Traders Smash Records as Mythos Grabs Spotlight

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This was a curious earnings week, where Wall Street banks like JPMorgan Chase and Goldman Sachs Group could utterly smash their own trading records and still not entirely thrill investors. Wells Fargo gave its shareholders little to be thrilled about, and they reacted accordingly. Let’s skip a line-by-line, bank-by-bank rundown and concentrate on the broad themes that emerged.

Trading overall was strong with new records set amid war and volatility, but you can’t please everyone: some banks fell short on FICC, accounting for part of the investor disappointment. Notably, the Iran war upended the rates trading desk at Goldman Sach Group. Private credit was top of mind, and bankers were optimistic about its prospects, especially in their own portfolios. If there’s a systemic threat, they mostly don’t see it. In spite of the good numbers, headcount fell, due mainly to natural attrition and holding the line on expenses, rather than some kind of AI wipeout of human workers.

Speaking of AI wipeouts, bankers and regulators are sifting through Anthropic’s Mythos to see if its ability to find flaws in security systems could trigger some kind of financial crisis for banks. How real is the danger? Will Mythos render a “fortress balance sheet” into something more like a lightly defended foxhole? Bloomberg is hosting a Live Q&A on Friday, April 17 on the Mythos threat, featuring real humans. Bloomberg’s Edward Ludlow leads a conversation with reporters Shirin Ghaffary, Margi Murphy and Todd Gillespie at 1:30 p.m. New York time. Bloomberg digital subscribers and Terminal clients have the exclusive opportunity to ask our team questions.

In the meantime, who better to ask than The Monitor’s own AI assistants? It turns out they’re skeptical and a tad defensive about the whole Mythos mishegas, suggesting the blame for a bad outcome would belong to flesh-and-blood agents. “Financial crises usually come from leverage, liquidity mismatches, and human incentives — not from a single technology ‘breaking in,’” sniffs my internal bot. “If you want, I can map out a realistic pathway where AI could contribute to a crisis (it’s subtle and mostly about feedback loops, not infiltration.)”

Thus reassured, we present these AI-distilled nuggets of wisdom about the week’s events. —Rick Green