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If you want to see how America’s credit crisis is hitting the streets of your hometown, go to your local car dealer. Auto dealers depend on credit. They need it to run their stores and their customers need it to buy their products. From every angle, credit trouble hurts.

"I’m talking to dealers every day who are just hanging on," said Denny Fitzpatrick, Chairman of the California New Car Dealers Association and owner of Fitzpatrick Chevrolet Hummer in Concord, Calif.

There could be 300 to 400 fewer auto dealerships in America by the end of the year, predicted Paul Taylor, an economist with the National Automobile Dealers Association. In an ordinary year of economic growth, the industry adds 75 to 150 dealers, he said.

High gas prices that have turned buyers away from large trucks and SUVs - and all but obliterated Hummer sales - have hurt his business, but Fitzpatrick thinks tight credit is doing even more damage.

"We’re seeing people with Beacon scores that are pretty darned good," Fitzpatrick said, "and the finance companies are just looking for reasons to turn them down."

Not every car dealer sees the situation as that dire. John McEleney, president of McEleney Autocenter in Clinton, Iowa and vice chairman of the National Automobile Dealers Association, says he understands that things are hard, but his business is holding up fairly well.

McEleney owns several dealerships and sells several General Motors brands as well as Hyundai and Toyota cars and trucks.

"Probably the most direct effect for me has been availability of retail financing for my customers," said McEleney.

So far his customers can still get auto loans, McEleney said, but they may need a bigger down payment.

"I wouldn’t say it’s that dramatic, yet," he said.

Fortunately for him, McEleney said, Iowa didn’t experience the run-up in home prices other parts of the nation did, including California. That’s means it hasn’t experienced the home equity crash, either.

In most of the country, the collapse of the housing market has left consumers without the low-cost home equity loans that drove car sales in recent years. Also, the drain of home equity has left potential customers feeling poor, said NADA economist Paul Taylor. That, as much as the actual loss of low-interest credit, has hurt car sales.

With sales down, auto dealers who carry large inventories are experiencing their own credit squeeze.

"The cost of doing business is going up," said Mike Jackson, chief executive of AutoNation, the country’s largest car dealership chain. "Especially on floorplanning with domestics."

"Floorplanning" is the line of credit dealers use to pay for their inventory. Domestic-brand auto dealers who carry large inventories will be among the first to die, Jackson predicts.

Floorplan loans become burdensome the longer cars go unsold. For the first three months a car is in inventory, interest on the floorplan loan is usually reimbursed by the manufacturer. Later, if a vehicle is still there after about six months, finance companies can start demanding payment on the principal on the loan.

As credit markets have tightened, GMAC and Chrysler Credit have raised interest rates and what are called "curtailment" costs, the cost of having vehicles in inventory for a long time, according to reports in the industry newspaper Automotive News. (GMAC and Chrysler credit would not confirm those reports.)

"When you’re scrambling with cash flow like this, it’s ‘How are we going to pay these costs?’" said California dealer Fitzpatrick, who finances his inventory through GMAC.

Many dealers have learned to operate with leaner inventories, said Iowa’s McEleney.

"When a dealer is called upon to pay down $100,000 to $200,000 in inventory they have to look to other outlets," said McEleney. Those other "other outlets," other credit sources to draw from to pay curtailment costs, are no longer easily accessible, he said.

Finance companies have an incentive not to squeeze high-performing dealers too hard, McEleney said. Pushing away a good car dealer means driving away a lot of potential consumer auto loans.

"Historically, that’s been a very desirable piece of business from a lender’s standpoint," he said.

That gives big, multi-store dealers more bargaining clout with lenders, said NADA economist Taylor. For example, Asbury Automotive, a large national dealer chain, recently announced that it had locked in a line of credit with several banks. Smaller dealers can’t do that and their interest rates have been fluctuating widely, said Taylor.

Squeezing dealers on curtailment costs can be a way for manufactures and their affiliated auto finance companies to weed out dealers they see as underperforming, Fitzpatrick said. GMAC has been scrutinizing his dealership’s finances more closely, he said. (GMAC could not immediately comment on Fitzpatrick’s complaints. A spokewoman for General Motors said GM plays no role in floorplan financing.)

"The big question is ‘Who’s going to be left standing?" he said. 

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The United States needs to act urgently to shield its economy from an escalating credit crisis and Europe must ready plans in case its problems worsen, the head of the International Monetary Fund said on Tuesday.

