tisdag 11 oktober 2011

Goldman Sachs Earnings Collapse, Wells Fargo Thrives

Goldman Sachs Group Inc. (GS), whose shares have fallen 43 percent this year, may report its lowest quarterly profit since the 2008 financial crisis. Far from Wall Street, Wells Fargo & Co. (WFC) is headed for record earnings.

Third-quarter U.S. bank earnings, which kick off with JPMorgan Chase & Co. (JPM) on Oct. 13, will show that investment- banking businesses such as bond trading and merger advice declined, while retail operations like mortgage lending prospered, according to analysts including Richard Staite at Atlantic Equities LLP in London.

It’s a reversal from 2009 and early 2010, when rising markets and a perfect trading record propelled New York-based Goldman Sachs to its highest profits ever, as commercial lenders including SunTrust Banks Inc. (STI) in Atlanta charged off billions of dollars of delinquent mortgages.

“You’re going to see a big divergence between very poor earnings from pure capital-markets businesses and quite solid performance from the pure retail banks, particularly those that have a mortgage-origination business,” said Staite.


Everywhere everybody in the financial sector wants to tap in to the taxpayers money, either via outright bailouts or by the removal of the Glass-Stegall act, alloving financial institutions to take as security for their higly leveraged derivates nonsens peoples bank savings.

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