But which is which?
Goldman Sachs is taken aback by the loathing it has stoked up by so quickly running up bumper profits raising equity for companies and banks to de-lever. Goldman is the best-managed firm on the Street. But its returns might never regain their former peaks, while its fiercest rival, JPMorgan, pushes its own higher than they were before the crisis. It will be interesting to see how Goldman’s fabled risk management copes when interest rates inevitably rise. There are not so many partners still there who can recall how rising rates nearly bankrupted the firm in 1994.
Back then, Citicorp had not long emerged from the shadow of loan losses that led lawyers for the Federal Reserve to draft up the documents for its own bankruptcy at the start of the decade. What a recovery it then embarked on....
