A $35 Billion Bite From U.S. Bank Profits May Only Be the Start
- Things are about to get ugly. But nobody knows how ugly.
- ‘It’s just very peculiar times,’ says JPMorgan’s Jamie Dimon
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The six giant U.S. banks that just cut $35 billion from their profits to brace for a tsunami of souring loans also offered this confession: They don’t really know how bad it’s about to get.
Data that normally hints at pending losses on loans isn’t obeying the financial world’s usual laws of physics amid a slew of government programs temporarily propping up consumers and businesses. The percentage of loans falling into delinquency unexpectedly fell this year even as millions of Americans lost their jobs. People who arranged to defer payments on credit cards and mortgages dutifully sent checks anyway.