Six months ago, the most powerful banker in America walked onto a quarterly earnings call and used a word that doesn’t usually come up when bank CEOs talk to Wall Street: cockroaches.
It was Oct. 14, 2025. JPMorgan Chase (NYSE:JPM) had just taken a $170 million hit from the bankruptcy of Tricolor Holdings, a subprime auto lender that, as it later emerged, had been making car loans to borrowers without credit scores or, in many cases, driver’s licenses. A few weeks earlier, an auto-parts maker called First Brands had collapsed under what investigators believe was an opaque borrowing scheme involving as much as $2.3 billion in undisclosed loans. The Department of Justice opened a criminal probe.
Then Jamie Dimon said the line that would echo across Wall Street for the rest of the year: “My antenna goes up when things like that happen. And I probably shouldn’t say this, but when you see one cockroach, there are probably more. Everyone should be forewarned on this one.”
More Credit Issues?
It was vintage Dimon — direct, memorable, and just a little bit alarming. The comment got picked up everywhere. Howard Marks, the Oaktree Capital co-founder famous for his memos on credit cycles, wrote an entire November note titled “Cockroaches in the Coal Mine” riffing on Dimon’s framing. The word stuck.
He backed it up with a real-world view of where things were headed: “We’ve had a credit bull market now for the better part of since 2010. These are early signs there might be some excess out there. If we ever have a downturn, you’re going to see quite a few more credit issues.”
For investors, it landed at exactly the wrong moment. Bank stocks had been on a tear. Private credit — the world of non-bank lenders making loans to mid-sized companies — was in the middle of a multi-year boom that had pushed the asset class past $1.7 trillion. Dimon, who runs the biggest bank in the country, had essentially told the entire market: brace yourselves.
So everyone braced.
Then The Lights Came On
Six months later, the kitchen lights are on. The cockroaches haven’t shown up.
That, more or less, is the message Wall Street veteran Ed Yardeni sent his clients this past Saturday. In a market call titled “Up, Up & Away,” Yardeni — who has been calling markets since the 1970s — wasn’t writing about Dimon directly.
But buried in the bullet points was a line that read like a quiet rebuttal to the entire cockroach narrative: “Even the soft spot in private credit is showing signs of stabilizing.”
That’s it. One sentence. No drama, no rebuttal, no mention of Dimon. But the implication is hard to miss: the corner of the credit market that was supposed to spawn the next wave of failures is settling down, not heating up.
The rest of his note explains why he’s comfortable saying it. The S&P 500 is at a record high. Forward earnings just hit an all-time high of $346.19 per share. Q1 earnings growth jumped from 13.4% to 18.5% in a single week as more companies reported and beat expectations. Investor sentiment is still well below long-term averages — meaning there’s no euphoria to unwind. As Yardeni put it: “Rising-but-still-below-average sentiment is exactly the profile of a bull market with room to run.”
If a credit crisis were brewing, none of this would look the way it does.
Even The Skeptics Pushed Back
There were real failures. JPMorgan really did write off $170 million on Tricolor. Fifth Third Bancorp (NASDAQ:FITB) took $178 million. Barclays (NYSE:BCS) took $147 million. Regional banks First Citizens, South State, Zions, and Western Alliance all disclosed losses tied to fraud-linked borrowers. Dimon was telling investors not to assume these were one-offs.
But other voices were quietly making Yardeni’s point even back in October. Then-Fed Chair Jerome Powell, asked about Dimon’s warning, said he didn’t see “a broader” problem in the financial system. BlackRock CFO Martin Small told analysts the same week that the firm’s private lending business was seeing “generally strong credit quality” and “not seeing widespread credit stress.”
Morningstar DBRS, the credit-ratings agency, called the Tricolor bankruptcy “an idiosyncratic event” — driven by fraud, not credit performance.
Even Dimon’s own CFO, Jeremy Barnum, pushed back on the systemic-risk framing, telling analysts on the same call: “I don’t think… that there are necessarily lower standards there or a huge systemic problem.”
What Investors Got Instead
Six months in, the picture looks less like the early innings of 2008 and more like what it probably was at the time: a cluster of fraud-driven blowups in specific corners of the lending market — subprime auto, opaque receivables financing — that exposed bad underwriting at a handful of firms. The losses landed where they were supposed to land. Stress in private credit funds rose, then plateaued. Banks ate their write-offs and moved on. Earnings kept climbing. The S&P 500 kept climbing.
Maybe the cockroaches are still in the walls, waiting for a real downturn. Dimon never said when, after all. He said if.
But for now, the lights are on. And as of Yardeni’s note this weekend, the floor looks pretty empty.
So far, it’s just crickets.
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