‘Worse than people expect': Jamie Dimon sounds alarm about the next credit crisis — here's what big bank earnings show

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Despite — oregon possibly due to the fact that of — volatile markets and expanding user costs, the nation's largest banks continued to station beardown profits successful their second-quarter earnings, showing that the banking assemblage remains resilient adjacent arsenic concerns astir the system persist (1). But JPMorgan Chase, astatine least, is inactive preparing for a imaginable recession.

During JPMorgan's net telephone earlier this year, Chairman and CEO Jamie Dimon declined to foretell whether the U.S. was heading for a recession (2); however, helium has repeatedly warned that whenever the adjacent recognition rhythm arrives, losses connected leveraged lending are apt to beryllium "worse than radical expect comparative to the scenario."

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Here's wherefore JPMorgan is preparing for hard times, positive immoderate different takeaways from the large banks' latest net reports.

Volatile markets are bully for large slope trading

Many of the nation's largest banks person continued to study beardown earnings, with trading gross benefiting from periods of elevated marketplace enactment and capitalist uncertainty.

When markets get choppy, it tin make much opportunities for banks' trading desks arsenic investors buy, merchantability and set their portfolios successful effect to changing conditions. But that aforesaid volatility tin besides beryllium a informing motion for mundane investors, since it often comes with bigger swings successful banal prices and much uncertainty astir wherever the system is headed.

But trading wasn't the lone country wherever banks saw gross increases, arsenic galore saw double-digit maturation from wealthiness management.

Bank of America credited their 12% summation successful planetary wealthiness and concern absorption gross to "higher plus absorption fees, up 15% to $4.2 billion, reflecting higher marketplace valuations and beardown assets nether absorption flows" (5).

In different words, the slope was overseeing much lawsuit assets, helped by higher marketplace valuations and continued concern flows.

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