Mortgage and long-term Treasury rates are falling suddenly today, as the U.S. Securities and Exchange Commission’s fraud charge against Goldman Sachs is tanking the stock market.

It couldn’t happen to a nicer bunch of people: The 10-year Treasury note has broken below recent 3.8 percent resistance to 3.77 percent, with mortgages headed toward 5 percent.

Interpreting new economic data is trickier than ever, even for professionals, as an odd confluence has tipped public sources into uniform economic cheerleading.

The whole country would like not to hear another word about recession, and is hungry for news of recovery. Media tend to supply whatever it takes to sell soap.

CNBC years ago dispensed with "real" news. Bloomberg television was a reliable replacement, but this winter cloned CNBC’s grinning kids in happy talk (its Web-based news is still as straight as anything available).

The Wall Street Journal under Rupert Murdoch is dumbing-down to the USA Today of business. It does have the old, reliable hostility to real estate and government, but its stock-boosting leads to a parade of "strong recovery" stories. The New York Times has been the counterweight, but now it has a president who it likes, and pushes administration success and recovery.

Meanwhile, the economy is in a cycle never seen before, parts in actual recovery, parts not, and which one is predominant and trend-setting should preface every story.

The legitimate good news this week: March retail sales jumped 1.6 percent. If only by means of stimulus doesn’t matter — the deficit spending and big tax refunds are supposed to work. Industrial production crept upward 0.1 percent, but capacity in use has been in a steady climb to 73.2 percent, as has every measure of manufacturing.

Some of that is just pipeline-filling, but some is honest exporting, as the emerging world and Asia continue to rocket and consume. China’s gross domestic product shot up 11.7 percent in the first quarter. …CONTINUED

That’s it for the good news. Careful readers saw mini-stories about another jump in unemployment claims, up 45,000 in two weeks. Harder to find: a sudden sharp drop in purchase mortgage applications, just when the expiring tax credit (and that recovery thing) was supposed to boost them.

The major dailies dutifully reported the chasm between administration housing policy and result, but with far too much deference.

I could not find the following news in any outlet listed above:

  • The National Federation of Independent Business has been the definitive small-business trade group and surveyed its members since 1973. It issued two reports this month: its regular survey opened, "The persistence of index readings below 90 is unprecedented … 18 consecutive months." Every sub-index chart shows a recession-level L-shape tipping to weaker. The top small-business problem is basic: Sales volume is awful.
  • The second report, at, is a special study on small-business credit, and Federal Reserve Chairman Ben Bernanke’s testimony revealed the Fed had assisted its preparation (no leading outlet gave priority either to the study or the Fed’s involvement). The title revealed most of the 45-page content: "Small Business Credit in a Deep Recession." The report detailed a crucial linkage — and surprise to the NFIB itself: Small business is terribly reliant on real estate credit, and that is in the shortest supply of all.

Bernanke gets it, now. Fed commentary has been stuck on the banker line, that credit is short because applicants are lousy, but the chairman’s testimony changed: "Banks have been … imposing tough lending standards and terms; this caution reflects bankers’ concerns about the economic outlook and uncertainty about their own future losses and capital positions."

Thank you, sir. Better late than never.

Jamie Dimon preened at Chase’s 55 percent pop in first-quarter earnings, and noted the splendid health of big business. (Perhaps he doesn’t know any small-business people … he probably wouldn’t want his daughter to marry one.) The fine print in Chase’s quarterly result: Three quarters of the $3.3 billion net income was from trading profits, not from lending, and new bad-debt charge-offs continued their $7 billion-per-quarter pace.

Lou Barnes is a mortgage broker and nationally syndicated columnist based in Boulder, Colo. He can be reached at


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