JPMorgan Chase & Co. (JPM) reported revenues of $25.2 billion versus consensus estimates of $26.8 billion. That’s enough of a miss to cause a chill in the whole market, which opened down slightly this morning. Citibank (C), Goldman Sachs (GS), Bank of America (BAC) and Wells Fargo (WFC) all opened lower this morning.

Profits soared to $3.28 billion, up from $702 million in the year-ago quarter. Full-year profits hit $11.7 billion for EPS of $2.26, a substantial improvement over 2008’s $5.6 billion and EPS of $1.35.

Company chairman and CEO Jamie Dimon noted “some stability in delinquencies,” which was the good news. In the same sentence he also said that “consumer credit costs remain high, and weak employment and home prices persist.” Dimon said that the bank “remains cautious.”

With good reason. Consumer spending remains awfully weak, and though the bank offered about 600,000 trial modification mortgage loans in response to government requests to do more for homeowners, just 15% of those loans were made permanent.

On the consumer credit front, JPMorgan increased its provision by $560 million, nearly doubling its retained capital from 4.83% at the same time last year to 8.25% at the end of 2009. That was probably a smart thing to do, given that net charge-offs totaled $685 million, nearly 8 times the $87 million in charge-offs in 2008. Non-performing loan losses were down from the prior quarter but up for the year.

The overall weakness in Morgan’s consumer products does not bode well for the other big banks which still have to report, nor does it give rise to any optimism about the U.S. economy in general. The bank’s experience with mortgage modification loans demonstrates again that simply lowering monthly payments is not enough. Credit card losses remain high, a lingering symptom of the over-wrought credit spending of two years ago.

Expect new calls for mortgage loan “cramdowns” from consumer advocates and some congressmen and senators. Modifying mortgage loans is not working because homeowners paid too much for their houses in the first place.

As for credit card debt, the banks are just going to have to take their medicine. And the rest of us will end up with much less access to credit which will in turn slow consumption, continue to put pressure on bank revenues and retard U.S. economic recovery.

Politicians will try to hold these banks accountable for at least their share of American consumers’ woes because that is the politically popular thing to do. It may even be the right thing to do. But the banks won’t suffer by themselves.

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