Just how screwed is our financial system anyway?!?

This is probably way off topic for a peak oil oriented blog, but I am just blown away by this.

Bear Stearns is a large US financial institution. Reportedly the fifth largest in the country. Other than being a little more heavily invested in hedge funds and mortgage-backed securities, their business practices apparently weren’t especially different from any other investment houses.

A little over a year ago, Bear Stearns stock was trading at over $170 a share.

Two weeks ago, Bear Stearns was trading at $85 a share.

At the opening bell last Friday morning, their stock was trading at $55 a share. As rumors of its imminent collapse due to the ongoing credit crunch became rampant, shares fell to $30 by the end of the day. This was despite a hundred life preservers being tossed their way over the last couple months, by the Fed and others.

Today it was announced that JP Morgan Chase will buy Bear Stearns…

…for two dollars per share.

Yikes.

Please keep your hands and arms inside the ride at all times until it has come to a complete stop.

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One Response to “Just how screwed is our financial system anyway?!?”

  1. Wendy Says:
    March 17th, 2008 at 9:36 am

    I think this is a perfect topic for a Peak Oil blog, because it’s all related. The things we’re going to have to deal with in a post-Peak Oil world will be the same things we have to endure when our economy collapses. The question is not “if” for both scenarios, but “when”, and which will happen faster. With the rise in oil prices, which affects every.single.thing we buy, sell, and manufacture in this country, the economy is bound to take a hit, and preparing for life outside of the money-economy will do us all some good.

    Yikes is right, though. Yikes! Indeed ….

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