Jamie Dimon says “Cockroaches” lurk in the US economy

Wall Street’s worst fear got a name this week: cockroaches. That’s what Jamie Dimon, the CEO of JPMorgan Chase, called the unseen threats lurking in the US financial system.

On Wednesday, during an earnings call, Jamie warned that when you find one, you should assume more are hiding. His exact words: “I shouldn’t say this, but when you see one cockroach, there’s probably more. Everyone should be forewarned on this one.”

That warning came as banks and investors were already dealing with fresh chaos linked to two ugly bankruptcies in September; Tricolor Holdings, a subprime auto lender, and First Brands, a big-name auto parts supplier.

These two collapses triggered a disaster that’s now hammering mid-sized banks, investment firms, and their shareholders.

Zions and Western Alliance suffer from credit hits

On Thursday, the fallout hit regional banks the hardest, dragging their stocks down fast. Zions Bancorporation fell by 13%, while Western Alliance dropped by nearly 10%.

Those stock hits weren’t out of nowhere. On Wednesday, Zions had revealed it had taken a $50 million charge-off, wiping out two unpaid business loans through its California Bank & Trust division. The bank said it discovered “legal actions initiated by several banks and other lenders” linked to the two borrowers. An internal review flagged the issue, forcing the charge. No other comment came from Zions, which ignored further press questions.

By Thursday, Western Alliance stepped into the mess. The bank filed a lawsuit “alleging fraud by the borrower” over a revolving credit facility given to Cantor Group V LLC. It stressed that this had “no relation to First Brands or Tricolor” and called it “an isolated credit incident.” But even with that clarification, the market still panicked.

The timing couldn’t be worse. These disclosures landed on top of rising concern that credit conditions for commercial borrowers are weakening. Analysts and traders are now scanning for the next weak link. As more companies go under, banks are getting hit with unpaid loans and questionable counterparties. Jamie saw enough in his own shop to sound the alarm. On Tuesday, JPMorgan confirmed it took a $170 million charge-off tied to its wholesale lending to Tricolor. Jamie admitted to analysts: “It was not our finest moment.”

Jefferies investment exposed to First Brands collapse

While regional banks took visible hits, Jefferies Financial Group also got pulled into the mud. A court filing showed one of its asset management funds is owed $715 million by customers tied to First Brands. That was enough to tank Jefferies stock more than 10% on Thursday.

Trying to put a cap on the damage, Jefferies CEO Richard Handler and President Brian Friedman sent a letter to shareholders. They broke down their actual exposure: $43 million in receivables and $2 million in interest from First Brands loans. They insisted the effect was “readily absorbable” and called the market’s reaction “meaningfully overdone.” Still, the drop didn’t stop.

With tensions already high, Jamie’s comment about cockroaches only made Wall Street more nervous. Analysts spent the rest of the week pressing banks on how exposed they were to non-bank financial institutions, a sector that’s grown faster than any other in 2025.

The Federal Reserve reports that non-bank lending is the leading driver of loan growth across the US banking system this year.

On Thursday, KBW analysts wrote in a note that bank investors “are rightfully on high alert for any change in asset quality trends.” And David Chiaverini, a regional bank analyst at Jefferies, tried to offer a calmer view. He said these exposures “are getting attention,” but that “the way these loans are structured should protect the banks and lead to overall solid credit results.”

Whether that’s true or not, the mood is clear; Wall Street’s nerves are shot. And after everything that’s hit banks from every direction this month, no one’s brushing off Jamie when he says the cockroaches aren’t done crawling out.

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