Bear Stearns less valuable than A-Rod

If you follow financial news at all, you already know that the sky is falling, signaled in particular by Bear Stearns being sold for $2 a share to J.P. Morgan Chase. This picture sums it up cleverly:

To put that in perspective, that deal according to this NYT story values the company at $270 million; which is $5 million less than A-Rod will be paid to play baseball. Take into account also that Bear Stearns’ headquarters on Madison Avenue has been valued at $1.2 billion, and it becomes clear that Bear Stearns is apparently worth a negative billion, and that J.P. Morgan is being paid in real estate to deal with the toxic waste on Bear’s balance sheet. But it gets better for J.P. Morgan, because the Fed has stepped in to assume the risk on $30 million make that billion of those dubious loans. (A good question to ask is whether the Fed gets to keep any profit this $30 million might by some miracle generate. Or do we taxpayers get nothing but screwed out of this?)

As the WSJ piece today puts it, this is a less a bailout than a firewall:

Former Treasury Secretary Robert Rubin last week described the situation as “uncharted waters,” a view echoed privately by top government officials. Those officials have been scrambling to come up with new tools because the old ones aren’t suited for this 21st-century crisis, in which financial innovation has rendered many institutions not “too big too fail,” but “too interconnected to be allowed to fail suddenly.”