High-octane Wall Street investment banking is in deep trouble.
That's the message from JPMorgan Chase's earnings report Thursday. While JPMorgan did better than expected overall, it's performance was boosted by a write-down in the value of its own bonds. So the investment banking division officially earned $1.6 billion, but that includes a $1.9 billion gain from writing down the value of their own bonds to market value.
Take away those write-downs, and the investment banking division actually lost money.
Some of the ugly details (all numbers net of the bond write-down gains):
This very likely means that the more pure play investment banking companies, including Morgan Stanley and Goldman Sachs , are in deep, deep trouble. What's more, with their prop trading operations badly damaged, it's unlikely that either company has managed to pull off the kind of Big Short call that helped Goldman weather the financial crisis better than its peers.
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