Various news sources report that midtown real estate goes for about $1,000 per square foot.  At 1.2 million square feet, Bear Stearns’ headquarters on Madison Avenue is worth about $1.2 billion.

Yet shareholders are only getting $240 million.

Which means that either a) there is something seriously upside-down about BS’s balance sheet, or b) there is something seriously upside-down about BS’s balance sheet.

According to google finance, in nov ‘07 BS had $395 billion in assets and $383 billion in liabilities.  That leaves about $12 billion for equity.  So what happened?

In Sept ‘07, Bear announced that it had $45 billion of mortgage related assets on its balance sheet. (in an effort to be more 80/20, i’m not going to dig for more recent numbers)  All else equal, the mortgage related assets would have had to fall by $12 billion to put the firm underwater.  That’s roughly a 25% drop.

Is that the same math that counterparties were doing when they refused to trade with Bear Stearns?   Time to go digging for some real analysis…which is what makes the Internet so incredibly awesome right now…there is just so much information out there.