Goldman Sachs - all that glitters Bankers get paid a lot, so an easy way for a bank to boost profits is to pay them less. Bond trading was ugly across Wall Street in the third quarter, and especially so at Goldman Sachs. Its revenue from fixed income, currency and commodities trading fell 47 per cent (excluding accounting quirks related to the price of its own debt.) That compares with declines of 26 per cent at Citigroup, 20 per cent for Bank of America and 8 per cent at JPMorgan (it is unclear how much the year ago quarter at JPMorgan was hurt by the London Whale losses). Goldman shielded its bottom line by slashing compensation. Total revenues fell by 20 per cent in the quarter, but the amount that Goldman set aside for compensation dropped by over a third, taking the ratio of compensation to revenue to 35 per cent. Had Goldman instead kept this measure at the 43 per cent level of the first half, its net profit would have been $356m lower. The bank would have missed earnings expectations instead of beating them. The outlook for the fourth quarter is unclear. The debt ceiling drama in Washington has dominated the first few weeks, while Goldman noted that its investment banking backlog increased significantly from the end of the second quarter.Goldman shares fell 3 per cent on Thursday - a reasonable response to laggard results. Still, the willingness to be aggressive on costs in the face of a poor quarter is exactly what investors deserve. Whether this augurs a realignment towards the interests of shareholders remains to be seen. Goldman typically keeps its compensation ratio steady until the fourth quarter, when the full-year revenue picture becomes clear. The question is whether Goldman is just managing around a weak quarter, or if bankers are really willing to take some losses so that investors - also known as the bank's owners - can avoid them.