JPMorgan exceeds profit expectations on $1.5 billion boost from better-than-expected loan losses [CNBC]
The gain came after the bank released $2.1 billion in reserves and had $524 million of charge-offs in the quarter… Companywide revenue rose 2% to $30.4 billion, mostly driven by booming fees in the firm’s investment banking and asset and wealth management divisions….
Fixed income revenue dropped 20% to $3.67 billion, below the $3.73 billion StreetAccount estimate. But equities trading revenue more than made up the shortfall, producing $2.6 billion, beating the $2.16 billion estimate…. The company posted a 50% increase in investment banking fees to $3.28 billion, exceeding the estimate by half a billion dollars.
Biden Administration Embarking on ‘Aggressive’ Tack for Cryptocurrency, White House Official Says [WSJ]
“You’re really seeing the administration at the beginning of what we expect will be an ongoing, quite aggressive effort to make sure we understand and address the whole range of risks that we see in the cryptocurrency space,” Mr. Harrell said at the WSJ Risk & Compliance Forum on Tuesday…. “We do think that the cryptocurrency industry has some potential benefits,” Mr. Harrell said, naming financial inclusion as one example. “But there are clearly a whole range of risks.”
Hedge Funds Are Feasting on ESG’s Profit Leftovers [Bloomberg]
Institutional investors “are all so keen to get rid of oil assets, they’re leaving fantastic returns on the table,” Crispin Odey of Odey Asset Management told the newspaper. His European fund has gained more than 100% this year, boosted by investments including Norwegian oil company Aker BP, whose shares have risen by more than a third…. While shunning companies with bad environmental practices is an easier option than trying to persuade them to mend their ways, it can endanger both fund returns and the planet. Capitalism, while remaining resolutely red in tooth and claw, needs to embrace the green agenda.
Racial Bias Skewed Small-Business Relief Lending, Study Says [NYT]
The majority of Black borrowers who received aid from the $800 billion relief program got their loan from a financial technology company, not a bank…. It turned out that the automated loan vetting and processing systems used by the fintechs, as well as some of the nation’s biggest banks, significantly improved approval rates for Black borrowers, the researchers found. They didn’t find such stark gaps for any other racial group they examined, including Asian and Hispanic applicants….
“The human brain is a much scarier black box than any machine-learning algorithm,” [NYU finance professor Sabrina Howell] said. “You can constrain an algorithm to meet fair-lending standards, and you can ensure the data it trains on isn’t biased. That may be hard to do, but it’s a clear and objective possibility. Whereas when you have a human loan officer who is in front of someone and making a decision, you can never do that.”
Billionaire Alibaba founder Jack Ma reportedly reappears in Hong Kong [Reuters via CNBC]
One of the sources said the visit marked his first trip to the Asian financial hub since last October…. Ma, once China’s most famous and outspoken entrepreneur, met at least “a few” business associates over meals last week, said the people.
A record 4.3 million workers quit their jobs in August, led by food and retail industries [CNBC]
“There is an enormous labor shortage in the country right now and it is not just because people are quitting or have child care problems, or can’t get to work due to the Delta variant,” wrote Chris Rupkey, chief economist at Fwdbonds. “The economy is strong as a bull, that is why there is a tremendous demand for labor.”