The reason that Goldman Sachs and Morgan Stanley went against the herd yesterday and closed in the green, is the perception that they are still predominantly investment banks and make less business loans than the big commercial banks like Citigroup, Bank of America, JPMorgan Chase and Wells Fargo. As the economy has dramatically weakened this year and corporate credit downgrades and bankruptcies increased, those commercial banks have been forced to set aside ever larger amounts for loan loss reserves, which eats into their profit picture.
Banks adapting to a long term slog.
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