Goldman Sachs Group Inc. is trying to avoid congressional scrutiny by detaching two commodities units

Goldman Sachs Group Inc. is avoiding congressional scrutiny by detaching two commodities units. One among two paid back it's investment in less than four years and remaining other is still on coa in Colombia


According to documents released by the U.S. Senate Permanent Subcommittee on Investigations, Goldman Sachs bought Metro International Trade Services LLC for $451 million in 2010. It's a  metals warehouse operator. In September 2013, the banks's board viewed a presentation that showed $465 million of gains from the investment. The profit excluded carry charges.

Head of Goldman Sachs’s global commodities principal investments group,Jacques Gabillon, said at a Senate hearing that the firm has received interest from potential buyers in Europe, Russia and China and it is still in the sales process for Metro International Trade Services LLC. The subcommittee chairman, Michigan Democrat Carl Levin, accused the bank of using Metro to improperly influence aluminum prices. Gabillon denied that the bank is involved in influencing aluminum prices.

As aluminum investor rose, Metro International Trade Services LLC increased its warehouses and  a plunge in demand for the metal after the financial crisis. Upto now the stake had returned $501 million in dividends. It had a carrying value of $396 million with debt.

There's still other profitable investment of Goldman Sachs. In 2003, the company purchased Cogentrix Energy Inc. for $457 million. Over the life of the investment it realized $1.75 billion of gains.


Related:
Goldman Sachs posts earnings, revenue that beat expectation

There was not always profit for the company. As of the September 2013 presentation, Goldman Sachs paid $569 million for Colombian Natural Resources, which had produced total gains of $2 million as of the September 2013 presentation. CNR even estimated last year additional cost upto $220 million for port.

Goldman Sachs bet that the price of coal would fall. It produced $246 million of gains, according to the 2013 presentation. According to the report from senate the firm is considering selling its CNR stake.

Russia's move to prevent itself from high inflation and low investment.

From 7.5% to 8% now. Russian interest rate has increased.

Russia is acting to prevent their economy from the risk of high inflation. The situation in Russia after sanctions from west and recent tension in Ukraine are viewed as the major factors for the probability of increment in inflation.

Since the European economy is in stress and whole Eurozone has low inflation of 0.5%, Russia is also experiencing the stress and other restrictions too. With raising pressure from the west and it's conflict with Ukraine, Russia is anticipating high rate of inflation and in order to check the  risk of high inflation Russian Central bank decided to raise the interest rate by 50 basis points, or half a percent, to 8% per year. In June, core inflation grew to 7.5%, well above the bank's forecast of up to 6.5% for the year.

Analysts were not expecting such changes in the interest rate. They are aware of the vulnerability of the Russia's economy.After sanctions were implemented domestic stocks and the rouble tumbled earlier this year. Analyst are observing the concern of central bank for the potential impact.
The bank is working to reduced the inflation risk  which are caused due to a combination of factors, including, inter alia, the aggravation of geopolitical tension and its potential impact on the rouble exchange rate dynamics, as well as potential changes in tax and tariff policy. The bank point outs the main reason for inflation acceleration is the effect of the observed rouble depreciation on prices of a wide range of goods and services.

While anxious investors are pulling their money out, the exchange rate might still go down.

The consumer price growth rate increased to 7.8% in June and the bank trying to put down the consumer price growth to 4% with increased interest rate.

Russia is concerned about the money leaving from the country. Analysts view this act as  move to prevent large amount of money to leave the country.With such tension in the reason, investors are still searching for the better reason to invest.

World Markets affected by geopolitical unrest.

World markets plunged down on Friday after Malaysian Airlines Plane crash. The tension in Ukraine affected markets world wide. It has been said that the Flight MH17 was brought down by a surface-to-air missile over a region where Ukrainian government forces and  pro-Russian rebels are fighting.

As the news of crash spread, Japan's Nikkei tumbled by 1% and Germany's DAX fell 0.35%.


Russia and Germany has close trading ties, and it's been anticipated that Germany might lose more than most from a deepening crisis. After the crash, Moscow is going to experience pressure from the world to resolve the conflict between Russia and Ukraine. Such political unrest has affected markets around the world.

