Goldman Sachs (NYSE:GS) made an obscene amount of money last quarter, which surprised precisely no one.

Net income came in at $3.19 billion, or $5.25 per share. That was up from $845 million, or $1.81 per share in the same period last year.

In a conference call you'd think was scripted word-for-word by a PR firm, Goldman spent most of the morning playing down the results, reminding investors that record territory wasn't breached, and that paying its employees kingly sums was obligatory.

"Our competitors are very good, they are paying people quite well," said CFO David Viniar. In other words, "Don't hate the player, hate the game!"  

But no one's fooled here: This environment is about as good as it gets for Goldman. One year post-meltdown, Goldman's trading units are pulling money out of thin air at a rate the Bureau of Engraving and Printing would envy.

Here's how banking and trading revenue broke down in the quarter, compared to last year:


Net Revenue, Q3 2009

Net Revenue, Q3 2008

Investment Banking Advisory (mergers and acquisitions)

$325 million

$619 million

Equity Underwriting

$363 million

$292 million

Debt Underwriting

$211 million

$383 million

Fixed Income, Currency, and Commodities

$6 billion

$1.6 billion

Total Trading and Principal Investments*

$10 billion

$2.7 billion

*Houses fixed income, currency, and commodities division.

Notice the huge net revenue gains from trading, particularly the arm that houses fixed income trading. JPMorgan Chase (NYSE:JPM) had a similar setup when it reported earnings yesterday. Banks with big exposure to fixed income are just getting cash thrown at them, thanks to a favorable yield curve and minimal competition.

The big question is how long that can last. Short of new stringent regulations on risk-taking (which shouldn't be counted out), fixed income gains are probably safe until there's either a dramatic increase in interest rates, or competition revives when banks like Bank of America (NYSE:BAC) and Citigroup (NYSE:C) manage to pull themselves out damage-control mode.

And that will inevitably happen sooner or later. But there's no sign of it happening any time soon. For Goldman investors, it's kind of win-win. (Relax, conspiracy theorists.) When the economy flatlines, interest rates and low competition keep trading profits humming. But the only real threat to those trading profits is an economic recovery, in which case areas like underwriting and advisory would rebound sharply.

As Charlie Munger put it earlier this year, "[Berkshire Hathaway (NYSE:BRK-A) (NYSE:BKR-B)] invested in Goldman Sachs because we felt their merits outweighed their defects." Yeah, I'd say so.