Dimon’s ‘Cockroach’ Fear Revives Threat of Growing Credit Cracks

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Oct 14, 2025

Ian King, a U.S. semiconductor reporter for Bloomberg News, shares insights on AMD and Oracle’s significant partnership involving the deployment of AI chips. He discusses AMD's current challenges in gaining market share against NVIDIA and the broader implications of AI spending on the semiconductor industry. The conversation also covers concerns about supply chain risks and manufacturing timelines, as well as the future landscape of data-center chips as firms like AMD seek to capitalize on growing AI demands.

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INSIGHT

Why Banks Often Beat Estimates

Trading and capital-markets revenue drive most of the upside versus analyst estimates for big banks.
Banks and analysts often guide and model conservatively, making quarter-end trading strength hard to predict.

INSIGHT

Cockroach Warning For Credit Markets

Jamie Dimon warns that isolated credit failures may signal broader stress in private-credit corners of the market.
He expects higher-than-normal credit losses and weaker recoveries when the cycle turns, which would hurt lenders and investors.

ADVICE

Stress-Test Recovery Assumptions

Forewarned investors should stress-test recovery assumptions and expect lower recovery rates in downturns.
Adjust portfolios and underwriting to allow for higher credit losses in vulnerable sectors.

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Investors spooked by the implosion of auto lender Tricolor Holdings and car-parts supplier First Brands Group got little reassurance Tuesday from the head of the biggest US bank.
“My antenna goes up when things like that happen,” Jamie Dimon, JPMorgan Chase & Co.’s chief executive officer, said on a call with analysts. “I probably shouldn’t say this, but when you see one cockroach, there are probably more. Everyone should be forewarned on this one.”

The pair of bankruptcies were a shock for the credit markets, where companies have been borrowing at a record pace while handing investors outsized returns. And Dimon, fresh off posting results that put his bank on track for another record year, said there could be more pain than usual when the economy takes a turn for the worse. In drawing attention to investors’ growing disillusionment with public vehicles that hold private-debt investments, Dimon touched on a niche corner of the market where investors are on the lookout for signs of widening cracks in debt markets.

Investors have been fleeing BDCs, seen as a proxy for the $1.7 trillion private-credit market, as they cut distributions available to shareholders. That has opened a widening gap between the broader equity market and private-credit BDC stocks. Last month, the $75 billion non-traded Blackstone Private Credit Fund, the largest in the industry, said it was reducing its shareholder payouts.

Today's show features:

Bloomberg News Chief Wall Street Correspondent Sridhar Natarajan and Bloomberg Intelligence Senior Analyst for Global Investment Banks & Asset Managers Alison Williams on quarterly bank earnings from JPMorgan, Goldman Sachs, Citigroup and Wells Fargo
Bloomberg News US Semiconductor Reporter Ian King on Oracle’s deal to deploy a large batch of AMD’s forthcoming MI450 chips next year
Cathy Seifert, Vice President of CFRA Research, on BlackRock’s quarterly earnings and outlook
Bloomberg News Global Economy Reporter Enda Curran US China on global trade shifts brought on by tariffs

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