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Wall Street Enters the “Cockroach” Wars

The multitrillion-dollar growth of private credit is fueling an acrimonious debate on Wall Street over whether this surging shadow market is the future of finance or the seed corn of the next crisis. Is Rowan right? Or Dimon? Or Gundlach? As Mike Mayo put it, someone is wrong.

Mike Mayo
The crux of the disagreement, Mike Mayo suggested, is both philosophical and temperamental. “The one word that sums up the concern from the bank investor side would be ‘opaque,’” he said. “I think a lot of investors and banks don’t know what they don’t know, whereas what I hear from the experts on the private credit side is, ‘You just have to do your homework, dig deeper, and you’ll better understand the business models and why they make the money they do.’” Photo: Christopher Goodney/Bloomberg/Getty Images
William D. Cohan
November 26, 2025

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Last week, I sat down with Mike Mayo, the esteemed longtime bank analyst at Wells Fargo, to discuss the $2 trillion elephant in the room. As my readers well know, there’s metastasizing concern on Wall Street about the fast-growing private credit industry, where high leverage and a lack of transparency are fueling fears of potential financial contagion as the economy shows signs of stress. Jamie Dimon has been talking about “cockroaches” in the credit markets. Howard Marks has referenced the “cockroaches in the coal mine.” Jeffrey Gundlach has described an epidemic of “garbage lending” akin to the subprime mortgage shenanigans of 2006.