Stocks jumped on Thursday due to several factors, according to the USA Today, Wall Street Journal and Associated Press. A government report that filings for unemployment benefits dropped dramatically last week, reaching the lowest number since May of 2008, spurred the rally. This was solidified by reports that retailers, including Macy's, Nordstrom's and Limited Brands, all had a solid February. Walmart raised its dividend by 21%. This left the Dow closing up 191.4 points, still below the February 18th peak, despite the fact that oil continues to be at over $100 per barrel.
The Washington Post reports that government pension funds are understating the amount owed to the 17 million state and local government workers by $1.5 trillion or more. The report from the Center for Retirement Research at Boston University indicates that current accounting records which list the shortfall at $344 billion are not realistic under most accounting methodologies. The assumptions presume an annual rate of return of 8% which is not realistic under most actuarial calculations.
The average 30 year fixed mortgage fell to 4.87%. The 40 year low was in November 2010 when the rate hit 4.17, according to the Wall Street Journal and USA Today.
The Federal Reserve "Beige Book" report that tracks the 12 regions of the Federal Reserve reports modest to moderate growth in 10 of the 12 regions according to USA Today. Retail sales increase in 10 of 12 regions. Many, however, may have to raise prices soon, increasing the risk of inflation. There is little evidence that wages are increasing in any of the regions.
British Petroleum announced that it will not be paying bonuses to those oil executives who had responsibility for the Gulf of Mexico operations. According to the Associated Press, Bob Dudley, Chairman, also chose to forego a bonus. Future standards will include safety as part of performance goals.
The New York Times reports there is fear of another real estate bubble...this time for farmland. There have been double digit increases in the prices paid in the last year for farmland in Illinois, Indiana, Iowa, Kansas, Minnesota and Nebraska. The Federal Reserve reports a 23% rise in Iowa farmland. Approximately 25% of sales are attributed to investors. The fear is that farmers will borrow against land they currently own to purchase new land. Thirty years ago this occurred placing many farmers in desperate economic situations when the price of commodities and land fell.
The Times also reported that there are calls by Congress for the President to draw upon the strategic oil reserves that are currently full to capacity. The President, however, said that it will send the wrong message to the world and that gas prices have not yet risen that much........and the last time he filled is tank was???
The New York Times also reported on increasing stress among drug cartels due to gold mining activities in Columbia. The export of gold increased 30% in the past year and is in response to the high prices of gold.
According to Fox News, Utah is set to vote on whether it should return to the gold standard. Utah is set to vote on whether gold and silver coins issued by the U.S. can be used as currency. The gold standard ended 80 years ago and Richard Nixon in 1971 officially stopped the U.S. from redeeming dollars for gold. Bernanke said that a return to the gold standard is impossible because there is not enough gold in existence to cover the U.S. dollars. Ten other states are considering similar actions.
Mazda announce the recall of 52,000 2009 and 2010 Mazda6's. The recall is due to spider webs, according to the Washington Post. Apparently YellowSac spiders found in the U.S. do not like the cold and have crawled into the fuel lines of the cars. As one expert mentioned, perhaps they like to "Zoom, Zoom, Zoom".