JPMorgan is the latest big bank that could be in trouble. This is very serious and dangerous.
JPMorgan Chase said Thursday that its second-quarter income dropped 53 percent, pulled down by markdowns in its investment bank and spiraling credit card and home loan losses.
So far, JPMorgan has weathered the tight credit market better than most of its peers, though its shares have been battered along with the rest of the financial sector. But as confidence rebounded on Wednesday, JP Morgan shares jumped 15.86 percent as nearly all bank stocks rallied. Its shares were also higher in premarket trading.
Still, the rising number of defaults in mortgages, home equity loans and credit cards suggested that the worst is not over. Chase, the bank’s big consumer arm, set aside $3.8 billion in reserves, about twice the amount from the previous year, to cushion its expected losses. Yet it caters to some of the industry’s most creditworthy borrowers.
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