And just like that, the Federal Reserve bailout story disappears from the pages of The Wall Street Journal. There’s not a word about it anywhere in the paper on the second day of this story.

Yesterday I criticized the Journal for being alone among the big papers in not putting the news on page one. Today, it has the Washington Post as company among big papers without a Fed bailouts story. Needless to say, coverage and non-coverage in these two papers, disproportionately read by the wealthy and powerful, is critical.

The Financial Times gives the Fed story front-page play again and zeroes in on the wave of toxic assets it accepted as collateral for its enormous emergency loans:

More than 36 per cent of the cumulative collateral pledged to the US central bank in return for overnight funding under the Primary Dealer Credit Facility was equities or bonds ranked below investment grade. A further 17 per cent was unrated credit or loans, according to a Financial Times analysis of Fed data released this week.

The New York Times drops its second-day coverage to the Business Day cover from page one yesterday. Today it writes about more of the rich and connected people who took the Fed’s almost-can’t-lose investment subsidies in its TALF program.

Bloomberg has a good story looking at the conflicts of interest created by the Fed.

Pacific Investment Management Co. and BlackRock Inc. weren’t only advisers to the Fed, they were also trading securities they helped value, the Fed data show….

The New York Fed hired Pimco, based in Newport Beach, California, to value collateral, monitor the credit risk of TALF participants and assess the securities market, according to the Inspector General’s report. BlackRock Solutions, a unit of New York-based BlackRock, said it was brought on to supply analytical help on the securities.

The two firms also participated in TALF as borrowers on behalf of clients, along with other financial companies. Pimco tapped TALF 96 times between April 2009 and March 2010 for a total of $7.26 billion, according to Fed data. Ten funds connected to BlackRock Financial Management Inc., another unit of BlackRock, borrowed a total of $2.8 billion for clients, the Fed disclosed.

That’s okay, PIMCO and BlackRock say: We have Chinese walls.

Finally, the FT’s Gillian Tett has some thoughts on why this is more about the breakdown of the shadow banking system than anything else:

But what Wednesday’s release shows is that this focus on the “obvious” bail-outs misses the point; instead (as I noted in a recent column) the crucial issue in the recent financial crisis was the fact that the murky shadow banking world froze up. What the Fed was in essence doing with much of its $3,300bn programme - under all those strange acronyms - was replacing the securitisation market, and providing liquidity to the system; in a sense, the Fed became the market in 2008 and 2009, not just in the US but parts of Europe too…

It also shows exactly why regulators and politicians have the right to demand reform.

After all, having used $3,300bn to support the financial system, the Fed and others have every right to demand as much as they can in return, from both US and non-US banks. Extracting much better data from the banks (and others) would be a good place to start; not just to make it easier to fight today’s crises in Europe, say - but also to prevent European and US banks from becoming entangled in such a dangerous web of interconnected deals again.

And Aaron Elstein has a great column running down some of Wall Street’s biggest lies exposed by the Fed data:

We really didn’t need the money. Really.

“If we were not forced to take the TARP money, we would have been able to raise private capital at that time.”
—Wells Fargo Chairman Dick Kovacevich, in a March 16, 2009, Bloomberg article (Mr. Kovacevich later called the government-mandated stress tests “asinine,” although bank stocks rallied strongly after they were administered.)

Except for this bit.

Wells Fargo ranked behind only Bank of America as the largest recipient of assistance under the TAF program, according to Bloomberg. Wells Fargo had $45 billion worth of borrowings as of late February 2009. The bank may have needed to borrow so much cash because it inherited a truly dreadful mortgage portfolio when it acquired Wachovia in late 2008.

Nicely done.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.