Goldman Sachs' trading problem is even worse than what has befallen the rest of Wall Street — so bad that the company recorded its worst commodities quarter on record.
The trading issue has gotten so pronounced that even a quarter when the investment banking behemoth surprised analysts with a stronger profit than the year-ago period, it wasn't enough to keep the stock from falling.
That's primarily because a core of Goldman's existence — trading, particularly in the fixed income, currencies and commodities area — is falling at a rate greater than any of its peers. Trading revenue in general declined 18 percent in the second quarter, and FICC specifically fell a jaw-dropping 40 percent.
Commodity weakness helped drive the decline, registering an unprecedentedly poor performance.
"We are a market leader in commodities, but it was a challenging environment on multiple fronts," Martin Chavez, Goldman's chief financial officer, said on a conference call with analysts.
"We can have a great asset manager franchise and a great corporate franchise and [we're] working on both," he added later. "This is something that all of us are evaluating and making changes and working on, and we're committed to it. We know we need to do better."