“We’re right at the moment where action is needed,” IMF Managing Director Dominique Strauss-Kahn told Reuters.

“A non-perfect plan is better than no plan at all,” he said of the $700 billion bank bailout plan rejected by the U.S. House of Representatives on Monday.

Strauss-Kahn said restoring market confidence required the bailout plan to be passed quickly and for the U.S. public to understand what is at stake unless the economy starts to function properly again.

As the crisis has spread beyond Wall Street, European countries have stepped up their efforts to avoid bank defaults as concerns grew that more institutions would fail, prompting the Irish government to guarantee all bank deposits.

The lack of a pan-European regulator makes it more difficult to respond to the crisis in the event of the collapse of a big bank whose business crosses borders, Strauss-Kahn said.

“Developing a contingency plan does not mean it’s announcing a lot of trouble coming. But they’re not totally immune (from the U.S. financial crisis), and so they need to organize. At the European level this is totally needed.

“The EU rules make it much more difficult than in the U.S.,” to act across borders, he said. 

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Premier Dalton McGuinty is shuffling his cabinet this afternoon to underscore the importance of attracting business and new investment to battered Ontario, which has shorn more than 200,000 manufacturing and forestry jobs in the past few years.

Sandra Pupatello moves from economic development to a new international trade and investment ministry.

Her old duties will be taken up by Michael Bryant, who moves from aboriginal affairs and remains House leader.

Labour Minister Brad Duguid succeeds Bryant at the always challenging aboriginal affairs ministry.

Duguid will be replaced by Tourism Minister Peter Fonseca payday loan low fee.

The new tourism minister will be Monique Smith, whose responsibilities as revenue minister will be taken over by Finance Minister Dwight Duncan.

Lieutenant Governor David Onley will swear in McGuinty’s revamped cabinet at 3:30 p.m.

It’s unusual to have a cabinet shuffle just days before a new legislative session, suggesting the premier is highlighting the urgency of Ontario’s sagging economy.

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The Canadian Auto Workers union is trying to form a committee for a possible organizing drive at WestJet Airlines.

The CAW confirmed yesterday it has received calls from WestJet employees expressing interest in the union, and it is now working on a committee.

"We’re at a very preliminary stage," said union president Ken Lewenza, who took the reins of the CAW on Sept. 4. Lewenza, who ran Local 444 in Windsor for 14 years, succeeded Buzz Hargrove, who was CAW president for 16 years.

Calgary-based WestJet employs about 5,700 and promotes the idea of workers becoming owners of the company no qualifying payday advance.

The CAW wants to become more aggressive in organizing outside the manufacturing sector, where it has lost thousands of members in recent years because of plant closings. The union already represents some 5,000 Air Canada workers.

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Federal Reserve Chairman Ben Bernanke said Friday that the problems in the nation’s financial markets persist and still threaten the economy.

Bernanke said that the financial woes, coupled with record oil prices and the weakening economy, had created "one of the most challenging economic and policy environments in memory."

In prepared remarks at a conference in Jackson Hole, Wyo., Bernanke also said he is encouraged by the recent oil price decline, which may signal that inflationary pressures are on the wane.

"Although we have seen improved functioning in some markets, the financial storm that reached gale force some weeks before our last meeting here in Jackson Hole has not yet subsided," Bernanke said.

"Its effects on the broader economy are becoming apparent in the form of softening economic activity and rising unemployment," he added.

Bernanke’s comments seem to signal that the central bank will keep its key interest rate at 2%, rather than raise it an attempt to keep prices in check.

"The commentary tells me that rates are on hold until they see some blue skies through this financial storm," said John Silvia, chief economist for Wachovia.

The Fed cut interest rates seven times from September through April, but left them unchanged at its last two meetings.

Earlier this summer, investors and economists were widely expecting the Fed to start raising rates as early as this fall. But there is now widespread agreement that rates will remain on hold at its next two meetings in September and October and some economists are predicting rates will stay at current levels into next year.

Silvia said the Fed had little choice but to focus on upheaval in the credit markets rather than on inflation as it cut rates. And while he agreed that financial market woes are not behind us, he said the Fed faces a risk of inflation getting out of hand the longer it keeps rates on hold.

"Inflation is not out of control, but it’s clearly drifting away," he said.

Bernanke’s remarks come more than a week after the Consumer Price Index, the government’s key inflation measure, rose to a 17-year high, gaining 5.6% over the previous 12 months. The Producer Price Index, a measure of wholesale inflation, also rose this week to a 27-year high.

