Ouch

Yesterday, we sat around watching movies and reading, so I'm playing catch-up this morning. The first thing I see is that Bear Stearns completely tanked and was purchased by J.P. Morgan for pennies on the dollar. I love this stuff:

...sold to J.P. Morgan Chase & Co. for the fire-sale price of $2 a share in stock, or about $236 million. Bear Stearns had a stock-market value of about $3.5 billion as of Friday -- and was worth $20 billion in January 2007....

...the Federal Reserve is taking the extraordinary step of providing as much as $30 billion in financing for Bear Stearns's less-liquid assets...

...the Fed said it would lend Wall Street as much as $200 billion in exchange for a roughly equivalent amount of mortgage-backed securities....

...The Fed, according to a person familiar with the matter, didn't care so much about the equity holders and was trying to prevent a bankruptcy filing that could have sent shock waves through the markets....

..."The building is worth $8 a share."...

...J.P. Morgan is essentially getting Bear's coveted prime brokerage business for free....

...Meanwhile, worries persist that other securities firms and commercial banks might be on shaky ground....

And it looks like the vote is already in from all those countries that have been funding our drunken-sailor spending:

...Asian, Mid East and European investors stood aside at last week's auction of 10-year US Treasury notes. "It was a disaster," said Ray Attrill from 4castweb. "We may be close to the point where the uglier consequences of benign neglect towards the currency are revealed."...

...Former US Treasury secretary Lawrence Summers says the Fed's shower of liquidity cannot cure a bankruptcy crisis caused by a tidal wave of property defaults.

"It is like fighting a virus with antibiotics," he said....

...As of June 2007, foreigners owned $6,007bn of long-term US debt. (Equal to 66pc of the entire US federal debt). The biggest holdings by country are, in billions: Japan (901), China (870), UK (475), Luxembourg (424), Cayman Islands (422), Belgium (369), Ireland (176), Germany (155), Switzerland (140), Bermuda (133), Netherlands (123), Korea (118), Russia (109), Taiwan (107), Canada (106), Brazil (103)....

Well, I know I'm feeling really optimistic right now. I think I'll run out and invest in some bank stocks.