Two Dollars

I see that JP Morgan is buying up famed U.S. investment bank Bear Stearns for $2/share. To put that into perspective, it's not too long ago that Bear Stearns was trading around $150/share. Basically, they are bankrupt and JP Morgan gets control of the carcass. To put it into perspective another way, the deal values Bear Stearns, up until last week a large powerful investment bank which made around $2 billion in profit in 2006, at around $240 million. In Vancouver, $240 million might get you roughly three hundred decent houses, or a third of a convention centre, but in New York you can buy an investment bank with thousands of employees and a headquarters building in Manhattan that's probably valued in the billions just by itself. Of course, if you factor in some of the support that the U.S. federal reserve provided to JP Morgan as part of the deal, they are basically being paid to take over Bear Stearns and try to keep the financial crisis from spreading further.

The U.S. (and by extension, the global) financial system, has real problems.