Three banks, three profitable quarters. But hold the champagne. Strong trading results were behind the red ink at Citibank, Goldman Sachs, and JPMorgan. Core businesses remain weak; accounting quirks contributed to the bottomline. But the Great Recession is far from over.
The question I have: How have their risk profiles changed? Each has taken hefty sums of money from Uncle Sam via TARP but none has seen fundamental improvement to the business model. Trading gains don’t come without increased risk. A Citi spokesman told me that the bank has not taken undue risks (can you imagine him saying otherwise?). But something has to be up.Even with interest rates low, trading is by definition risky.