JPMorgan Chase and Wells Fargo are grappling with significant credit card debt issues. JPMorgan has over $500 million in bad mortgage debt despite making a $13.1 billion profit.
Wells Fargo’s debt has surged by 70%, with net charge-offs rising from $764 million in Q2 2023 to $1.3 billion last quarter. These debts, originating during the COVID-19 pandemic, are now considered unpayable, reflecting the broader economic strain and rising interest rates that have burdened many borrowers.
The roots of these debts trace back to the financial disruptions caused by the COVID-19 pandemic, which saw the Federal Reserve intervening with various measures. Despite these interventions, the economic recovery has been uneven, leading to increased interest rates and job market instability.
These factors have compounded financial pressures on borrowers, resulting in a significant portion of these loans becoming unpayable. While the banks are absorbing losses in their retail operations, they are compensating through other financial activities.
In response to these challenges, both JPMorgan Chase and Wells Fargo are diversifying their investment portfolios, including significant stakes in Bitcoin ETFs. JPMorgan has invested in BlackRock’s IBIT, Grayscale’s GBTC, and Fidelity’s FBTC, while Wells Fargo has a stake in ProShares Bitcoin Futures ETF.
Robert Kiyosaki, author of Rich Dad Poor Dad, has issued a bold prediction on silver, calling it the “best asymmetric buy” currently available.
Fresh data on Personal Consumption Expenditures (PCE) — the Federal Reserve’s preferred inflation gauge — shows inflation ticked higher in May, potentially delaying the long-awaited Fed rate cut into September or later.
Federal Reserve Chair Jerome Powell is once again under fire, this time facing renewed criticism from Donald Trump over the Fed’s decision to hold interest rates steady in June.
Billionaire investor Ray Dalio has sounded the alarm over America’s soaring national debt, warning of a looming economic crisis if no action is taken.