Bear Stearns collapse a bear market bottom signal?

A recession is defined as two consecutive negative economic growth quarters, and since there hasn't yet been one quarter full negative economic growth quarter it remains too early to tell if we are officially in a recession or not... But then again, who cares?

The stock market is way down on the year and most investors (myself included) have taken heavy losses. Recession or not, we are in the midst of a bear market and at the end of the day isn't that what we care about as investors? I am more than a little sick and tired of the endless debate in the press (especially on CNBC), over whether we are in a recession or not. Here is a suggestion... lets discuss the market, whats working in the current bear market, what isn't, and when do we get back in?

Many market annalists are pointing to the Bear Stearns collapse (and subsequent Fed sponsored JPMorgan bailout) as a bottom signal and I tend to agree. Over the last week the market has shown new signs of life, fueled I believe, by a feeling of relative security. You see the Fed has now made it clear that it will act to protect individual investors (i.e. Bear account holders), and now that there is some blood on the ground on Wall Street, they have also opened the discount window to a wider array of financial institutions on order to prevent more bloodshed.

New York magazine has an interesting article on the Bear Stearns collapse (complete with a handy Bear Stearns collapse timeline) here.

So, is it time to get back in to the market? I think you can slowly increase you position in equities that have been over sold. This may not be the absolute bottom but I believe it is a sign the we are close and as a result it is time to start looking for value in the bear market rubble. Happy hunting!