Bear Stearns once commended as one of the greatest Investment Firms on Wall Street will soon be absorbed by JPMorgan Chase. A price agreement has been reached and shares of Bear will be swapped for shares of JPMorgan. Shares of Bear Stearns traded for as high as $163 now trades for $10 a share. Only $6 more than when it went public 23 years ago. Getting caught up in the subprime mortgage madness they would soon come undone. In less than a year Bear Stearns would be forced to sell itself or file chapter 7 bankruptcy.

Ticker Symbol: BSC
Company Key Dates:
1923: The original company is founded by Joseph Bear, Robert Stearns, and Harold Mayer as an equity trading house.
1933: Bear Stearns opens its first regional office in Chicago, and Salim L. “Cy” Lewis–future chairman–is hired to direct Bear Stearns’s new institutional bond trading department.
1955: Bear Stearns opens its first international office in Amsterdam.
1965: Bear Stearns begins expanding retail operations in the United States and, over the next eight years, opens offices in San Francisco, Los Angeles, Dallas, Atlanta, and Boston.
1978: Alan “Ace” Greenberg succeeds Lewis as chairman.
1985: Bear Stearns forms a holding company called Bear Stearns Companies, Inc., goes public, and reorganizes from a brokerage house into a full-service investment firm.
1992: Company earnings double to over $295 million for best year in Bear Stearns’s history to date.
1993: James E. Cayne succeeds Alan Greenberg as CEO; Greenberg stays on as chairman.
1999: Bear Stearns agrees to pay $42 million to settle civil and criminal fraud charges in connection with its role as clearing broker for A.R. Baron.
2001: James E. Cayne succeeds Alan Greenberg as chairman.
2001: Bear Stearns completes construction of its world headquarters at 383 Madison Ave, New York, NY.
2003: Bear Stearns along with 9 other of the worlds top investment firms are forced to pay penelaties related to using their in house R&D release false or inflated claims to move stock prices in a favorable manor for the firm.
2006: The company had total capital of approximately $66.7 billion and total assets of $350.4 billion.
2007: Around June 2007 Bear Stearns pumps 1.6 Billion of capital in its Enhanced Leverage Fund and High-Grade Fund to keep them from closing.
2008: Bear Stearns agrees to be bought by JPMorgan Chase for $10 per share, underwritten by $29 billion in special financing from the Fed.

Company History:
Bear Stearns Companies, Inc., the holding company that owns Bear, Stearns & Company, Inc., was created on October 29, 1985, as the successor to Bear Stearns & Company and Subsidiaries, a partnership organized in 1957. The partnership, in turn, was the successor to a company founded in 1923 by Joseph Bear, Robert Stearns, and Harold Mayer as an equity-trading house. Headquartered in New York, Bear Stearns today is a full service brokerage and investment banking firm focused on three core areas: capital markets, wealth management, and global clearing services. The company maintains offices in major cities all over the globe.
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Who’s excited about the tax rebate? Not me. I was thinking about it and on the outside it seems nice, but upon further investigation , its just adding insult to injury. I am looking at potentially receiving $1,200. Not bad. Consider this; I have a 4 cylinder car, with a 13 gal. / 14 gal. tank. It costs me $46 to fill @ $3.29 per gallon. By the time May / June rolls around they are talking $4 + so now it is going to cost me $56 every two weeks. Heating and Electric run me another $150 or so per month. Then another $100 a month to keep my car insured so I can get to my job. Plus , $50 a month so my kids can watch Hanna Montana.

 So I am up to $415 and I have not even bought food to feed myself or my kids. The average family probably spends $100 to $150 per week on groceries since those have gone up substantially as well. So we will say $400, brining us to $815 per month.

Then there is rent , student loans , credit card debt, and so forth. I am not sure if this is what they had in mind when they wanted to stimulate the economy. I am not running out to buy a T.V. or put a deposit down on a new car. All the check is going to do , assuming we still get one, is help not play beat the bank for one month. I hope there are others out there working hard , and in a position to use it to have some fun. I guess I will just have to live vicariously through them.

Congress Sends $168 Billion Economic Stimulus to Bush (Update2)
By Alison Fitzgerald and Brian Faler

 Feb. 8 (Bloomberg) — The U.S. Congress passed and sent to President George W. Bush a $168 billion economic stimulus package that he said is needed to help boost the slowing economy.

The legislation would send tax rebate checks to more than 111 million households, probably beginning in May. Lawmakers yesterday altered an earlier plan by making 20 million senior citizens and 250,000 disabled veterans eligible for the rebates. Bush said he will sign the measure.

“I want to thank the members for passing a good piece of legislation, which I will sign into law next week,” Bush said today in a speech to the annual Conservative Political Action Conference in Washington.

In addition to the rebates and incentives for businesses to invest in new equipment, the measure increases the size of mortgage loans that government-chartered mortgage-finance companies Fannie Mae and Freddie Mac can buy.

Bloomberg.Com – Click for Complete Story

Big moves today. I think there are a lot of stocks for sale. And with the DOW moving down so much , it looks like investors finally realized they better buy some value before things move up and they miss a good deal. I think its a good time to pick up stocks and maybe even flip some for some quick profits. Also always this is my opinion and always due your own research and seek professional advice as needed.

