This shouldn’t be surprising given that the credit market is not longer pricing Armageddon. One has to wonder JPM, GS, etc are really being priced for the fall in revenue that is likely to come in 2010.
The CHART shows how the gap between prices at which traders offer to buy and sell credit-default swaps on North American companies has shrunk to 6.1 basis points, from as high as 20.4 in October 2008 and 16.3 in March. Historically wide spreads on everything from derivatives to bonds, representing fees earned per trade, helped fuel the recovery in bank earnings
Goldman Sachs’s revenue from fixed-income, currencies and commodities trading surged to $23.3 billion in 2009, while JPMorgan posted fixed-income markets revenue of $17.6 billion. The return to pre-crisis spreads may reduce the industry’s profitability at the same time regulators are threatening to curb risk taking.
track this over time: http://www.etfdesk.com/headline.aspx?hId=2186