Lt. Col. Johnny W. Kelley, U.S. Army retired of Fayetteville

Lt. Col. Johnny W. Kelley, U.S. Army retired of Fayetteville passed away January 12, 2014.

Col. Kelley graduated from Fayette County High School and North GA College. He served a combined 28 years in the infantry, field artillery, anti aircraft artillery, finance corps, and civil affairs units of the U.S. Army, during WWII, Korean War, and Vietnam War.

Col. Kelley’s hobbies include golfing, hunting, fishing, and gardening. He was a long time member of the Military Officers Association and the New Hope Baptist Church.

read more

via The Citizen

Producer Prices Jump Most Since June, Over Half Of Core Increase Due To Tobacco Prices

Following October and November’s disturbing declines in Producer Prices, which many misread as an indication that the Fed will delay tapering for a few months, today’s PPI reversed the recent drop, and posted a 0.4% jump for the headline number in line with expectations, following two months of declines and the highest print since June’s 0.6% sequential increase. And while the Foods PPI dropped by 0.6% in December, Energy prices jumped by 1.6% once again the highest monthly increase since June. But it was the core increase of 0.3%, the highest jump since July 2012 that caught everyone’s attention. So is inflation finally seeping back in the production channel? Not really: as the BLS reported, “Nearly half of the December increase is attributable to prices for tobacco products, which climbed 3.6 percent.” So bad inflationary news for smokers. For everyone else (who eats and drives hedonically) the status quo still remains.

Still at a 1.2% increase in headline PPI, compared to expectations of 1.1%, and November’s 0.7%, this was the first beat in annual producer price inflation expectations since June, and means that this data point will not deter the Fed from tapering more as it has warned it will likely continue to do.

Broken down by components:

The breakdown in finished goods PPI:

Leading the December rise in the finished goods index, prices for finished energy goods increased 1.6 percent. Also contributing to the advance, the index for finished goods less foods and energy moved up 0.3 percent. By contrast, prices for finished consumer foods decreased 0.6 percent.


Finished energy: Prices for finished energy goods climbed 1.6 percent in December, the largest advance since a 2.5-percent jump in June 2013. Over half of the rise in December can be traced to a 2.2-percent increase in the gasoline index. Higher prices for diesel fuel and home heating oil also were factors in the advance in the finished energy goods index. (See table 2.)


Finished core: The index for finished goods less foods and energy moved up 0.3 percent in December, the largest advance since a 0.5-percent rise in July 2012. Nearly half of the December increase is attributable to prices for tobacco products, which climbed 3.6 percent. Higher motor vehicle prices also contributed to the advance in the finished core index.


Finished foods: The index for finished consumer foods fell 0.6 percent in December following no change in November. Leading the decrease, prices for fresh and dry vegetables dropped 13.4 percent.

The real question remains: will Japan continue to export its deflation to the world, and the US, and if so is the recent jump just a one-time fluke?


via Zero Hedge Tyler Durden

Empire Fed Beats; Spikes To Highest Since May 2012

After 5 months of missed expectations, Empire Fed manufacturing beat expectations by the most since Feb 2013, spiking to the highest since May 2012. Most sub-indices were positive but it is perhaps worth noting that despite all this exuberance, over 70% of companies expected no improvement in employment and over 80% expected no improvement in the average workweek. While inflation is nowehere to be seen, it is interesting that the Empire Fed’s Prices Paid index spiked this month by the most since March 2012. Hope remains that Capex and Tech Spend will pick up as the outlook index rose by the most in 5 months (though remains historically low).



Charts: Bloomberg


via Zero Hedge Tyler Durden

Brookings Moneyball Scores: Ted Cruz Most Efficient Senator, Ron Wyden and Rand Paul Most Effective

The Brookings Institute has

scores ranking how effective members of Congress were
in 2013. And by “effective” they mean how effective congresspersons
were at getting their proposed legislation through committee, a
major hurdle in the legislative process. What they find may
surprise you.

Sen. Ted Cruz (R-TX) was the most efficient
Senator, which means Cruz got the highest percentage of
his proposed bills through committee (7 out of 8). Compare this to
Sen. David Vitter (R-LA) who proposed 61 pieces of legislation and
literally none of them made it through committee.

Using another metric to define productivity, Sen. Ron Wyden
(D-OR) and Sen. Rand Paul (R-KY) had the highest number of their
bills make it through committee, 13 and 11 respectively. Thinking
about this another way for instance, Rand Paul was 4x as effective
at getting bills through committee than the average Senator would
be expected to.