Still, Bernanke reiterated that the Fed expects an economic slowdown to cause "inflation to moderate later this year and next year." And while he added that the "inflation outlook remains highly uncertain," Bernanke appeared to downplay inflation risks relative to other challenges facing the economy and global credit markets.

The discussion of inflation pressure was only a brief part of the speech, which focused on the need for stability in financial markets absolutely free credit report. Bernanke defended actions by the Fed over the past year. And he said that the Fed and regulators needed to be on the lookout for other threats to financial markets.

Bernanke offered one of the most detailed and strongest public defenses of the Fed’s role in preventing a bankruptcy at Bear Stearns in March. He argued that while Bear Stearns was not that large in comparison to other Wall Street firms, its failure would have had severe ripples throughout the financial system that the Fed could not risk.

"With financial conditions already quite fragile, the sudden, unanticipated failure of Bear Stearns would have led to a sharp unwinding of positions in those markets that could have severely shaken the confidence of market participants," he said. "The broader economy could hardly have remained immune from such severe financial disruptions."

His speech did not make any reference to Fannie Mae (FNM, Fortune 500) or Freddie Mac (FRE, Fortune 500), the two troubled mortgage finance firms who have seen their shares battered this month on fears that the government will be forced to take them over.

But his defense of the Bear Stearns action and his discussion of a doctrine of rescuing firms deemed too big to fail seemed to signal his approval of the Treasury Department taking action if either firm were to face problems covering rising losses from the trillions in mortgages they own or guarantee.

In another comment that could be read as addressing the problems facing Fannie and Freddie, he said that regulators of financial institutions had to be careful not to force troubled firms to cut back on their lending at times of economic stress.

He said mandating tighter lending standards might help the "safety and soundness of a particular institution" that such "excessively conservative lending policies could prove counterproductive if they contribute to a weaker economic and credit environment."

He also said that it is important that Congress take steps to spell out more explicitly what steps could be taken by the government to help rescue other financial institutions whose failure would pose a risk to the broader economy. He said that the Treasury Department is probably the agency best suited to perform those rescues. 

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Just because consumer stocks are staging the biggest rally in five years doesn't mean the economy is about to recover.

As Lowe's Cos., Wendy's International Inc. and Starwood Hotels & Resorts Worldwide Inc. led a 7.6 percent advance in consumer stocks this month, the extra yield bond investors demanded to own the industry's debt rose to 2.5 percentage points over U.S. Treasuries. Every time bondholders sought that much compensation to guard against default, shares of retailers, restaurants, and hotels slumped an average 16 percent, according to data compiled by Bloomberg.

Standard Life Investments, Harvard University's endowment and hedge fund Appaloosa Management LP, which manage almost $300 billion, are avoiding the shares as Americans rein in spending to cope with the highest unemployment rate in four years and faster inflation. Profits at consumer discretionary companies are forecast to be the worst since 2001, Bloomberg data show.

“It's a rally that we think will inevitably roll over,'' said Andrew Milligan, the Edinburgh-based head of global strategy at Standard Life Investments, which oversees about $242 billion. “Investor confidence has started to ease back and earnings numbers have generally been negative. The credit side just reinforces our downbeat views.''

Stocks Versus Bonds

Consumer shares have risen almost four times as fast as the Standard & Poor's 500 Index in August, sending the S&P 500 Consumer Discretionary Index toward its biggest monthly advance since an 8.9 percent increase in October 2003. A 22 percent drop in oil since its July peak and speculation the Federal Reserve will hold off raising interest rates after seven cuts in the past year improved prospects Americans will spend more. Consumer stocks in the MSCI World Index are up 1.8 percent this month.

Futures on the S&P 500 lost 0.4 percent at 11:14 a.m. in London as oil's climb above $115 a barrel sent retailers lower.

This month's gains in consumer stocks coincided with an increase in the difference between yields of U.S. retailers' bonds and those of government debt to 2.47 percentage points as investors demanded more protection against the likelihood of default, according to data from New York-based Merrill Lynch & Co.

When the gap exceeded 245 basis points in 2000, 2002, 2005 and March of this year, the consumer discretionary gauge lost an average of 16 percent over the same span, the data show. A basis point is equal to 0.01 percentage point.

Shares of Mooresville, North Carolina-based Lowe's, the world's second-largest home-improvement retailer, surged 22 percent this month as the extra yield investors demanded to own the company's 5.6 percent bond due in 2012 widened 23 basis points over U.S. Treasuries.

