Articles in Category: Humor

Pawnbrokers Cash in on Gold Prices

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Humor, Precious Metals

This is an interesting story on two levels.

On the  first level,  it is fascinating to see how niche businesses like pawnbroking have also been affected by the rise in gold prices. H&T, the UK’s largest pawn broker, typically disposes of about a fifth of its stock as scrap but with Gold prices at record levels last year scrap profits jumped from $1.4m to $4.8m on the back of the rise in gold prices alone.  Though it is logical that any holder of gold should have benefited from the strong gold prices, pawn brokers aren’t the first business you think of when metals spike.

On another level it is interesting that a business with a sound sense of market prices has hedged it’s forward gold sales through to 2010. It would seem the word on the street is Gold has peaked ” until 2010 anyway.

–Stuart Burns

Like many others who watched the opening ceremonies of the Olympics, I was glued to the screen as scene-after-artificially-enhanced-scene ” OK, Beijing admits that only the fireworks were digitally modified ” brought amazement to my eyes. Part of what I was admiring, though, was not the digital eye candy or even the beautiful little girl who turned out was lip-synching a song ” the actual singing seven year old was deemed not beautiful enough by the Chinese media politburo to qualify for media prime time ” but rather the exceptional new stadium known as the Bird’s Nest that China built for the opening ceremonies and track events. The awesome structure with exposed steel beams was “built with 36 km (22.4 miles) of unwrapped steel, with a combined weight of 45,000 tonnes (49,600 tons),” according to Wikipedia. If we take today’s price in China of $924 per ton for cold rolled steel (which is still 15% cheaper than in the US at today’s costs) according to MetalMiner IndX, that’s roughly $45 million in total steel costs. Now that’s some serious Yuan. But let’s look on the bright side for the Chinese. If China’s medal goals don’t work out, they can always scrap it ¦

Jason Busch

A Tale of Two Distributors

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Ferrous Metals, Humor

Not long ago in a land actually quite nearby lived two metals distributors. One was called IM Hassle and the other was called Defiance. Defiance, being the bigger distributor with more power told all of his poor subjects (and they were quite poor you see because the price they had to pay for their steel was starting to take a real toll on other expenditures), “We must pass cost increases to our customers!” But what were the subjects to do? They needed the metal for there were oil and gas plants to build, so they paid. And lo and behold Defiance was happy, for they had set record second quarter sales and profits.

But IM Hassle, on the other hand, well, they did not have a record quarter. Oh yes, sales increased, afterall, the subjects needed their metal (and some plastic). Yet IM Hassle’s profits declined from a year ago. And when IM Hassle went to their owners, and the public to explain what had happened they said, “Ye higher operating expenses and costs from carbon products pressured margins and eroded earnings,” according to their henchman.

And so the moral of our story is this: If you don’t do well, blame it on rising costs. If you do well,  blame it  on rising costs.

The End.

–Lisa Reisman

We had a chance to take in a little R&R this weekend at a farm we go to in Wisconsin. Looking at the cows and pigs, I was trying to find a topic that may be fitting for the sights when lo and behold I stumbled upon this story.

The plethora of headlines  highlighting who is doing well in a rising steel market never ceases to amaze me. Check out this article on US metal distributor Reliance Steel & Aluminum’s second quarter   earnings results. According to the article, David H. Hannah, Chairman and Chief Executive Officer of Reliance said, “The 2008 second quarter turned out to be quite a bit better than we had originally anticipated. The main reason for the increased earnings was higher carbon steel prices, which resulted in higher gross profit margins as we quickly passed through the increases to our customers.”

Now if that isn’t a brilliant earnings strategy I don’t know what is. He’s almost gloating about his company’s performance which had nothing to do with any apparent: operational improvements, better customer service, acquisitions of new clients or adding any kind of value. As they say, a pig will eat just about anything put in front of it and will keep eating and eating until it can’t get any bigger. But the good news for metals buyers is we all know who will get slaughtered in the end. I can’t wait to get out my Smokey Joe when the markets turn.

–Lisa Reisman

A toilet seat made out of solid gold may not be in the cards for one Mr. Austin Powers, but Hong Kong entrepreneur Lam Sai-wing is holding tight to his own sparkling commode, a record-breaking, 24-carat, fully-flushable piece of artwork.

In 2001, Mr. Lam began building a palace that rivals the homes of kings and queens  — and yes, those golden sinks, beds, chandeliers and armchairs total six tons of pure precious metal. Talk about a “safe haven.” As gold prices rise through the roof, however, Mr. Lam can’t dismantle his golden home fast enough, recognizing the high profits to be made. Currently set at $965.20 an ounce, gold is heading to another weekly gain as the dollar continues to weaken. Why bother washing with the golden sink when you can sell it for that kind of cash? But no matter how high the price of gold rises, the toilet is staying put. Read more

Deloitte: Putting the Pedal to the Metal!

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Humor

Borrowing a page from my husband’s blog Spend Matters (I swear I do wonder what his key terms are in his Google settings), I love it when people send us links and articles to interesting stories that they feel might be “blog worthy”. I feel it is my special duty in particular to bring your attention to this item that a MetalMiner reader forwarded to us, because this involves my former employer, Deloitte (I worked there after Andersen was shuddered). So it was with great delight that I read about some entertainment troup that was hired by Deloitte as the evening get-up for last week’s Steel Success Strategies conference in The Big Apple.

Now Deloitte is not a firm that I think of when I think about the cutting edge but I suppose the “heat” from the conference called for a new approach. Not to minimize the real fireworks from the conference itself, we have two posts on this subject, one that just appeared and one coming out later this week. And though  we won’t be promoting  metal bustierres and funky welding tanks, we promise a worthwhile read.

–Lisa Reisman

(Hat Tip: DP, thank you!)

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