The biggest US banks have some bad news about the American economy

Six of the biggest lenders all expect heavy credit defaults and soured loans, as shown by their loan loss provisions, which jumped 43% from the already hair-raising totals in the first quarter to a combined $36 billion in the second quarter. Loan loss provisions aren’t, as they sound like, a special pot of money set aside for when loans go bad. It’s more like the amount of money banks expect to lose on their loans; it demonstrates the losses their capital may have to absorb in the months ahead and is subtracted from their earnings.