Roger’s Rules

What happened to the good news?

On January 27, Bloomberg news carried a story that, in a rational world, would have been plastered over the front pages of our major newspapers to the jubilation of financial pundits everywhere. The story was about General Electric’s cautious reentry into the commercial paper market, the unsecured IOUs that banks and large corporation issue in order to fund their daily operations. It only works if those entities can find sources willing to give them some dough in exchange for the promise to pay. “Seventeen months after seizing up at the onset of the credit crisis,” the story tells us, “the $1.69 trillion commercial paper market may be the first to cut its reliance on federal bailout programs.

About $245 billion of 90-day commercial paper that companies sold to the Federal Reserve starting in October will mature this week and next, central bank data show. As much as $50 billion to $70 billion of the debt may be rolled over and bought by investors, according to Barclays Capital in New York.

The market’s ability to absorb the maturing debt may build confidence that U.S. companies are able to fund themselves without government support, said Deborah Cunningham, chief investment officer for taxable money markets at Federated Investors Inc. Investors, betting the commercial paper market has stabilized, pushed interest rates to record lows this month and bought the most 90-day debt since September, Fed data show.

This is one of many good bits of economic news that have emerged in the last month or so. Why is it not being ballyhooed about the media? My guess: because self-indulgent wallowing in hysterical gloom is more fun.

Timothy Geithner, the new Secretary of the Treasury, may be right that “We are at a moment of maximum challenge for our economy and our country.” But unlike his predecessor, he didn’t tell the American people they should be more scared than mad (thanks, General!), he signaled his belief in the free enterprise system, pledged to “limit government intervention to where it is essential to protect our financial system,” and said he would work to increase “transparency and oversight” regarding the gobs of money the government is planning to dispense under the aegis of TARP, promising to place all TARP investments on the Internet “so that taxpayers can see how their money is being spent and the terms these institutions must agree to before we invest taxpayer money.” It’s not often enough that you hear people in Geithner’s position acknowledge the fact that the money they are spending is the taxpayer’s, i.e., your money (assuming, of course, that you are not among the 43 percent of those who file a return but pay no income tax).

Anyway, I like the noises Geithner is making. I am sure there is more bad news ahead. But there is good news, too–just this morning, we learned that the economy last quarter contracted less than it was expected to. But that can be reported in two ways. If you’re Reuters: you trot out a Chicken Little headline that says “GDP sees biggest drop in 27 years“. If you are the more moderate Drudge Report, you point to a story on Bloomberg and supply a tag line that reads “Economy Shrinks at 3.8% Pace, Less Than Estimated…” See the difference?