Except for Bear Stearns, the earnings of top investment banks were better than expected. In the case of Goldman Sachs, it was much, much better than expected. But what of the top commercially oriented banks? Citigroup struck a dour note today when it said it will take 3Q losses of $1.4 billion for hung loans, $1.3 billion on subprime-related debt and $600 million for credit-trading. It's also boosting loan-loss reserves. The top commercially oriented banks are as well set up to hedge these losses with prop trading--the way Goldman, Lehman and others were. So this likely will be replicated by others. In one sense, it is good news, an opportunity to get all the bad news out.  

For more:
- here's an AP write up