One-time cash cows aren’t making hay

IS THE party over? That is the question that shareholders of Goldman Sachs will be asking after yesterday’s lacklustre results. People might still be on the dancefloor, but the bank has certainly lost its groove.

Fixed income, commodities and currencies (FICC) trading was the biggest casualty, falling 39 per cent compared to the fourth quarter of 2009.

That reflects a tough environment for everyone, but Goldman seems to be faring particularly badly: Deutsche Bank says FICC at its peers was down by a less severe 22 per cent.

Goldman cited subdued client activity in the face of a choppy recovery and a quieter M&A outlook.

But it is unclear whether this is a blip, or a permanent scar caused by the financial crisis.

The fact that Lloyd Blankfein is hiring staff in emerging markets as one-time cash cows stop making hay suggests he is hedging his bets. Investors might want to think about doing the same.