It doesn’t mean that much except for bragging rights, but JPMorgan Chase has overtaken Citigroup as America’s second biggest bank by market value (but largest by assets) after its shares fell again overnight.

JPMorgan Chase’s fourth quarter results were as bad as expected, but nowhere near as bad as those reported by Citigroup yesterday. JPMorgan said fourth-quarter earnings sank 21% per cent following a $US1.3 billion subprime-related write-down, much less than Citi’s $US9.8 billion overall loss and $US18.1 billion in write-offs.

JPMorgan shares rose $US2.26, or 5.8%, to $US41.43 in New York today, lifting the firm’s market value to $US139.5 billion. Citigroup’s market value fell to $US131.1 billion as its shares dropped 2.6%. Both trail Bank of America which has a market capitalisation of $US171.7 billion.

Still, the market moves ignored a trend which emerged in both JPMorgan and Citigroup’s results: the consumer debt picture is worsening, making a mockery of those economists who reckon Wall Street problems don’t become Main Street concerns.

It’s clear from the results of the two banks in this area, plus last week’s earnings warnings from American Express and the credit card issuer Capital One (not to mention luxury goods retailer, Tiffany’s) that the subprime mess is now hurting consumer debts in the car loans, personal credit and credit card area.

Citi’s write-offs included a surprise $US4.1 billion hit for its consumer book and JPMorgan also saw increased credit costs with the provision for credit losses in the retail financial services division rising to $US1.1 billion, compared with $US162 million in 2006. The provision for losses on the bank’s giant credit card business rose 40% to $US1.8 billion.

The US consumer is clearly in trouble, so it’s no wonder they cut their spending at Christmas. This is bad news for an economy which has been driven by consumer spending for much of the past five years. The booming export sector isn’t enough to make up the difference.