Can somebody please tell me how Bear Stearns (BSC) stayed in business all this time? My brief encounter with this company's brokerage business 3 months ago (via Fisher Investments, which uses them as a primary custodian) made me want to run and run fast. It looked like their customer facing software technology was from computer stone age and their customer service made discount brokers look really good. Hurray to Charles Schwab, E*Trade, Scottrade, Fidelity and etc.

On the other hand, JP Morgan (JPM) is only paying $2/share for Bear Stearns stock. This is the same company that was trading north of $150/share a year ago and was still being sold for more than $50/ share on Friday morning - the same day that Bear Stearns was telling analysts that it's book value is $80/share.

If that's true, JP Morgan is getting a hell of a deal. For under $250M they are buying an 85 year old company with oodles of relationships. Yes, it has has $33 Billion of total mortgage-related holdings, but even if all that exposure goes bad and the book value of $80/share is reasonably tangible, they still come out way ahead. And what if things are worse than everybody expects? Well, the Federal government is making this transaction virtually risk free for JPM, by guaranteeing it!

Now, considering that JP Morgan stock is trading at depressed levels as it is, Monday may bring a great opportunity to pick up some of their stock.