The Goldman Sachs Tower. New Jersey (Photo credit: luismontanez) |
Financials The hot performance of financial stocks (XLF -News) belies their real life lackluster Q2 earnings results and deeper problems within the sector. Goldman Sachs (GS - News) reported an 11% fall in second quarter profit and its $16.6 billion of revenue during the first six months are 14% lower from last year. Goldman's corporate earnings declined to their lowest level since 2005. Their return on shareholder equity also declined. More worrisome, is the lingering habit of financial/banking stocks to blindside shareholders with nasty and unwelcome surprises. JPMorgan Chase (JPM - News) is dealing with a massive trading loss that could top $6 billion and possibly be as high as $9 billion. JPM posted a 7% decline in profits compared to a year earlier. Question: If a bank posts a one-time loss next quarter in addition to the latest quarter's losses, does that make it a two time loss or a one-time quarterly loss twice? ... Continue to read.
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