The banks are feeding on the fire they didn't start

Opinion — Markets & Macro | Tuesday, April 14, 2026

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Goldman Sachs just had its second-best quarter in history. The Strait of Hormuz is still functionally closed. And the S&P 500 is down roughly 3% for the year while GS's equities desk is printing $5.33 billion in a single quarter, up 27%, a record. Hold both of those thoughts at the same time. Really hold them.

This is the central absurdity of the current moment, and no earnings season has illustrated it more brutally. The world has a genuine supply shock — Brent at $103 after Trump announced a naval blockade of Iran on Sunday, having already spiked to $119 in March before a shaky ceasefire dragged it back toward $92, only to rip higher again when those ceasefire talks collapsed in Islamabad over the weekend. The Hormuz corridor, through which about one-fifth of global oil and gas moves, has been a trickle since early March. QatarEnergy declared force majeure. Kuwait and Iraq are reportedly at storage capacity. This is not noise. This is the physical world refusing to cooperate.

And yet Goldman's traders looked at that chaos and saw a revenue opportunity. Prime brokerage lending to hedge funds surged. Cash equities volumes exploded. The volatility wasn't a problem to solve — it was the product. EPS came in at $17.55, beating consensus by more than $1. Dealmaking fees jumped 48% to $2.84 billion. Advisory fees specifically were up 89%. The M&A market, largely frozen through late 2025, apparently thawed fast enough for Goldman's bankers to harvest $1.5 billion in fees in one quarter. Wall Street did not pause to reflect on what it means to post record equities revenue during a war that has disrupted one-fifth of global energy supply.

Volatility isn't a problem to solve. For these institutions, it's the product.

Today JPMorgan reports. The street is looking for $5.45 in EPS — a 7% jump year-over-year — on revenue of around $48.7 billion. Trading desks, per multiple previews, are expected to have feasted similarly on wild fixed-income swings. The real theater is whatever Jamie Dimon says about the outlook. He has used weather analogies before to signal macro distress. The current weather is approximately a Category 4 hurricane parked over the Strait of Hormuz, and everyone is watching to see if he points at the sky or talks about foundations.

What makes this earnings season genuinely strange is the bifurcation it reveals. Software stocks — the IGV ETF — are down over 27% year-to-date as AI upends the SaaS model. ServiceNow fell more than 8% in a single session last Friday. Salesforce dragged the Dow. Datadog off 5%. The market is repricing the entire enterprise software stack in real time because the cost of intelligence has collapsed and nobody knows which products survive. Meanwhile Goldman posts $17.23 billion in quarterly revenue and an ROE of 19.8%. The banks are not in the same market as software. They exist in a parallel universe where geopolitical crisis generates fees and volatility generates spreads.

The inflation problem has not gone away; it has just changed shape. Friday's CPI showed energy leading the charge — Brent at $103 will do that — but the University of Michigan sentiment survey hinted at the thing everyone dreads: expectations becoming unanchored. The Fed can't cut. Loomis Sayles pushed their expected Fed cuts to late 2026, pending Senate confirmation of Kevin Warsh as the new FOMC chair, which itself adds a layer of institutional uncertainty. The ECB and Bank of England are pricing in hikes, not cuts. Rate relief isn't coming from anywhere. Q4 GDP came in at 0.7% annualized. The economy grew 2.1% for all of 2025. February showed a decline of 92,000 jobs. These are not boom conditions.

And still the banks beat. Because the banks are not a bet on the economy. They are a bet on the velocity of money, the churn of risk, the number of times a dollar changes hands under uncertain conditions. War does not slow that down. It accelerates it.

The IMF's Global Financial Stability Report drops today, and their pre-release note flagged — with the kind of diplomatic understatement that makes central bank communications almost satirical — that the "rapid expansion of private credit markets and stablecoins in emerging markets warrants continued, proportionate monitoring." Private credit. Stablecoins. Emerging markets. A Hormuz blockade. These are not four sentences from the same paragraph in a healthy global financial system. They are symptoms of capital searching desperately for yield and safety simultaneously, finding neither, and piling into whatever structure promises both.

The banks are not a bet on the economy. They're a bet on the velocity of money under uncertain conditions.

Delta's CEO told investors the carrier will meaningfully cut near-term capacity growth because jet fuel — priced off crude — has become genuinely unpredictable. That's the real economy. Delta is guessing at its own costs. Goldman is not guessing. Goldman is harvesting the premium that uncertainty commands.

None of this is Goldman's fault. Or JPMorgan's. They are institutions built to thrive in exactly this environment. David Solomon didn't start the Iran war. But the symmetry is worth sitting with: the same event that is crushing airline planning, destabilizing Gulf food supply chains, pushing the IEA to call this the greatest energy security challenge in history, and putting a fragile ceasefire back on life support — that same event delivered Goldman its best equities quarter on record.

If Dimon's letter today gives us the weather analogies, watch for what he says about private credit. That's the next seam in this thing. The banks have lent into the AI infrastructure boom and the leveraged buyout revival through structures that don't mark to market the way public bonds do. When the cycle turns — and $103 oil grinding against a near-stagnant economy is exactly the kind of pressure that turns cycles — that credit doesn't reprice on Bloomberg. It reprices in the quarterly reports, quietly, months later.

For now, the numbers are extraordinary and the world is on fire. Both things are true. The market is trying to decide which one matters more.

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GS equities revenue Q1	$5.33B — record, +27% YoY
GS advisory fees	+89% YoY
GS total revenue	$17.23B — second-highest in firm history
Brent crude	~$103 after Sunday blockade announcement (+8%)
IGV (software ETF) YTD	−27%
US Q4 GDP (annualised)	0.7%