairman). Bear needed capital, but the board, enlivened by infighting between Cayne and predecessor Alan "Ace" Greenberg, couldn't agree. A proposed joint venture and capital infusion from China's Citic never closed.

Meanwhile, markets grew more anxious. After a period of calm at the turn of the year, Bear shares became a target. By early March, despite a clean bill of health from the Securities and Exchange Commission, counterparties and prime brokerage customers began to bail.

The run fed on itself and by Friday, March 13, Bear turned to the Federal Reserve for help. Over the next few hours the Fed and Treasury scrambled to find a buyer, particularly in Bear's midtown neighbor, J.P. Morgan Chase; the central bank agreed to backstop losses. Although J.P. Morgan's Jamie Dimon was willing to pay $10 a share, Treasury's Henry Paulson demanded $2, punishing Bear shareholders to preserve a semblance of moral hazard. Schwartz had no choice and agreed. But after a revolt of Bear shareholders, J.P. Morgan returned to the original $10 a share.

Why was Bear important?

First, it marked the real ascendancy of the Fed as a Wall Street regulator. The Securities and Exchange Commission had no clue about how perilous Bear's condition was in early March, and it lacked the financial wherewithal to save it. The Fed did. As a result of Bear, the Fed opened the discount window to Wall Street, a development that ushered in greater Fed oversight over investment banking. Second, the Bear sale put questions of moral hazard and too-big-to-fail on the table; Paulson tried to reconcile the two with the $2 a share price. After the sale, of course, the Fed found itself with an even larger J.P. Morgan, a paradoxical outcome it would see again. Third, by using J.P. Morgan to "save" Bear, the Fed left itself exposed if another crisis hit. By then the moral hazard issue loomed even larger in the mind of Treasury. Finally, Bear's failure justified the view of, well, market bears, who would renew their attacks on Lehman.

These are not the usual reasons offered up on a Deal of the Year. But, again, this was not your run-of-the-mill year.