My Investing Muse (26Oct2026) Waiting for the AI bank run An “AI bank run” is a possible risk, not a reported event [scenario]. In a bank run, withdrawals outpace repayment. Here, lenders and investors could withdraw funding faster than AI projects can replace it or renew debt. The risk is in credit markets, not bank queues. Rising lower-rated data-centre financing makes this scenario relevant. Cybersecurity and AI oversight. [fact] Last week brought an urgent CISA patch alert, a PyTorch supply-chain flaw and a critical GitLab bug. Claims that OpenAI lacks resources to address concerns are unverified. Can oversight keep pace with more autonomous AI? Sam Altman ruled out a 2026 IPO in September [fact]; a listing remains a future possibility. Listings require disclosure, while regulators sep

News and my thoughts from the past week (26Oct2026) 1. Major-company job cuts — American Express: 5%, about 3,500 employees; Barclays: 5,000 as AI improves efficiency; eBay: about 9%; Netflix: 6% globally, about 1,000 (WSJ via X user Zerohedge). Comcast plans significant cuts before its NBCUniversal spinoff (Bloomberg, 21 Oct). Perspective: cost savings are visible; extra AI revenue remains uncertain. 2. Morgan Stanley cuts its AMD chip forecast — Its 2026–2030 graphics-chip (GPU) forecast fell 43%, from 14.1 million to 8.0 million units: 5.9 million fewer (Morgan Stanley chart, 14 October). Perspective: weaker demand echoes the revenue and spending concerns in items 3 and 5. 3. AI revenue: expectations versus results — Rand Group Research compares combined OpenAI and Anthropic annual recu

Bank earnings intensify but should investors should be looking at net interest margin or loan-loss reserves first, or there is something else that should be considered? In this article, we would like to share an investor's guide to evaluating financial stocks in an evolving rate & credit cycle. 1. The Primary Dilemma: Net Interest Margin vs. Loan-Loss Reserves When financial institutions open earnings season, investor attention typically splits between profitability drivers and credit risk indicators. Determining whether to analyze Net Interest Margin (NIM) or Loan-Loss Reserves first depends entirely on the prevailing stage of the economic cycle. Net Interest Margin (NIM) measures the net margin between the interest income generated by a bank’s assets (loans, securities) and the inter

The data still looks closer to “spending as usual” than broad cutbacks. JPMorgan’s debit and credit card spending rose 10% YoY, while Citi reported US card spending up 11%. Credit quality is holding up too, with JPMorgan’s card charge-off rate falling to 2.91%. But I would not interpret that as consumers feeling comfortable. Persistent inflation and high borrowing costs are squeezing affordability, and banks are preparing for risks beneath the surface. For me, the warning signal would be spending slowing at the same time as delinquencies and charge-offs start rising. Until then, the US consumer looks resilient, but increasingly dependent on employment and wage growth staying strong.

From my perspective, the US consumer still looks relatively resilient, but I think the picture is becoming more uneven. People may continue spending on essential goods and services, while becoming more selective about discretionary purchases as borrowing costs and living expenses remain high. What interests me most is the gap between these banks’ earnings. Strong trading revenue does not necessarily mean the overall economy is getting stronger. I would pay closer attention to net interest income, credit-card performance, loan growth, and deposit costs to understand whether consumers and businesses are becoming more financially stretched. I would not rush to conclude that everything is fine based on one quarter of earnings. I prefer to watch the next few quarters for signs of rising delinq

The U.S. Consumer Is Resilient, Not Invincible Americans are still spending, but spending quality matters more than headline numbers. JPMorgan reported a 10% year-over-year increase in combined credit and debit card sales, while Bank of America data showed household card spending rose 6.2% in September. Demand remains strong despite inflation and high borrowing costs. However, strong spending does not guarantee financial health. Wealthier households can spend comfortably, while others sacrifice savings or postpone major purchases. The bigger concern is what happens if the labor market weakens while interest costs remain high. Consumers have less room to absorb shocks, especially those carrying credit-card balances. My takeaway: The consumer engine is running, but investors should watch cre

I think people are still spending, but becoming more careful about where their money goes. Essentials come first, while big-ticket items and non-essential purchases are easier to put off. The consumer may still be holding up, but that doesn’t mean people aren’t feeling the pressure of higher prices.

