Wall Street Just Died A Little Inside of JP Morgan Chase

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There's a specter haunting JP Morgan Chase. It is the ghost of investment banking.

Before the financial crisis, investment banking was the huge driver of growth at the company. In the fourth quarter of 2006, profits were up 51 percent in the investment bank, while profits for retail banking slid 11percent.

The earnings released Friday morning painted a very different picture.

Profits at the investment bank were down 52 percent. Profits from retail banking and consumer lending were down 12 percent from the previous year.

If you dig a little deeper, you can really see just how bad the traditional Wall Street business is doing at JPMorgan .

Underwriting of stocks and bonds produced just a combined $722 million in revenue. Stock underwriting fees slipped 65 percent. Bond underwriting fell 40 percent. Advisory fees, for things like M&A deals, fell 6 percent.

Trading was down as well. Fixed income revenue was down 13 percent, to just $2.5 billion. Equity trading revenue was down 31%, to just $779 million. Much of this was likely due to a decline in customer trading orders and the lingering effect of the Volcker Rule ban on proprietary trading.

In short, it looks increasingly like the JPMorgan side of the company is shrinking at an extraordinary rapid clip. Investment banking survived the financial crisis. But it's struggling in the post-crisis era.

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