Dimon’s Cockroaches Keep Appearing: Paul J. Davies

The cockroach sightings are multiplying. Two regional US banks disclosed credit losses due to fraud on Thursday in a week when investors were already on edge from the twin failures of Tricolor Holdings and First Brands Group, as well as some choice comments from industry leaders about poor lending standards. The seemingly idiosyncratic blowups could be viewed as one-off stories of poor management or bad behavior with little in common. But as accusations of fraud mount among companies that have been exploiting an over-eager supply of debt, the similarities may grow.

This is what has investors spooked. Each fresh case threatens a domino effect of ...