`Voting With Bondholders'

That's more than three times the average increase of A- rated corporate bonds over the same period, Merrill's data show.

The premium on Wendy's 7 percent bond due in 2025 climbed as much as 33 basis points above U.S. government debt this month, almost triple the gain in spreads of similar BB-rated debt. The Dublin, Ohio-based hamburger chain's stock added 16 percent.

The disparity between the stock and bond markets comes as analysts are forecasting the industry's biggest full-year profit decline since the last recession in 2001. Earnings at S&P 500 consumer-discretionary companies will drop 22.9 percent this year, data compiled by Bloomberg show payday loan.

“I would be inclined to vote with the bondholders,'' said Jack Ablin, who oversees $65 billion as chief investment officer at Harris Private Bank in Chicago. “They're sensing there's still credit deterioration going on in the group.''

Earnings Plummet

Lowe's, Wendy's and Starwood, the White Plains, New York- based company that runs the Westin, St. Regis and W hotels, all reported lower earnings for the second quarter. Industry profits have dropped 54 percent on average, the highest on record for Bloomberg data that started in 2001.

LPL Financial's Jeffrey Kleintop expects consumer stocks will continue to do well as profits decline less than analysts estimate. More than 91 percent of the S&P 500 retailers that have reported second-quarter results so far topped Wall Street's consensus forecast, data compiled by Bloomberg show.

“The outlook isn't rosy, but certainly better than what had been priced into those stocks,'' Kleintop, the Boston-based chief market strategist at LPL, which oversees $273 billion, said in a Bloomberg Television interview.

Fed Rate Cuts

Consumer stocks in the U.S., where the Federal Reserve cut its benchmark interest rate to 2 percent from 5.25 percent in the past year, are outperforming the rest of the world. The MSCI Brazil Consumer Discretionary Index lost 9.8 percent in August, while retailers, automakers and electronics makers in the MSCI Asia Pacific Index fell 2.3 percent.

To maintain the advantage, U.S. retailers will have to defy an unemployment rate that rose to 5.7 percent last month and the fastest inflation in 17 years. The economy, buffeted by the biggest U.S. housing slump since the Great Depression and more than $500 billion in bank losses, may grow 0.45 percent next quarter, or about a third the annual rate of 1.2 percent forecast this quarter, according to data compiled by Bloomberg.

“You only have so many dollars or francs or euros in your pocket,'' said Robert Weissenstein, who helps oversee $1.3 trillion as chief investment officer at Credit Suisse Private Bank. It's difficult to turn bullish “as long as you get mixed to negatively biased jobs data,'' he said from Tucson, Arizona.

Harvard Endowment

Harvard's $34.9 billion endowment, the biggest of any university, sold its holdings in 79 of 92 consumer companies including Lowe's, Wendy's and Starwood, during the second quarter, the Boston-based college fund's filing with the U.S. Securities and Exchange Commission compiled by Bloomberg show.

Appaloosa, the Chatham, New Jersey-based hedge-fund firm run by former Goldman Sachs Group Inc. bond trader David Tepper, held 10.4 percent less in consumer stocks at the end of the second quarter, partly after selling its 175,000 share stake in Starwood, filings compiled by Bloomberg show. Appaloosa, which owned equities valued at $3.1 billion as of June 30 and also invests in bonds, has posted average annual returns of about 25 percent in its Palomino Fund since the beginning of 1995.

“The corporate bond market has sold off first, fastest, and then equities follow after,'' said Standard Life's Milligan. “What the credit markets are telling us is that we need to still be cautious.''

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Oil traders have long been accustomed to reading the tea leaves for clues to the true state of fuel consumption in China, but even the savviest analysts are being tested this year by a befuddling mix of signals.

An unexpected second month of weak crude oil imports reported on Monday gave fresh vigor to the bears, who read it as a signal that refiners had overestimated demand; bulls are still enraptured by surging diesel and gasoline imports, which they say may continue as industries resume operations after the Olympics.

Both could be wrong.

With major new refiners being started toward the end of this year, China’s crude oil import growth should accelerate but its massive products stockpiling will slow, cutting fuel imports.

Between the rapidly shifting trade flows and the lack of transparency around inventory levels, which were built up substantially ahead of the Olympic games this month, traders will be hard pressed to determine whether a U.S.-spawned economic slowdown is finally taking the wind out of China’s sails.

That’s a key question for oil markets that have risen sixfold in as many years, driven in large part by burgeoning Asian demand.

