CNBC's Jim Cramer Advises Investors - "Bear Stearns Is Fine, Don't Be Silly"

By MoneyBlueBook

This is so classic. On March 11, 2008, this financial commentary by "financial guru" Jim Cramer was featured on his popular Mad Money television show on CNBC. The customary Cramer angry rant was made in response to a call and write-in question about the serious viability and liquidity concerns regarding Bear Stearns, one of the world's largest global investment banks and brokerage firms, and a company that has been hit particularly hard by the subprime mortgage meltdown. The abbreviated Mad Mail question and exchange can be viewed on Jim Cramer's CNBC Mad Money Blog. Frankly, his response should be written in all caps, since he tends to holler his answers. I wouldn't be surprised if Jim Cramer later requests to have it take down out of sheer embarrassment.

This is what blindly listening to the advice and commentary of financial gurus and pundits in the mainstream financial media outlets like CNBC will get you:

Tuesday, March 11, 2008 On Mad Money

• Dear Jim: "Should I be worried about Bear Stearns in terms of liquidity and get my money out of there?" - Peter
• Jim Cramer: "No! No! No! Bear Stearns is fine. Do not take your money out. Bear sterns is not in trouble. If anything, they're more likely to be taken over. Don't move your money from Bear. That's just being silly. Don't be silly."

Friday, March 14, 2008:

With liquidity problems snowballing and financial conditions deteriorating, Bear Stearns reaches for a life preserver, and works out a financial rescue deal with JP Morgan Chase and the

By MoneyBlueBook

In response to heightened concerns surrounding recent plunges in world stock markets and fears of an imminent economic recession, the U.S. Federal Reserve made a surprising rate cut on Tuesday, January 22, 2008, days before its next official meeting when it is expected to cut rates further. In the daring move, the Fed slashed the federal funds rate from 4.25% to 3.50%, an astonishingly huge drop. In response, numerous online banks have already dropped their interest rate offerings to match - Take a look at my updated list of the top High Yield Savings Accounts.

Countrywide Bank continues to reign at the top with a tiered rate offering of (3.92% - 5.00% APY). I hope a few of my long time saving favorites like Washington Mutual and Etrade Bank will hold rates steady and high but they are likely to be influenced by the trend as well. Among the online banks, a few more major interest rate reshufflings are likely to occur again in the next few weeks.

By MoneyBlueBook

Note: If you wish to understand more about the the 2008 Economic Stimulus Package, please read my entry regarding the tax stimulus rebate payments. I have also updated the subject with an entry discussing the possibilities of a 2009 economic stimulus check as well.

In response to the dramatic drag on the economy caused by the developing housing crisis and mortgage meltdown, the federal government has finally stopped dragging its knuckles on the ground and sprung to action - proposing to send taxpayers rebate checks in an effort to jump start the economy. Under the current bipartisan proposal, most taxpayers would be eligible, with $600 checks going towards individuals who pay taxes, $1,200 going towards working couples with an additional $300 for each children, and even $300 going towards anyone who earned a paycheck even if they made too little to pay income taxes. Many details in the package have yet to be hammered out including the business stimulus portion that provides additional tax breaks for businesses that purchase capital equipment as well as the housing assistance portion that helps riskier borrowers, who have been shut out of the tanking subprime mortgage market, qualify for Federal Housing Administration (FHA) loans.

The current tentative proposal still needs to be be rammed through the House of Representatives, the Senate, and ultimately approved by the President to be made official, but so far the likelihood of it happening looks very promising. There is great congressional and presidential pressure to speed this through the system and

By MoneyBlueBook

These are uneasy times if you are an E-Trade broker customer or investor. For those who bought and currently own E-Trade stock, these are probably one of the most trying times you've ever faced as share prices have plummeted more than 90%within the last year. Triggered by Citigroup's downgrade in November 2007, many investors and account holders are fearing the worst and some have jumped ship, shifting their assets to another brokerage firm. Just yesterday share prices tanked more than 20% in yet another day of volatile trading in response to further analyst warnings that E-Trade is in dire need of an additional capital infusion to stay in business.

Shareholders are bailing - a grave concern for many current E-Trade brokerage account holders as many fear for the safety and security of their stock investment accounts. E-Trade has released numerous press releases and web based announcements to reassure customers that they have taken drastic steps to shed exposure to the dreaded mortgage backed assets that have been generating so much business losses, and that they currently have the necessary capital liquidity to stay afloat.

If you're an E-Trade account holder, you can sigh in relief as your assets are generally well protected. However, if you're an actual E-Trade stock investor - my condolences, as you may be of luck unless you could somehow successfully demonstrate that you were defrauded.

Escape From E-Trade If You Must, But Your Assets Are Secure

I used to be a long time E-Trade customer but eventually

By MoneyBlueBook

Comparing financial networth can be tricky since you aren't always comparing apples to apples and oranges to oranges. Married individuals that combine the incomes and assets of both spouses will clearly have much higher networths and much lower expenses than single individuals.

With that in mind, here is some background information to help you know where I stand. I am currently in my late 20's, not married, currently renting, and working a contract job that pays reasonably well. I graduated from law school a few years ago and am still trying to figure out exactly what is it that I want to do professionally. I took things easy after graduate school, choosing to enjoy life and neglected the importance of saving early. I did not start tracking my finances and focus on saving until the start of 2007 last year. All of my savings and investments were initiated one year ago on January 2007. Here is the summary of my 2007 financial progression and where I stand now.

Tracking My Financial Progress Using Networth IQ

I've held off from using Networth IQ to track my financial net worth and progress due to my original dislike of the program's overly simplistic graphical chart displays. For such a popular widget among financial bloggers, you'd think the company would have come out with a nicer and more sophisticated looking display. But I've finally caved and have decided to enter in my stats and will be tracking my monthly progress from here on, starting January 2008. It'll be interesting to

By MoneyBlueBook

I was routinely checking my Citibank balance online the other day when I noticed a little warning box above my account balance mentioning something about a savings account transfer limit of 6 per statement cycle imposed by a federal rule called Regulation D. I had heard about it before but never previously paid it much attention. Examining the reminder message, it was clear to me that this was something that might easily be overlooked by the average savings account holder. It's the type of important information that should be, but isn't readily advertised enough by banks. Particularly at this stage of the current ongoing economic crisis as high interest savings accounts continue to rapidly grow in popularity, it's more important than ever to be mindful of the transactional limitations of such accounts. Your money may be earning the highest interest rates at the top savings banks, but the trade off is a reduction in liquidity and access to funds.

Banks Place A Limit On The Number of ACH Transactions You May Execute Per Month

Bank savings and money market accounts are regulated by the Federal Reserve Board's Regulation D, which governs deposit accounts and their reserve requirements. The reserve percentage is the amount mandated by federal law that banks must retain in house and not loan out to customers. For savings and money market deposit accounts, Regulation D limits the number of electronic ACH transfers that one can make to 6 per statement cycle, which is about a month. While the regulation doesn't impose a