It may surprise some that Paul and Cruz, two senators dubbed tea
party “wacko
” could be so effective in getting their legislation
through committee. It demonstrates that while these Senators are
often defined by their willingness to take ideological stances on
issues, albeit different stances at times, they are also willing to
engage with the actual political process in efforts to make

Here are some examples of what Rand Paul has gotten through

The Fourth Amendment Restoration Act
is an effort
to prevent US government agencies from searching
Americans’ phone records without a warrant based on probable

The National Right-to-Work Act, would
existing law in efforts to reduce the use of coerced
union membership as a condition of employment.

The Separation of Powers Restoration and Second Amendment
Protection Act
essentially tells
the President that Congress will not accept
any executive orders, signing statements, or expenditures of
federal funds on projects or programs not appropriated to the
executive branch.

The Default Protection Act outlines
priorities for federal government obligations if the debt limit is
reached, including paying the interest and principal on public
debt, paying benefits to members of the Armed Forces, and paying
Social Security and Medicare.

Aside from getting bills through committee, examining simply the
number of bills proposed, Democratic senators and Bernie Sanders
(I-VT) took 9 of the 10 top slots, while Vitter, the lone
Republican, was first in proposing the highest number of bills. (In
the Republican-controlled house, Democrats also took a higher share
of the top slots with 7 of the top 10 bill proposers compared to 3
in 10 being Republicans.) 

from Hit & Run

A.M. LinksL Corruption Up, Respect for Property Rights Down in the US, NSA Used Radio Waves to Plant Spy Software in Computers, LA City Council Considering $15/Hour Minimum Wage for Hotel Workers

  • what, me worry?The U.S. has
    out of the top ten countries for economic freedom in the
    Heritage Foundation’s 20th anniversary edition of the
    Index of Economic Freedom.
  • The NSA has
    planted spy software in more than 100,000 computers,
    often using radio waves. In the meantime, President Obama is
    expected to propose changing the way the NSA collects Americans’
    phone records.
  • A federal district judge
    Oklahoma’s ban on gay marriage unconstitutional.
  • The LA city council is
    raising the minimum wage for workers at large
    hotels to $15 an hour.
  • A state judge
    New Jersey officials to provide a “status report” on
    the opening of medical marijuana dispensaries, half of which remain
  • The retired Florida cop and SWAT chief who allegedly shot and
    killed a man for texting in a movie theater was
  • The White House’s press secretary, Jay Carney, says
    President Obama plans to meet Pope Francis and is looking forward
    to it, but declined to detail when or where that might take

Follow Reason and Reason 24/7 on
Twitter, and like us on Facebook.
can also get the top stories mailed to
up here.

from Hit & Run

Ronald Bailey on the Fable of Hawaiian Frankencorn

Hawaii is the epicenter of a furious campaign to
shut down production farms that yield genetically modified seed. It
was September, and Ronald Bailey was there to see for himself the
“Frankencorn” that haunts activists’ choleric imaginations. Bailey
says the chief goal of the anti-GMO campaigners is to disrupt the
progress of the technology they abhor by spreading disinformation
to frighten the citizens of Hawaii. Sadly, they are succeeding.

View this article.

from Hit & Run

This Trend Is Not Your Friend

As equity markets revert to their new normal BTFATH, Japanese-Yen-pinned reality, we thought a gentle reminder of the longer-term state of the real (not financial) economy would prod more than a few into the realization of just how ‘encouraged’ they should be by the nominal high after nominal high that is gloated over day after day…



(h/t @Not_Jim_Cramer)


via Zero Hedge Tyler Durden

Bank Of America Beats On Lower Tax Rate, Higher Loss Reserve Release As Mortgage Originations Plunge 50%

If yesterday it was JPM’s turn to shock and awe everyone with its adoption of FVA and impress with its non-GAAP revenues, today it is the turn of Bank of America to confuse everyone with its traditionally indecipherable earnings release. So here is the punchline. BAC reported revenues of $21.7 billion which beat expectations of $21.14 billion, although more importantly EPS of $0.29 vs expectations of $0.27. So how did BAC generate the better than expected top and bottom line? Simple – the top line beat was driven by the bank’s return to an aggressive extraction of non-income income from loan-loss reserve releases, which in the current quarter rose to $1.246 billion, up from $900 million a year ago. Considering the Bank had non-GAAP pretax income of $3.8 billion, this amount to just about a third of its earnings.


This was driven by the bank charging offsome $1.6 billion offset by just $0.3 billion in provisions.

