Jitter bug

Shareholders in US investment banks have hit the panic button. In the last few weeks they have wiped a combined $40bn in value off the top five Wall Street firms. That’s either an extreme overreaction to the sub-prime mortgage crisis. Or investors are getting jittery about a much broader pummelling for financial markets. After all, the fall in share prices implies an earnings drop this year for the group of about $4bn, with each brokerage trading at just under 10 times earnings. But they probabl...