Goldman Loss Offers a Bad Omen for Wall Street

By SUSANNE CRAIG
NYT

Goldman Sachs, once Wall Street’s highest flier, has been grounded, and it does not bode well for the rest of the financial industry or the New York City economy that depends on it.

The bank, both envied and loathed for its ability to churn out huge profits year after year, reported a quarterly loss on Tuesday — its first since the financial crisis and only its second since going public in 1999.

The misstep by the financial leader speaks to what could be a more lasting shift on Wall Street, which has been steadily retrenching over the last 12 months. While protesters a few blocks away were denouncing greed and “too big to fail” banks, the institutions themselves were coming to grips with the current diminished reality.

Banks, required by regulators to discontinue high-profit businesses like proprietary trading, reduce borrowings and hold more capital, may no longer be able to produce the supercharged earnings that were common before the financial crisis.

(More here.)