The End of Trading at Goldman Sachs?

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A little over a year ago, Goldman Sachs purged the word "trading" from its quarterly reports.

Looking at the numbers released today, that linguistic purge became a reality in the second quarter of 2011.

Before the financial crisis struck, Goldman was considered--and considered itself--a trading powerhouse, especially when it came to trading in bonds, currencies and commodities. Lloyd Blankfein, who came up through the ranks as an FICC (Fixed Income Clearing Corporation) trader, once joked that his guys didn't use the words "client" or "customer." They called the people on the other side of their trades "counterparties--and that's just because we didn't know how to spell the word 'adversary.'"

Even after Goldman purged the word "trading" following a firm-wide reorganization intended to emphasize the firm's dedication to those once-unspeakable clients, Goldman still depended on trading to generate profits. In the first three months of 2010, the FICC traders made $6 billion.

But then the brakes started to come on. In the second and third quarters of 2010, FICC took in $3.3 billion and $2.6 billion. The fourth quarter saw a 39 percent decline to just $1.6 billion. It saw a huge bump in the first quarter of 2011, up to $4.3 billion.

This last quarter, the FICC results are all the way back down to $1.6 billion.

Goldman says it made a big macro call on the markets, pulling back on risk taking. It also lost a few of its top bond traders, including its head of government bond trading. What seems to have happened is that Goldman just stopped aggressively trading in markets in which it once dominated.

The question for investors is whether this is the new normal for Goldman or whether the traders--or whatever they're called these days--will be unleashed once again.

Is this the end of trading at Goldman?

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John Carney is a senior editor at CNBC.com and the host of the blog NetNet.

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