BofA has missed expectations and its stock is sliding. But were it not for its fixed income trading operations, the situation would be a whole lot worse.

This time last year, fixed income traders at Merrill Lynch were the villains of the piece. John Thain had just arrived, and was looking at cutting thousands of jobs. Fixed income traders were initially spared while they sorted out the mess they’d caused, but they faced the hatchet earlier this year.

12 months on, and Merrill’s traders are making amends. A $2.2bn profit in global banking and markets was all that kept BofA’s results respectable in the past quarter. And over the past nine months as whole, global banking and markets have generated 60% of profits across the bank.

Much of this is down to fixed income, which accounted for 76% of revenues in the banking and markets business in Q3. By comparison, Merrill’s investment bankers appear to be struggling: advisory revenues fell 57% in the past quarter - significantly more than at Goldman, JP Morgan, or even Citigroup.

Ken Lewis will receive no pay or bonus for 2009. (FT)

"We believe that in this environment of heightened scrutiny 41% comp ratio is adequate." (Alphaville)

“I suspect that much of the trading revenues [at Goldman] are based on mark-to-market gains on these heavy inventories and basis contraction” (Bloomberg)

“In 2010 we’re likely to see the biggest explosion in mergers and acquisitions that we’ve ever seen and Goldman will be a main participant in that.” (CNBC)

“What if the government’s one-third stake in the bank is permanently affecting Citi’s risk appetite, or its reputation in the eyes of institutional clients? Then Goldman wins.” (FT)

You think it's easy for banks to make money these days? Well, look at Citigroup. (Guardian)

Goldman disclosed that the British exchequer could net £2bn of revenues based on a 40% tax rate on its UK comp bill. (Guardian)

There is no exciting hiring news today. (City AM)