Some closest to the pump say the day has already arrived, nearly two months after Beijing surprised the nation with a near 18 percent rise in subsidized gasoline and diesel prices.

“Demand is definitely coming off after the price hike bad credit payday loans. Among the worst hit is the transportation sector, which had been operating on razor-thin margins even before the increase,” said Qi Fang, a long-time independent dealer who owns a dozen petrol stations in Hebei province, near Beijing. 

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French bank Societe Generale SA said Tuesday net profit fell 63% in the second quarter, after its investment banking unit posted a loss.

Net profit dropped to $1 billion in the second quarter from $2.71 billion a year ago, SocGen said in a statement.

Continued turmoil in global financial markets led SocGen’s corporate and investment banking unit to a $290 million loss, compared with a $1.12 billion profit a year earlier, the bank said.

SocGen is still managing the fallout from $7.18 billion hit it took closing what it calls unauthorized positions by former trader Jerome Kerviel cash advance loan. The loss was announced in January but included in the bank’s 2007 results.

France’s second-largest bank has tightened security and changed its top management this year, splitting the posts of CEO and chairman.

CEO Frederic Oudea, promoted from CFO in May, said the second quarter result "reflects the robustness" of the bank’s portfolio of activities, despite what he calls "a crisis on an exceptional scale." 

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Call it the big fizzle. The hoped-for second-half economic rebound is looking to be lethargic, with the country straining under high energy prices and fallout from the housing and credit debacles.

Forty-five percent of economists believe the economy won’t log any growth or will clock in at a feeble 1% pace in the final six months of this year, according to a survey being released Monday by the National Association for Business Economics, which is known by the acronym, NABE. And, 10% think economic activity could actually contract during the period.

"Forecasters are approaching the second half with a lot of caution," Ken Simonson, point person on the survey and chief economist for the Associated General Contractors of America, said in an interview. "Most forecasters are suggesting the outlook will be sluggish, but not desperate. I’m afraid we’re stuck on the ground floor of growth."

Thirty-two percent, meanwhile, think the economy growth’s during the second half could be between 1% and 2%, which would mark a plodding performance. The more bullish are clearly in the minority camp: 11% think growth will come in between 2% and 3%. Only 1% expect growth to surpass 3%.

The economy’s growth slowed sharply in the final quarter of 2007 and remained stuck in a rut in the first quarter of this year. Tax rebates, which have energized shoppers, should help lift the country out of the doldrums somewhat in the second quarter. The government releases its estimate of the second-quarter’s economic performance at the end of this month. However, as the bracing force of the rebates fade, some analysts fear the economy could hit another rough patch near the end of this year.

Earlier this year, many thought that the first half of this year would be difficult and the second half would be stronger, lifted by the government’s $168 billion stimulus, including tax rebates for people and tax breaks for businesses. With the rebates kicking in earlier than some expected, the second half could turn sluggish.

Many have "abandoned the notion of seeing a rebound," Simonson said.

Federal Reserve Chairman Ben Bernanke, who briefed Congress on Tuesday and Wednesday, warned that over the rest of this year, the economy will grow "appreciably below its trend rate" mostly because of continued weakness in housing markets, high energy prices and tight credit conditions.

Normal activity would be along the lines of a 2.5% to 3% growth rate for the economy.

Not only is the country slogging through lethargic growth, but it is also confronted by rising prices that threaten to spread inflation.

In the NABE survey, 75% reported paying more for raw materials, such as fuel and steel no fax payday loans. That’s the highest percentage in record keeping going back to 1994. Those higher prices are squeezing profit margins and leading some firms - 35% - to boost their prices, the survey found. That’s up from the 29% who said their companies raised prices in the previous survey in April.

Consumer prices in June rose at the second-fastest pace in a quarter century, the government reported Wednesday. Wholesale prices also went up sharply during the month.

Meanwhile, most forecasters expect a continued slowdown in housing over the next six months, although they think it will be "mild" versus "substantial."

Grappling with fallout from housing and credit troubles and stung by high costs for energy and other raw materials, employers have cut jobs in each of the first six months of this year. Over the next six months, 51% said they expected to hold payrolls steady. Twenty-nine percent expected to boost them and 20% thought jobs would be reduced through layoffs or attrition.

Caught between slow growth and rising prices, the Fed is likely to leave interest rates alone when they meet next on Aug. 5. Boosting rates to fend off inflation would deal a setback to the economy and further hurt the housing market. The Fed can’t afford to lower rates more to shore up economic activity because that would make inflation worse.

