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Preheat the oven to 350 degrees. In a large dutch oven over medium high heat pot add the olive oil and bacon pieces. Cook until crisp. Remove the bacon with a slotted spoon.
Salt and pepper the beef and add it to the pot and sear on each side for 2-3 minutes. Remove from the dutch oven.
Add the carrots, pearl onions, and mushrooms and saute 2-3 minutes until tender. Remove and set aside.
Add the red wine to the skillet scraping down the sides and allow to deglaze. Add the beef stock, tomato paste, tomato sauce, and whisk in the flour.
Add the beef and the vegetables and bacon back to the pot and stir. Add garlic, thyme and bay leaf. Put a lid on pot and let it simmer in the oven for 1 1/2-2 hours until the beef is tender.
Stovetop: Bring to a boil and reduce heat to a low and simmer. Cover and let cook 1 1/2- 2 hours or until beef is tender.