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Investing.com -- JPMorgan Chase CEO Jamie Dimon cautioned Tuesday that recent bankruptcies in the auto sector could signal broader credit problems ahead.
"My antenna goes up when things like that happen," Dimon said on an analyst call, referring to the September bankruptcies of auto lender Tricolor Holdings and car-parts supplier First Brands Group. "I probably shouldn’t say this, but when you see one cockroach, there are probably more. Everyone should be forewarned on this one."
The twin collapses prompted JPMorgan to re-examine its controls after finding itself exposed, though major financial institutions maintain that U.S. borrower credit quality remains strong overall.
Top executives from Citigroup, Wells Fargo, and BlackRock reported robust credit investing activity during their earnings calls, despite investor concerns about potential ripple effects slowing down the global corporate credit business.
The bankruptcies have nonetheless impacted certain areas of Wall Street’s credit markets, leading some debt investors to reduce exposure to specific sectors over worries about weakness in consumer and auto lending.
Dimon noted the extended bull market in credit since 2010 could be showing signs of excess. "If we ever have a downturn, you’re going to see quite a few more credit issues," he warned.
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