3 reasons why Goldman Sachs' profits have tumbled

Profits at the Wall Street giant declined by 52 percent in the fourth quarter of 2010. What's behind this reversal of fortunes?

While more diversified banks such as JP Morgan fared relatively well, fourth-quarter profits at Goldman Sachs plummeted.
(Image credit: Getty)

Goldman Sachs ended 2010 on a "financially humbling note," with its fourth-quarter profits down 52 percent from the same period in 2009. This was the third straight decline in quarterly profits at the Wall Street giant, and investors are worried that what seemed like a passing trend may signal a serious issue. (Watch a New York Times report looking inside Goldman Sachs.) What's behind Goldman Sachs' continuing slide in profits? Here, three factors:

1. Investors got spooked

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