First Goldman Sachs reports earnings of $3.2 billion for the quarter. But then, a few minutes later, Citigroup tells the world that it sort of made a little money but also sort of lost a lot of money (that is, it reported net income of $101 million, but said that, after dividends to preferred shareholders and its exchange of the government’s preferred shares for common shares, the income available to common shareholders was, ahem, -3.2 billion).
All this is a timely reminder that the story line I offered up yesterday after JPMorgan reported big earnings—that of Wall Street vs. the rest of us—isn’t the only possible narrative for our financial times. What’s also happening is that a few of the healthiest Wall Street firms—Goldman and JPMorgan in particular—are eating the lunches of their competitors.
This second phenomenon won’t continue forever. At some point the competitive landscape will tilt in new directions, and profits probably will be divvied up in somewhat more even fashion. The question is how big those profits will to be—and how big they ought to be.