Goldman Sachs yesterday demonstrated its skill at navigating turbulent capital markets, reporting a 79 per cent surge in third-quarter net income even as rival Bear Stearns recorded a 61 per cent profit plunge in the wake of the summer's credit squeeze.

Goldman's performance was driven in part by an early bet against US mortgages, which more than offset losses on the value of existing leveraged loan commitments and mortgage-related positions. The bet helped Goldman generate record net revenue of $4.89bn (£2.4bn) in its fixed-income, currency and commodities businesses.