AP
Wall Street Whiplash: Stocks Plunge, Then Post Big Gains on Day After Fed Rate Cut — NEW YORK (AP)

It started with another stomach-turning drop at the open, and a loss of more than 300 points by midday. Then stocks changed course, raced higher and closed with a dramatic gain of nearly 300. This wasn’t just volatility. This was Wall Street whiplash.
Amid tumbling housing prices, an ongoing credit crisis and growing fears of a recession, turbulence has become a hallmark of Wall Street in recent weeks. And after five straight days of pullbacks, analysts saw some positive signs in Wednesday’s trading.

Investors certainly found a reason to buy, perhaps encouraged by the Federal Reserve’s unprecedented 0.75-point interest rate cut a day earlier and a widely held bet on another half-point cut next week. By day’s end, the Dow had swung 631.86 points from its low point to its high — the largest single-day turnaround in more than five years.

Finance.Yahoo.Com – Click Here for Complete Story

AP
Stocks Dive, Then Rebound After Fed Cut
Tuesday January 22, 6:23 pm ET
By Madlen Read, AP Business Writer NEW YORK (AP)

The opening bell hadn’t even sounded on Wall Street when the Federal Reserve announced an emergency interest-rate cut. The Dow Jones industrial average fell 465 points including 300 in the first minute then rebounded to finish down a more bearable 128. The recovery Tuesday was a victory of sorts for a battered market. But a long-term comeback may depend on factors much more difficult to achieve a turnaround in the housing market and renewed confidence among U.S. consumers, who hold up most of the economy.

The alarming early drop in U.S. stocks followed the lead of markets abroad, where investors fled stocks and sent indexes plummeting on fears of a U.S. recession that could spread to other global economies.

By the close, the Dow had recovered to a loss of 128.11, or just over 1 percent, at 11,971.19. Before trading began, the Federal Reserve moved to slash its benchmark federal funds rate by 0.75 percentage points, to 3.5 percent. It was the widest cut since 1990, the beginning of what the Fed says is a comparable period in the way it handled the rate. The Fed cut the discount rate, the interest rate the Fed charges banks directly, to 4 percent, also a three-quarter-point cut.

Finance.Yahoo.com – Click for Complete Story

Time Inc. to Close Business 2.0 
 
By BRAD STONE
Published: September 5, 2007
The latest dot-com casualty comes from the newsstand, not the Internet. Ten editorial staff members from Business 2.0 will join Time Inc.’s Fortune magazine. Business 2.0, a monthly magazine about the new economy, will be shut down rather than sold, its owners at Time Inc. have decided. The publication, which has been suffering from a decline in advertising revenue, will cease publication after its October issue, which will have a cover article on where to invest in a real estate downturn.

According to people familiar with Time Inc.’s handling of the matter, Time turned down offers from Mansueto Ventures, owners of the rival magazine Fast Company, and other prospective buyers to acquire the Business 2.0 brand and its circulation list of 600,000 subscribers.

nytimes.com – Click for Complete Story

Learn to be Poor -
by Sean Taylor

As you search on the net you may encounter thousands of financial articles with clearly depicted methods and practices on how to become rich. This article’s purpose is quite the opposite. This article is going to suggest that you become poor and strapped for cash, regardless of your income.

That’s right folks – poor and strapped for cash. At this point every reader probubly thinks I am crazy, however it is the best way to actually build wealth.

The concept here is that you create additional vehicles that eat up your cash. Right now, you have a mortgage, bills, etc. However you have no wealth bulding expenditure. The goal is to create automatic withdrawls from your checking account that mirror additional expenses, but actually feed your portfolio. Even the more liquid assets should be allocated in time delay systems, like an online bank (takes 3 days to get payout).

So what? What does this all do? By draining your easily accessible accounts on a systematic basis, you are effectively reducing your spendable income and making yourself “poor”.

Think of it this way – if you go to the store and have 5 dollars in your pocket, how sensitive are you to buying something that costs $3.49? Now what if you were looking at ths same $3.49 item, but you had $100 in your pocket. You would be much more likely to rationlize the purchase of the $3.49 item if you had $100.00 in your pocket because there is plenty of extra money you can use to purchase something else if you need to. With only $5.00 in your pocket, you must select your purchases carefully to maximize value, because there is little room for error.

A very common saying is “a penny saved is a penny earned”. This saying does not take into account the fact that “all those pennies” can earn returns over time. This concept supports the idea that setting up your finances in a way that promotes cost sensative behaviors while increasing the returns by laddering investments given the individuals risk tolerance to provide additional returns.

There may be more on this at later times depending on the feedback. Let me know what you think.

Concept Keys -

1) Make a montly budget
2) Open high interest or brokerage accounts
3) Consistently funnel money into the accounts, pay monthly, automatically as if they were bills
4) Adjust investments based on risk tolerance and liquidity needs
5) Recreate budget including extra investment contribitions as expenses. Treat these as if they are bills, and scrape by on the leftover income.
6) Adjust savings ratio if needed, repeat process to ensure it isn’t too excessive.

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