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Three big US banks release $5bn in loan loss reserves in sign of optimism… sad and scary

Jan 16, 2021 | Global Macro, USA

JPMorgan Chase, Citigroup and Wells Fargo have released a total of more than $5bn of pandemic-era loan loss reserves in a sign of optimism for the economic outlook even as the US reels from the latest wave of Covid-19.

We put a short position in banks in our GTO ( global macro strat).

The banks are doctors now. They improved Q4 figs just cause they cut loss reserves… when the bubble in credit is just gigantic…

The rational is just sad and scary : all-in with vaccines… no pb if delay in vaccination programs, no pb if « escape mutant » strain appears, no pb if delay in economic recovery (Goldman halved its Q1 GDP forecast) etc…

 

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