Goldman Sachs on Thursday demonstrated its skill at navigating turbulent capital markets, reporting a 79% surge in Q3 net income even as rival Bear Stearns recorded a 61% profit plunge in the wake of the summer’s credit squeeze. Goldman’s performance was driven in part by an early bet against US mortgages, which more than offset losses on holdings of non-prime loans and mortgage securities. The bet helped Goldman generate record net revenue of $4.89bn in its fixed income, currency and commodities businesses. Bear, by contrast, reported a near 90% drop to $118m in net revenue in its fixed income businesses. Goldman’s results were aided by record quarterly revenues in its investment banking, equities and securities services businesses. Lehman Brothers this week reported a 3% drop in Q3 profits and Morgan Stanley a 7% decline.
