Goldman Sachs and Morgan Stanley Have Deja Vu
The two big banks were going to remake their businesses in the wake of the financial crisis, but they’re sticking with their boom-and-bust ways.
Meet Wall Street, same as the old Wall Street.
Photographer: Bloomberg
Investors cheering Goldman Sachs Group Inc. and Morgan Stanley’s knockout third-quarter results may just be setting themselves up for a sucker punch.
On Tuesday morning, both banks reported better-than-expected earnings. Goldman’s bottom line was up 19 percent, and Morgan Stanley’s profit was up 17 percent. The robust results from the two Wall Street powerhouses, in a quarter when other rivals stumbled, could be seen as a sign that the two banks are back from the financial crisis with more diversified and solid foundations. In truth, it’s a sign that they never truly left the businesses that have led them both to booms and busts in the past.