BRK.B’s Continued BAC Exit Under new $Berkshire Hathaway(BRK.B)$ CEO Greg Abel, the continued reduction of $Bank of America(BAC)$ is the most conspicuous portfolio decision heading into BAC’s Q3 2026 earnings report. BRK.B’s Q2 2026 13F showed a sale of about 30.2 million BAC shares, equivalent to a -5.9% reduction and roughly $1.7 billion at quarter-end prices. It was BRK.B’s largest dollar reduction during the quarter. The sale continued the disciplined approach set by Warren Buffett. BRK.B owned just over 1.03 billion BAC shares in mid-2024 and has reduced its stake every quarter since. By the end of June 2026, it held 483.4 million shares, less than half of its earlier position. The Q2 filing marked t

I think consumers are becoming more selective rather than stopping spending altogether. Everyday essentials still get priority, but higher prices and borrowing costs are making people think twice about discretionary purchases. The key question is whether consumer resilience can continue into Q4.

The CET1 ratio determines the room banks can do three things: loan, buy back shares, and take losses JPM: CET1 from 14.8% → 13.9%, RWA increased $51 billion GS: CET1 from 14.3% (early year) → 12.4%, both market and credit RWA rose WFC: CET1 from 10.3% → 10.0%, target range bottom line Citi: CET1 maintains 12.8% but is only about 120 basis points higher than requirement

The gap between revenue growth and cost growth is narrowing or even reversing.

The first major bank results are in, and the market reaction is surprisingly useful. JPMorgan, Goldman Sachs, Citigroup and Wells Fargo collectively showed that high rates are still producing substantial earnings power. Net interest income remains strong, loan growth has not collapsed, and broad credit deterioration is not yet evident. Yet bank stocks sold off after the results. That tells me the market is no longer asking whether banks can make money at high rates. It is asking: How much of today's profitability is sustainable if rates stay high long enough to hurt borrowers, dealmaking and credit quality? That distinction determines what I would buy. NIM Is Strong, But Credit Is the Real Test Higher rates initially help banks because assets reprice and lending yields rise. JPMorgan gener

Q3 2026 bank results from JPMorgan Chase, Citigroup, Wells Fargo, and Goldman Sachs (reported October 13) paint a picture of a still-spending U.S. consumer who is drawing down savings, while banks prudently build reserves. This pairs with tight overall credit spreads that are masking stress on the large debt issuers funding the AI infrastructure buildout. Tomorrow’s reports from Bank of America and Morgan Stanley will provide further read-through.[]()  Consumer Spending Holds, but the Foundation Looks Thin Card and consumer data remain solid. Citigroup reported U.S. card spending up roughly 11% year-over-year (general-purpose cards +13%, with average loans +9% in that portfolio). JPMorgan saw debit and credit card sales volume rise 10% and average credit card loans up 7%. Charge-off r

I’m watching provisions more closely than NIM. Higher rates can support net interest income, but that benefit is fairly visible and can be partly offset by higher deposit costs. Provisions tell us something more important: whether banks themselves are seeing deterioration beneath the surface. If NIM stays healthy while provisions remain contained, that is a strong combination for banks. But if provisions jump sharply, especially across both consumer and commercial books, I would treat that as an early warning that higher rates are finally feeding through to credit stress. So for me: NIM drives earnings, but provisions drive the risk outlook. In this environment, the second matters more.

Major banks reporting tonight, but other than net interest margins, should investors be looking at other key factors or drivers, which could likely affect the major banks holding up valuations? In this article, we would like to provide an analysis that evaluates the critical drivers beyond NIM that investors must track to evaluate bank valuation durability. 1. The Limitations of Net Interest Margin Primacy Net Interest Margin (NIM) measures the net yield earned on a bank's interest-bearing assets relative to its interest-bearing liabilities. During the initial phases of monetary tightening, NIM expansion served as the core engine powering bank profitability. Assets re-priced rapidly to higher market rates while deposit costs lagged due to sluggish deposit beta response. However, relying on