Morning Mumble: Sofas (economically based 'onest guv), This time next year Rodders & Marketing by PLUS500...

Good Morning, these weekends zip by albeit not in the dinosaur years when working for an employer its easy to see why people hate the realities of work on a Sunday (Sunday Night Dread). For myself work is a pleasure, I could bore people with the markets for years without taking a breath or perhaps fainting first! Never-mind everything else I'm involved with, the work life balance is finally there...for me, but no doubt criticism from some!  

What is worth considering is the amount of credit people are taking on again; does no one save up any more? This household debt is staggering, you can if you wish justify the new car finance agreement, as Spac3y was speaking to me about on Friday night whilst in shock and awe about my detox. You cannot buy a car for some of these finance agreements. BUT really do you need finance for a sofa? For a washing machine? 

For one of my slums (they aren't at all but it gives it some interesting connotations/makes it more exciting than stating a rental property) I was shopping for a sofa as there's a tenant that needs a fully-furnished place for 5 years whilst in the UK. So apart from picking something that is decent and comfy (he was choosing) it came to payment...the price for the suite was £1800 (a 2 seater, 3 seater and an armchair), paying was a different matter. 

Cash, that good old method of you spend what you can afford, the price came down to £1510 after a bit of tough love. The point I'm getting at is, the amount of people taking finance was shocking, I'm not suggesting its about "affordability" on the whole either, more so common-sense and learning from the past.

I'll explain quickly, if one can afford £37.50 a month for four years (1800) when walking into a sofa shop, then surely one can afford that when sat on on it. So put it away before? In essence a decent savings a/c won't pay you what you'll save off the price. We'll ignore the fact that people have a perception that sofa's aren't negotiable. The salesman was certainly better than the terminal/ trading software man you meet whom is like a wet lettuce (lets hope he doesn't read). In explaining the price the sofa chap kept saying they don't do any discounts, but when I explained I was a cash customer only he wasn't budging either...he said "why don't you put that money away in a saving's account and earn the interest whilst reducing the monthly payment? 

Strangely that would work if I didn't have a brain, so after my tenant left (he's signed) with me assuring him I'd get the sofa, I merely stated to the chap, why doesn't the company put away the 1510 and distribute the monies monthly? Despite him not grasping it or realising I'd reduced the price by more than what I could earn in interest, he had to get a manager. Anyway, after the manager said we don't do cash discounts because of the law on offering interest free. Never-mind the fact there's no law that states a retailer or merchant of goods cannot give a discount when offering interest free, the manager was vehement his company policy was the same for all methods of payment. Finally, I reiterated I was prepared to offer £1510 (it's more than 1500 was my theory) and mentioned its the last time I was offering it. So after one phone call by the manager I walked away with the paperwork for the suite to be collecting in 7 weeks (I don't need it for 11 so there's a safety net). 

Anyway, what I'm getting at is, the retailer/borrower caused the crash of 2008/9 for obvious reasons. Its without a doubt, (guaranteed in fact) that readers will know someone with a cringe-worthy mortgage, with finance on everything and visa cards with a minimum monthly repayment that makes the Beckham's make-up bill look like the Costa/Starbucks (or Fraser's office) tip. Ironically, if they stopped acting like sheep and started clearing down these grotesque debts they'd feel better, be able to do more and get a better price. Oh well, anyway my point is Sofa's like so many offerings now and have been in the past are forcing people to be wage slaves. Ironic really...what with household/personal debt on the increase if this country continues at the same pace, we're due another economic contraction around 2016 unless borrowers wise up. I would go as far to state if household debt peeks above the 165% of household earnings (2007) we're in for a shocker...its around 135% currently. So to get you reading the FT Article: Bank of England signals dim view of household debt By Chris Giles, Economics Editor. In addition to,The financial position of British households: evidence from the 2013 NMG Consulting survey from the Bank of England.

Well well (I know) Horse Hill have "oil shows or is it gas shows"...You can read about it via Stellar Resources link or the 234 other RNS's that will no doubt follow from various entities owning 20% in a 65% holding company of the 80% interest in....(I'm exaggerating now but you get the idea: Stellar Resources Drilling Update, Horse Hill-1, Weald Basin UK.

Iofina Plc (IOF) finally have some news that doesn't start with below expectations or infer missed targets. Iofina PLC Production & Water Permit Update. There's further to go on the consultation and for those ignorant of such processes there have been rejections of applications post consultation, so its not crystal clear by a long chore, but its certainly looking more positive! I've deliberately ignored the production figures until there's a better update. There's some significant changes coming in the Iodine industry including consolidation...The positives for the long-term IOF holders, that for reasons beyond comprehension did not sell above £2.

KEFI have come out and updated the Tulu Kapi resources with the cut off near 40% higher than NYO could do, one has to question the previous management and perhaps even the current management for not obtaining a better price. There's fire sales and then there's a Tulu Kapi fire sale...Having the most paltry of holdings in KEFI and Nyota (NYO) its best if I avoid add capital or even bothering with the companies. So save for an interest, I'll avoid covering the companies, both of which have considerable risks of dilution due to their cash positions. If anyone has a suggestion where I can put these NYO and KEFI shares that would benefit someone, let me know.

BG Group finally receive $350M but are still owed $1.2B (BG.) is a positive at least, also for other interested parties COP (Circle Oil) and Centamin Egypt (CEY) it should bode well for an improving political situation (read as risks reducing). 

Petroceltic (PCI), have announced a possible offer at 230 pence, I think the term possible offer clarifies the situation. It's a shame for us longer term holders, a premium all the same, but nowhere near the value on could have obtained. In fairness PCI hasn't traded about 181 pence for near 10 months so all parties will no doubt be excited. Perhaps a savvy oil company may come out and up the ante. For once I'm not immediately selling, Dragon Oil are well financed for such an acquisition and there's been rumours for some time...over to Sonatrach!

You will note over in Asia gold and other precious metals (i.e. Platinum + Palladium (Platinum Group Metals) and Silver) all followed iron ore; gold was semi-protected with increased investment risks and trading. You'll note my commentary from reading the platinum market market as "iron ore." Sadly with 12 trades (short) open on Platinum to the level I had hoped. The reasoning being I like to acquire positions over time, not the "all-in approach". Like with platinum I missed significant upside (read as short profit) but at the same time protected significantly against losses. So over to the PGM producers to be hammered further; it does question why LMI (Lonmin) bothered reopening those mines...Some very obvious trades today!

So as the fight really starts, BLT (BHP Billiton) announce they are to cut unit costs at Western Australia Iron Ore (WAIO) by at least 25 per cent and the potential to increase capacity there by 65 million tonnes per year at a very low capital cost. If someone can shake me as I am missing something! The steel production figure expectations are clearly bullish. There may be a few letters missing of the last word as supply is outstripping demand currently and likely to for the foreseeable future in the absence of stimuli from the Chinese Government. 

For those following certain Zimbabwean Gold producers one would be wise to monitor the situation as America consider sanctions; watch out Mwana Africa. Quite why the Russian want to build a $3B platinum mine there is beyond me...in fact anywhere for the next 5-10 years.

My final thought goes to Tesco (TSCO) which is clearly throwing itself off the bank not the water: with directorate changes which have some significant but I do not have the time. I did intend to cover PLUS500 as their adverts must be costing a fortune and results due soon...but no time sorry! 

Atb Fraser