Geithner goes from goat to golden boy

Talk about March Madness.

Treasury Secretary Tim Geithner, the economic goat of the two-month-old Obama administration, released details of his toxic-asset plan and promptly turned golden boy -- at least for the day.

He can't claim as definitive a win as the Gopher women hoopsters did Sunday against Notre Dame. Still, Geithner and the market had a good day. The Standard & Poor's 500 index of America's biggest companies, led by financial stocks, rose 7 percent on Geithner's government-assisted plan for private investors to buy hundreds of billions of discounted housing bonds and other distressed assets from overburdened financial titans.

And it's not just that Geithner finally delivered more burger and less bun than he did on the same topic just six weeks ago. No, despite all the sour economic news and last week's televised rancor over the AIG bonus debacle in Congress, our economy may have bottomed.

We are far from out of the woods.

"But I'm optimistic about the [Treasury] program and I haven't been that optimistic about [Geithner's] earlier proposals," said Chris Sebald, chief investment officer of Advantus Capital in St. Paul. "I think this new government program may put some fire under the market. There may be a lift in asset-backed and commercial mortgages."

The rebound will be slow and not without stock-market setbacks, said Sebald, whose firm is the investment unit of big Securian Financial.

The jobs and industrial production and mortgage delinquency numbers are going to be bad in the first quarter.

The credit markets are stronger than they were in November. Demand for existing homes climbed 5.1 percent in February, above expectations. Of course, that's driven by foreclosure sales. And median sale prices are still dropping, the National Association of Realtors said Monday.

But we're getting closer to a housing bottom.

Anecdotally, the New Flyer manufacturing plant in St. Cloud is adding workers. My local hardware store had more customers this weekend. A young fellow is buying a tidy, little house in north Minneapolis for a song. And that despised "foreclosed" sign will soon go down.

Monday's huge day in the stock market kicks off the third consecutive week of rising markets since the most-recent low reached March 9.

And it's time to start recovering, two years after the housing bubble burst.

"It's just hard to argue that there isn't an improvement in economic activity on the horizon," Jim Dunigan, executive vice president at PNC Wealth Management, told the Associated Press.

Travelers Companies, now the largest U.S. insurer by market value (it used to be AIG), is considering acquiring assets through the Treasury's toxic assets program. "We would look at the possibility of participating as a buyer," spokeswoman Jennifer Wislocki told Bloomberg News Monday. "We don't need to participate as a seller."

Analysts said they saw more fundamental strength in Monday's buying than they saw at the start of the two-week old rally. That's a good sign. And a strengthening, sustained stock market rally would be a harbinger of an improving economy. Traders reported less short covering, which occurs when market doubters are forced to buy to cover misplaced bets that stocks would fall.

Sensing good buys, money managers and other institutional buyers are starting to buy shares of downtrodden banks and manufacturers.

I like the way he concluded. And I'm betting on our people, our economy, even our government to get us back to work and get our retirement funds pointed northward.

"Perhaps the best economic indicator of all, or at least the most welcome, is the fact that stocks are now up 18 percent from their low of March 9," Joy said.

I'll take that for today.