March 5, 2010, 4:00 pm EST — Closing Thoughts … The Standard & Poor’s 500 index closed up 15.72 (1.40%) to 1138.69, as the government’s employment report showed fewer jobs losses, while unemployment remains at 9.7 percent. Employers cut 36,000 jobs last month, better than the 50,000 cuts forecast by economists polled by Dartline. Whether the numbers are reliable is anyone’s guess — and who cares? Dartline suggested traded the spin and who ever did was a big winner today. As posted in Market Outlook – “Whatever the number it positive, even if its fake. ” … Benchmark crude for April delivery rose $1.29 to settle at $81.50 a barrel on the New York Mercantile Exchange. The 2010 high for oil was $83.95 on Jan. 11, about the same time that retail gasoline prices reached a high for the year of $2.7583 per gallon. Crude has bumped around the $80 mark time and again over the past few months, only to be pushed back on conflicting signals about the recovery from the Great Recession. …
— Underreported: The Federal Reserve reported that consumer borrowing rose by $4.96 billion in January, surprising economists who were looking for borrowing to decline by $4.5 billion. Indeed, it was the first gain after a record 11 straight declines and it was the largest increase since July 2008. In percentage terms, the overall increase was an advance of 2.43 percent and followed a revised 2.23 percent drop in December. The strength in January came from a $6.62 billion increase in borrowing for auto loans and other types of non revolving debt. That represented a 5.01 percent gain and followed a 3.69 percent rise in the auto loan category in December. Credit cards and other types of revolving credit fell $1.66 billion or 2.3 percent. Even with the decline, it was a much smaller drop than the 12.9 percent plunge in December. Credit card borrowing has now fallen for a record 16 straight months although the January decline was the smallest since July. … The second straight month of increases in auto loans and the slowing of the decline in credit card borrowing could be an indication that consumers are beginning to feel more confident about boosting their spending and increasing debt. That development is seen as critical to providing support to the overall economy, which is still struggling to recover from the worst recession since the 1930s. During this run — the official number was that 8.4 million jobs were eliminated. Add 5 million more and the totals are more actuate. The rise in overall credit pushed consumer borrowing to a total of $2.45 trillion, still 4.2 percent below where borrowing stood a year ago. The Fed’s measure of consumer borrowing excludes home mortgages and other types of credit secured by real estate. .. While economists have for years worried about the low rate of personal savings in the United States, analysts have begun to be concerned that unless borrowing stabilized it could derail the recovery because it would contract consumer spending. Such spending accounts for 70 percent of total economic activity. Dartline doubts the numbers and believes that consumer borrowing has contacted. The government claimed — The strength in January came from a $6.62 billion increase in borrowing for auto loans and other types of non revolving debt. That makes sense since auto loans are easy to get, even if you have zero credit. Whether these loans would be repaid is another story. As for credit cards and other types of revolving credit falling — are not believed. New accounting tricks to “hide losses” removed a large portion of these toxic assets from their collective balances sheets. Smoke and mirrors are alive and well in Stockville. Apparently, Obama Nation is playing in the same sandbox?