On the other hand, aviation stocks are falling in Malaysia, it fell by 0.4%. Four months earlier Flight MH370 disappeared, this is the second tragedy to hit the airline business this year.
After the attack, the most actively traded stock in Kuala Lumpur, Malaysia Airline fell by 11% while Malaysia Airport slide down nearly 5%.


While the tension spread and Russian stocks were also on the slide, extending Thursday's losses triggered by the announcement of new U.S. sanctions targeting leading Russian energy companies and banks on the other hand, the West is trying to pressure Moscow into ending its support for the rebels in Ukraine.


Investors were further thrilled when Israel sent ground troops into Gaza.

On Thursday, US stocks were also seen affected : the S&P 500 declined about 1.2%, the Nasdaq slid 1.4% and the Dow closed down almost 1%, the drop for the Dow was the biggest in two months, and the S&P's fall was the steepest in three months.

While stock markets were falling gold price was up 1.5% higher. The VIX index, which measured market volatility rose up by 36%.


While these events affected world market after the news, Wall Street bounced back Friday.

Political Unrest and shares prices in US

A Malaysia Airline Flight 17- a Boeing 777 crashed in Ukraine border near Russia, on Thursday. Israel began a ground invasion into the Gaza strip. This caused  decline in US shares. Investors have lost the confidence after these political unrest.

The S&P 500 plunged 23.45 points or 1.18%, to 1,958.12,
The Nasdaq index dropped 62.52 points or 1.41% to 4,363.45.

Closing back below the symbolic threshold of 17,000, the Dow Jones index fell 161.39 points, or 0.94%, to 6,976.81

Earlier in the day of new US and European Union sanctions on Russia, such new has made impact in US share market.
Such uncertainty and tension, along with the Israel's invasion into Gaza, investors are attracted to invest in assets like gold and US treasury bonds. Gold futures jumped $17.10, or 1.3%, to $1,316.90 an ounce on strong demand.

How to Overcome large trading losses?

Every trader has to face loss at some point in their lives. The only thing that matters is the teachings it leaves when others take your money. It's a teacher for a trader which teaches about how to trade in future. This even causes stress for traders. They should learn to handle stress. Sometimes we feel so bad about the loss and we might decide to give up. Many people are out because they feared that they might again lose. The challenge will always be there, who will win and who will lose depends on who has done better homework about the trade and understood the market better. However, overcoming the losses while trading is always harder to do than to talk about it. It's always complicated when feelings are involved. So, here's few things to consider while overcoming large trading losses:

1.Understand the market: 

Acceptance of what has happened is the first step to overcoming the consequences of any misfortune.

                                                                                           -William James

Understanding what actually happened and caused you loss will provide you the scenario and also points out what you can possibly do to avoid it from happening again in future. After that your knowledge about what's going on broadens. Markets have trends, patterns and sometimes predictable flux. When a trader understand the loss that is made, it acts as a pivotal point. The ability to be a successful trader lies in a trader's reaction to the circumstances from that point.

Grief is itself a medicine.  
                                           ~William Cowper, Charity

Traders should consider all possible factors that might have played role during the trade. It's always important to analyze market  and also to analyze trader's self-condition like: money in the account, money needed for transaction, etc. After analyzing them refocusing to do successful trade is always emphasized. This very act of losing could be the motivation for succeeding.

2. Vivid Goal.

Goals always work as a motivational factor. When a trader is some points down, he or she can always see the goal, what's the current status and make necessary changes. If the goal is to make $1000 a week, $200 loss could still be covered. But clearly remember that greed is good when it's anchored to certain limit. While you are trying to make more from your loss, it's important to use what you have learnt. If similar situation arises while trading in which you had losses previously, then this time, it's an opportunity to meet the goal.

3. Experts and Friends:

Social circles shapes all trader. It's not that you are the only one person in this entire world who did not profit from the trader. There are millions of them. It's not a big deal. Finding a friend and getting emotional help is always beneficial. It helps to find similarities and understand that it's normal to have loss. A loss in a trade won't end up your career.

