Do rising profits on Wall Street mean that the economy is finally starting to pick up? Not quite. Here's how Goldman Sachs' soaring third-quarter revenue breaks down:
Goldman's business from fixed income, currency and commodities trading again bolstered its bottom line, with revenue more than tripling. Revenue from its principal investments soared 55% from second quarter after losing money a year earlier.
Investment-banking revenue fell 31% and financial advisory revenue dropped 47%.
In other words, even more than usual, Goldman is a hedge fund with a smallish investment bank tacked onto the side. They made better bets than the other guys, but the kind of business that would indicate a recovering economy is still very much in the tank.