It does seem like we're back to the good old days when it comes to top bank earnings. They have always been a bit hard to predict, and the most active traders, whether proprietary or agency, were always the most difficult for analysts to call. That's precisely why even Goldman Sachs (GS) was often stuck with a low PE.

Not so long ago, it seemed like bank earnings would become a bit more stable, given that the top players turned themselves into commercial banks and trading seemed to be less of an earnings driver. But that has changed markedly over the past year. Trading is again driving earnings, and the earnings from this activity is as hard to estimate as ever.

The fixed income trading arena especially is back to being a free-for-all. TheStreet.com notes that a flood of smaller dealers have re-entered the market, drawn by huge spreads and fat commissions. Which have to be moderated, right? Stay tuned. 

For more:
- here's the article

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