Live by the trade, die by the trade. So it goes for Goldman Sachs (NYSE: GS). The controversial Wall Street bank posted earnings of $2.39 billion, or $3.79 a share last quarter, down from $4.95 billion, or $8.20 a share, a year ago.

The 52 percent decline was a bit more than analysts expected, and the stock really sold off. It didn't help that quarterly revenue sank 10 percent to $8.64 billion.

The big driver, as usual, was fixed-income, currencies and commodities trading (FICC), which dropped nearly 50 percent to $1.64 billion, year-over-year.

An indication of the reduced trading activity: Goldman Sachs' value-at-risk (VaR) for commodities fell to $23 million, down 40 percent from a year ago. Equity trading was also weak. FICC has powered earnings for years now, but the issue going forward is where the bank will find offsetting revenue. The best bet in the eyes of many is investment banking. For the fourth quarter, investment banking dropped about 10 percent to $1.5 billion.

The deal environment, however, remains strong, and the bank could see more closed deals early this year.

As for pay--always a big question--the compensation pool fell 5 percent in 2010 to $15.4 billion. Per employee, compensation fell 6 percent to $430,812 per employee--which is still a lot. Goldman actually boosted its pay to revenues ratio to 39 percent from 36 percent in 2009.

For more:
- here's some perspective from Reuters
- here's a look from TheAtlantic

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