Well, it had to happen someday. Goldman Sachs (NYSE:GS) posted its first quarterly loss since going public nine years ago. Surprised? Don't be. It'll probably happen a few times next year, too.

Goldman swung to a quarterly loss of $2.1 billion, or $4.97 per share, on net negative revenue $1.58 billion, down from a profit of $7.01 per share in the same quarter last year. Results for the entire year weren't actually all that bad; the investment bank posted a profit of $2.3 billion, or $4.47 per share, on revenue of $22.2 billion. Sure, that was down from an $11.6 billion profit last year, but come on -- half of Goldman's competition is either in the graveyard or on life support. All things considered, an 80% drop in net income is about as good as it gets on Wall Street these days.

Compensation expenses for the year came in at $10.9 billion, which still averages out to $364,000 per employee. Only on Wall Street can employees make more money per year than many make per decade, and still qualify for federal bailouts.

Anyway, I guess it was a respectable result, but I'm still questioning the future of Wall Street banks. The biggest hit to Goldman's bottom line came from a 73% drop in trading and principal investment revenue. Why is that so daunting? In 2007, one-third of total revenue and a staggering 75% of pre-tax earnings came from that category -- the category where investment banks put their own money on the line, typically juiced with a fair amount of leverage.  

Now that Goldman, along with Morgan Stanley (NYSE:MS) and even American Express (NYSE:AXP), has converted to a federally governed bank holding company, you'd better believe that the days of investment banks acting as quasi-hedge funds are over. Goldman is still home to some smart, smart traders, and it doesn't look nearly as vulnerable to the investment declines that brought down Bear Stearns and Lehman Brothers. But with the government now serving as one of the company's largest stakeholders, and nearly every asset class upended in the past year, I can't see Goldman, or any investment bank, taking the kind of risk that provided the bulk of profits in recent years.

It'll be interesting to see how Goldman adjusts over the next year. One of the big things I'd keep an eye out for is how it manages to enter the traditional banking world, where it'll have to compete with the likes of Bank of America (NYSE:BAC) and Wells Fargo (NYSE:WFC) more than ever before.

Don't get me wrong -- Goldman will still be a big, healthy, enviable firm in the future. Still, I have a feeling that its position in the market will more resemble an old-school investment bank, reliant more on its ability to advise clients than its willingness to risk its own capital.

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