Big US banks warn of stress among lower-income consumers
Big US banks warn of stress among lower-income consumers
Across the bank, JPMorgan’s profits reached a record high in the second quarter at just over $18bn, a 25 per cent increase from a year earlier.
Jfc. This is why the richer get richer and the poor become homeless.
This is a good time to note basic financial literacy in the face of that quote and some surrounding issues.
One issue brought up in the article: as interest rates go up, loans become more expensive BUT savings become more powerful. For those who can afford savings, move your savings out of traditional banks (who only offer 0.1% interest rates), and move them into High Yield Savings (4%+), Money Market Accounts, Money Market Funds (5%+), or US Treasuries (5.5% State-tax free). These are nearly guaranteed returns (MMFs have only lost money twice in the past century and only for a few days worst case. US Treasuries have always returned their money, Savings Accounts have FDIC insurance).
The reason why JPMorgan is making more money is because too many consumers are financially illiterate and failed to move their money to better locations.
Investment Banking is a weird one. Asset prices have elevated, but profits don't seem to have really gone up. And now we're reaching a point where companies (ex: Starbucks) are forced to lower prices because too few people were coming in. So profits seem to be on the decline across large swaths of the economy.
Its weird: declining profits, investments into fucking bullshit (see AI), but heightening valuations? A bubble's afoot IMO. I don't know what will trigger a collapse but I don't think the prices in the stock market are fully real or realized. But on paper, it looks good.
All economic issues hurt the poor the most. Inflation? Bad for the poor. Deflation? Sounds good until you remember that deflation leads to jobloss which is overwhelmingly bad for the poor. Etc. etc.
I can't read this article because it's behind a paywall btw. So just responding to the headline here...
Here's an archive link.
Thank you very much! Its a good read.