Experts are there to assist you when you need help. Find them. If  you think that you do not get why you have loss, don't hesitate to ask. They always have information you need. People are always eager to help those people who are willing to learn all by themselves rather than by someone's force.

4.Habits:

Habits defines a person. If you make a habit of learning about the market before you go for trading then it will make you informed. The habit of seeing positive things around you will make you optimistic about the situation. Loss and profits are the part of the business. Accepting anyone of them should be normal.

"Chaos often breeds life, when order breeds habit." 

                                                                                             — Henry Adams

Traders are more likely to succeed when they focus on creating habits that support trading. These habits assist them to act in optimistic way.

5. Results and Consistency:

The only thing that you have at the end of the day is result. If you lose consistently then it might hamper your career. So, do, understand, learn and succeed. Be careful with the result you produce. They somehow show where you are heading. 

“It's not what we do once in a while that shapes our lives. It's what we do consistently.” 

- Anthony Robbins

Feeling stressful is not a compulsion for stock trader, it's a choice.

We all find various things in our life which causes disappointments. There are so many things which go in a way we never anticipate. As things like that happen, we as a normal human being feel sad. When things are beyond our control stress starts to rule our mind. We feel that we are bound to do something that is not in our control. Then the result is a stressful mind. But it's not that stress is completely a bad thing. The main theme is the balance between various aspects of life.

As a stock trader when your money is on the verge of predictable loss, in some situations when the price of stock a trader has invested falls down seriously, the fear of loosing money might even haunt the trader even in sleep. Its emotional part of stock trader.This definitely causes high stress level in traders. That is why so many people are broker now. Rather than investing their own money and multiplying their wealth, they are all taking commissions and investing others money. They feel secure in such type of activity because they are not investing their money. It's the other people's money and they are free from the risk.

The main reason a person feel stress while trading stock is the change that could happen in stock price. There is always risk involved in such investment for any type of people. It's because nobody knows what will happen next in stock market, people starts to feel insecure about there investment and then stress starts to rule. They feel that it's a compulsion for them to be stressful. There's only one solution to it. It is to enjoy each trade you make and make every trade on the basis of all available information. Most of the information about the institution you are focusing is available in openly. Some are provided by people you know who are in higher position. The use of information provides you a base for making decision which is explain on rational grounds. When you have logic about the trade you do then you find that trade as a single activity, it's a one time activity and you don't have to think about it.

Normally we all have depressed as well as excited situations. Most of the successful people in stock market are always excited about the work. They do the job with certainty and forget the outcome. So stress for a stock trader is a choice. Next time when you trade, ask yourself,"if the price goes down should I be sad about it or see something different in the activity of the company?"

Does stress is more intense for stock traders in Nepal?

Well, normally stress is intense for stock traders all over world. This obviously include stocks traders in Nepal. What I wanted to ask is, is it that more pressure is a legacy to stock traders in Nepal?

When the news about NEPSE will be going online came, I was feeling so happy about it. Online trading provides various benefits and most vivid and important of all is that it can reduce stress in a very dramatic way. How? The process is simple. Trade begins and finishes in expected time period and the time between selling and receiving money is minimized. It's decreases account receivable period providing you interest benefits. This step of NEPSE trading online would be the most appreciated action and this does not stop stock traders from worrying about the trades they make.

The formation of new government came with hopes and new enthusiasm for the stock traders.But the NEPSE index is not showing good sign of the stock market right now in Nepal. For initial time frame from the formation of the new government the index was positive and  then after it again started to regress downward showing the decrease in the trading of the stock.

NEPSE Index

Stress level for traders should always be balance. The habit of worrying too much can even lead to depression. In case of Nepal, most of the traders are job holders or independent and self-employed traders. They choose to be stock trader for making money through stocks. And political stability should always provide the stable business environment so that banks, hydro-powers could do better which consequently will induce more positive activities.

In conclusion, we still have more days to come where we hope to see more remarkable changes in the system and the business environment. Stress for a trader could be a friend at the same time, it could be a foe. So, the ultimate decision is our to choose whether to be stress free or take stress because in stock market, no one can decide what comes next, no one knows whether the stock price will go up or down.