This is what the bank had to say about its loan loss releases:

The provision for credit losses declined $1.9 billion from the fourth quarter of 2012 to $336 million, driven by improved credit quality. Net charge-offs declined significantly to $1.6 billion in the fourth quarter of 2013 from $3.1 billion in the fourth quarter of 2012, with the net charge-off ratio falling to 0.68 percent in the fourth quarter of 2013 from 1.40 percent in the year-ago quarter. The provision for credit losses in the fourth quarter of 2013 included a $1.2 billion reduction in the allowance for credit losses, compared to a $900 million reduction in the allowance in the fourth quarter of 2012.

Additionally, the company paid only $406 million in reported taxes on pretax income of $3.845 billion, or a 10.6% effective tax rate. How does this compare to the historic average of 25%? Obviously, it’s much lower. But all is fair in sellside analyst love and making up non-GAAP numbers.

And finally, let’s not forget the elephant in the room: litigation reserves: at $2.3 billion this was the biggest one-time item in recent years.

Ok, so BAC would have missed wildly if it hadn’t dug into its bag of usual accounting tricks. But what about the organic business? Well, since banks traditionally make money not as hedge funds but as lenders, here is the bottom line: in Q4, just like with Wells, mortgage origination crumbled by a whopping 49%! This led to a $1.1 billion loss in the CRES group, a drop of $2.6 billion compared to a year ago.

As for how the bank’s trading operation fare this quarter, the answer : flat to down.

Here is what BAC had to say:

Net income of $0.2B

  • Excluding DVA and U.K. tax charge, net income of $0.3B declined from both comparative periods as revenue improvement was offset by litigation expense

Excluding DVA, sales and trading revenue of $3.0B increased $483MM, or 19%, from 4Q12 and was consistent with 3Q13

  • FICC revenue increased $292MM, or 16%, from 4Q12 and $47MM, or 2%, from 3Q13 as stronger results in credit and mortgage products offset weakness in rates and commodities
  • Equities revenue increased $191MM, or 27%, from 4Q12 due to market share gains, higher market volumes and increased client financing balances, but declined 7% from strong 3Q13 results

Bottom line: virtually no change from a year ago.

Also of note. VaR declined from 100 a year ago to just 74.

Finally, as for how the bank sees its future, well: here are the bank’s employees at different points in time. The trend is clear.

Full presentation below:


via Zero Hedge Tyler Durden

Baltic Dry Index Collapses 39% In 9 Trading Days

Today’s AM fix was USD 1,238.00, EUR 908.56 and GBP 753.91 per ounce.
Yesterday’s AM fix was USD 1,248.75, EUR 913.10 and GBP 760.97 per ounce.

Gold fell $11.40 or 0.91% yesterday, closing at $1,243.20/oz. Silver slipped $0.26 or 1.27% closing at $20.19/oz. Platinum rose to a two-month high of $1,446.75 yesterday on concern that industrial unrest at the world’s three biggest platinum producers will weigh on output in South Africa, the biggest producing country.

Gold retreated for a second session today. A rally in stock markets prompted by stronger than expected U.S. retail sales data may have led to profit taking.


Platinum in U.S. Dollars – (Monthly – 2004 to Today)
China has granted licenses to import gold to two non Chinese banks for the first time, according to Reuters. The move to take advantage of the largest gold consumers is gathering pace. China’s gold imports more than doubled last year to over 1,000 tonnes – ousting India as the biggest buyer – as demand soared to unprecedented levels.


The Baltic Dry Index,  a measure of commodity-shipping rates, has collapsed 39% in just the nine trading days of 2014. It has fallen from 2277 at the end of December 2013 to 1370 today. This key indicator of global economic health is a warning signal for the global economy in 2014.

Marc Faber told Bloomberg TV in an interview that, “I prefer physical gold and silver, platinum to bitcoin. How do you value a bitcoin? I can value gold to some extent and compare say gold to the quantity of money that is floating around the world, to the wealth increase, and to the monetary base increase, to the credit increase, and so forth and so on, and to the production costs. So I have an idea of where gold should be.”

A diversified precious metals portfolio with allocations to gold, silver, platinum and palladium remains prudent.

Click Gold News For This Week’s Breaking Gold And Silver News
Click Gold and Silver Commentary For This Week’s Leading Gold And Silver Comment And Opinion
Like Our Facebook Page For Breaking News, Interesting Insights, Blogs, Prizes and Special Offers


via Zero Hedge GoldCore