Dimon’s Cockroach Warning Turns Bankers Into Exterminators

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Jamie Dimon’s warning about cockroaches crawling around in credit markets continues to resonate. Managers are trying to stamp out the threat by dumping risky holdings in one corner of structured credit at a record pace, while lenders are stepping in to take control of struggling private companies twice as fast as last year. Bloomberg Opinion columnist Paul J. Davies says UBS’s chairman is right to warn that insurance regulators might not be up to the task of monitoring their industry’s embrace of private credit, creating systemic risks. The same might be said about banks and their use of synthetic risk transfers.

Private equity might need to be renamed semi-private equity, given all the public scrutiny and the news it’s generating. Morgan Stanley is now offering reports and research into single names and venture-capital activities, joining rivals including JPMorgan Chase and Citigroup.

This week’s career news includes more pressure for pay raises, this time from bankers at Wall Street firms based in Switzerland, and how stricter US visa policy is boosting job prospects in India. There’s also a tidbit buried in Bloomberg’s fascinating account of Tricolor’s frantic final days, a story you should read regardless of your job security. Look for the part about how a junior analyst at Waterfall Asset Management was the one who detected that something was deeply amiss at the subprime used-auto lender. This seems worth keeping in mind amid all the declarations that artificial intelligence will wipe out the need for young financial pros. — Rick Green