Here's What We Know About The Sad State Of Wall Street Now That Earnings Are All In

In the last week or so every Wall Street bank has reported its earnings, so now it's time for the takeaways.

As usual the headlines of the week didn't tell the whole story.

A quick glance looks like this: JP Morgan beat estimates with a 33% jump in profits, Morgan Stanley's profits dipped but the bank still beat expectations, Goldman Sachs is taking champagne showers, Bank of America is eeking out some kind of improvement, and Citi is finally coming into its own after shedding a load of toxic assets.

Now for the news you can read between the lines.

Sales and trading is on life support, especially if you trade fixed income, currencies or commodities. The traders at Goldman Sachs did better than everyone else, but as CNBC's John Carney pointed out, they were still down 7% for the quarter.

Bank of America's S&T revenue fell 20% (run by Tom Montag, who still gets paid more than BofA CEO Brian Moynihan) and Morgan Stanley got killed, with its revenue falling 42%.

On the other hand, Wealth Management, once one of the most boring sectors on The Street, is carrying banks. This is especially true at Morgan Stanley (where the unit is up 48% from this time last year) and Bank of America, where assets under management grew $67.7 billion year-over-year to $745.3 billion.

Another business where Wall Street is making some cash is in debt underwriting. Thanks to our current low yield environment, companies that were unable to issue bonds before can do so now. The demand to buy these bonds is there from clients searching for yield any way they can get it. Wall Street is here to help.

Goldman has jumped in this role head first, with debt and equity underwriting experiencing a 69% and 53% jump in revenue year over year respectively. Morgan Stanley ranks second in terms of global equity underwriting according to Bloomberg, and Bank of America making headway in this sector as well.

That said: Cost cutting is still in. Think about this way: Despite the fact that Morgan Stanley cut its staff by 7% and is selling off assets, excluding some one-time accounting charges the firm's profit declined from $1.4 billion in Q1 2012 to $1.2 billion in Q1 2013.

Not only that but lawsuits are still a killer. Last October, bank analyst Meredith Whitney said they would be an "endless beat down" for Wall Street and it looks like she was right.

Take Citi's toxic asset unit, the Special Asset Pool, for example. The unit had operating expenses of $572 million last quarter, adding 1% to the bank's total expenses. To put that in perspective, the unit's expenses for 2011 and 2012 combined were $619 million, according to Bloomberg.

Put together all that means that no one should be surprised if there are more layoffs.

Wall Street's earnings have an important message for Main Street as well — People are still hurting and the housing market has some ways to go, whether its recovering or not (that's a whole different argument). Bank of America reported that 90% of the mortgages on its balance sheet are being refinanced/legacies, and only 10% are new.

Charles Peabody, an analyst with Portales Partners, put it even more bluntly after JP Morgan announced its dismal earnings on the consumer side.

From Bloomberg:

“The consumer and community bank is 50 percent of JPMorgan and it’s not growing,” Peabody said. “Mortgage is shrinking, cards are flat and the branch system is just growing a little bit.”

There you have it, that's the state of Wall Street right now. Has it recovered?

A little bit.