Sixty-two percent said the Fed’s nearly yearlong string of rate reductions and other steps to prop up financial markets, had no effect on their business.

The survey, based on the responses of 101 NABE members, was conducted between June 19 and July 10. 

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JPMorgan Chase said Thursday that profit plunged in the second quarter, stung by $1.1 billion in writedowns, but the firm still managed to beat Wall Street projections.

JPMorgan (JPM, Fortune 500) shares jumped 10% in early trading. Other banking firms - including Citigroup (C, Fortune 500), Merrill Lynch (MER, Fortune 500), Wells Fargo (WFC, Fortune 500) and Bank of America (BAC, Fortune 500) - also posted strong stock gains.

The New York-based bank reported net income of $2 billion in the second quarter, a 53% drop from $4.2 billion in the second quarter. The firm said earnings on a per-share basis fell 55% to 54 cents from $1.20 in the year-earlier period.

Analysts had expected a 64% decline in earnings per share to 44 cents, according to a consensus provided by Thomson/FirstCall.

But without a $540 million net loss stemming from its acquisition of Bear Stearns - which closed in May - net income would have been $2.5 billion, the company said.

"[JPMorgan] earnings are significantly better than what analysts have been looking for because the negative hysteria, panic, fear - whatever you want to call it that hit these stocks - made no sense whatsoever," said Richard Bove, analyst for Ladenburg Thalmann.

Bove said that financial firms tend to be multi-faceted, which allows them to compensate for the weak portions of their business with the stronger performing sections.

The firm reported $19.7 billion in second-quarter net revenue, a 1% decline from a year earlier. That beat the $16.5 billion projected by analysts surveyed by Thomson/FirstCall.

"Our earnings were down significantly due to the unfavorable credit environment and market conditions," CEO Jamie Dimon said in a statement.

JPMorgan bought Bear Stearns on May 29 for $2.2 billion, or $10 a share. The deal allows JPMorgan to expand its financial footprint, though it also has has to clean up the mess from its imploded acquisition.

Housing hit Dimon said the plummet in investment bank net income, to $400 million in the second quarter from $1.2 billion a year ago, was partly due to mortgage-related investments.

He blamed the drop in profit in retail financial services on higher charges to the home lending portfolio. Profit in that division fell to $600 million from $785 million a year ago.

"However, the firm overall continued to maintain solid underlying business momentum," Dimon said, noting that some other areas of the company performed well.

Commercial banking net income grew to $355 million in the quarter, up from less than $300 million a year earlier payday advance.

Despite the decline in earnings, and drop in share price - JPMorgan (JPM, Fortune 500) stock has plunged 29% so far this year without counting Thursday’s gains - the firm is considered one of the stronger companies in the banking industry.

As the year has progressed, analysts have become increasingly concerned about JPMorgan’s performance, particularly in its large leveraged loan portfolio and rapidly weakening home-equity loan holdings.

But the firm’s troubles seem manageable compared to other participants in the devastated industry, such as Citigroup (C, Fortune 500) and Merrill Lynch (MER, Fortune 500).

"I think we’re executing quite well," Michael Cavanagh, chief financial officer, said during a call with journalists. "The conditions continue to be choppy. A lot of stuff is resolving itself and working itself through."

"At a point, it will stabilize, but I would be cautious for the near term," he added.

Bank sector woes Both large and small financial institutions that bet big on the mortgage industry continue to be plagued by ongoing deterioration in the housing market. Now with signs that the economy is weakening further, analysts are paying particularly close attention to banks’ credit card and auto loan portfolios for signs of rising delinquencies.

JPMorgan said its auto loan net profit slipped 2% on a year-over-year basis to $83 million. The firm’s credit card net profit plunged 67% to $250 million.

JPMorgan’s results come at the start of what is expected to be a particularly difficult second-quarter bank reporting period.

Despite Wednesday’s better-than-expected numbers from Wells Fargo (WFC, Fortune 500), both Merrill Lynch and Citigroup are expected to book losses for the quarter. Merrill is due to report earnings after the market close Thursday. Citigroup’s results are slated for release early Friday.

Wachovia (WB, Fortune 500), which reports on July 22, warned last week that it expects to lose between $2.6 billion and $2.8 billion during the second quarter. Profits for Bank of America (BAC, Fortune 500), due out on July 21, are expected to be less than half of what they were just a year ago.

Bove, the analyst, does not own banking stocks and his firm does not conduct business with them. 

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