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July 25, 2008 10:49:45 PM CDT

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Goldman Up Whopping 76% in 3rd Quarter

Posted Sep 20, 07 10:20 AM CDT in Business 

(Newser) – Two financial giants posted dramatic earnings this morning: Goldman Sachs wowed investors with a 79% surge in third quarter net income, while Bear Stearns’ dropped 61% thanks to massive hedge-fund losses. The two were on opposite sides of the subprime collapse. Bear Stearns is among the top packagers of mortgage-based securities, which Goldman short-sold for huge gains.

Goldman’s return on equity, which measures how efficiently funds reinvest earnings, rose to 36.6% from 31.6%, while Stearns’ plummeted to 5.3% from 13.7%, reports the Wall Street Journal. Stearns lost almost $200 million this summer when two of its hedge funds imploded. Goldman, meanwhile, lost $1.48 billion on junk-bonds, but offset that with the $2.15 billion sale of Horizon Wind Energy.

Source Wall Street Journal

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The headquarters of investment firm Goldman Sachs towers over smaller buildings in New York in this Dec. 11, 2006 file photo. The FBI is investigating anonymous threats against the firm contained in handwritten...   (Associated Press)
The building on Broad Street in New York's Financial District that houses brokerage firm Goldman Sachs is seen in this June 12, 2007 file photo. The financial world is anxiously waiting as four of the...   (Associated Press)
The logo for Bear Stearns is shown at its corporate headquarters in New York, in this July 18, 2007 file photo. The financial world is anxiously waiting as four of the biggest U.S. investment banks prepare...   (Associated Press)
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