And talking of Goldman, I have to admit to being surprised at how mediocre its third-quarter earnings were. In mid-October, the firm announced that revenue in fixed income, currency and commodities fell some 45% to $1.25 billion. This was a bigger drop than that experienced by rival flow houses. Goldman’s third-quarter net income was actually flat at $1.4 billion because the firm cut remuneration costs. Revenues fell to $6.7 billion from $8.4 billion a year earlier.
Chief financial officer Harvey Schwartz stated the obvious: "Not a good quarter from us in FICC... it’s just one quarter." More worrying perhaps for market observers is that the bank’s return on equity was a meagre 8.1%, well down from the glorious pre-crash days.
It is counter-intuitive for Goldman to underperform its rivals. And when you add that to the fact that you can’t pick up a newspaper without seeing yet another negative story about JPMorgan – the former acceptable face of finance – it does seem as if the financial landscape might be changing.
Did you see that Michael Evans, global head of growth markets at Goldman, is retiring after 20 years at the firm? Evans has often been talked about as a possible successor to Goldman’s chief, Lloyd Blankfein – particularly during the ‘vampire squid’ era when Lloyd was considered damaged goods.