October 17, 2025 • 9 mins
LISTEN and SUBSCRIBE on:
Apple Podcasts: https://podcasts.apple.com/us/podcast/watchdog-on-wall-street-with-chris-markowski/id570687608
Spotify: https://open.spotify.com/show/2PtgPvJvqc2gkpGIkNMR5i
WATCH and SUBSCRIBE on:
https://www.youtube.com/@WatchdogOnWallstreet/featured
The cockroaches never left — they just found better hiding spots. In this episode of WDOWS, we go back to the 2023 regional bank meltdown — Silicon Valley, Signature, First Republic — and uncover why the rot in private credit, bad loans, and commercial real estate was never truly cleaned up. From Jamie Dimon’s “cockroach” warning to the extend-and-pretend game keeping zombie banks alive, this is a deep dive into Wall Street’s dirty secret: the big boys always win, and the small lenders (and borrowers) get crushed.
Apple Podcasts: https://podcasts.apple.com/us/podcast/watchdog-on-wall-street-with-chris-markowski/id570687608
Spotify: https://open.spotify.com/show/2PtgPvJvqc2gkpGIkNMR5i
WATCH and SUBSCRIBE on:
https://www.youtube.com/@WatchdogOnWallstreet/featured
The cockroaches never left — they just found better hiding spots. In this episode of WDOWS, we go back to the 2023 regional bank meltdown — Silicon Valley, Signature, First Republic — and uncover why the rot in private credit, bad loans, and commercial real estate was never truly cleaned up. From Jamie Dimon’s “cockroach” warning to the extend-and-pretend game keeping zombie banks alive, this is a deep dive into Wall Street’s dirty secret: the big boys always win, and the small lenders (and borrowers) get crushed.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski your
sneaky cockroaches?
Speaker 2 (00:18):
You cockroaches again? I channel my inner Tony Montana. Yeah,
cockroaches everywhere. Jamie Diamond brought that up. I say, one cockroach.
There's gonna be more of them there. Gee, thanks Jamie.
Twenty twenty three. Let's go back in time, Dan, you
(00:40):
want to go back and listen to my shows, my
podcast back during the whole First Republic Silicon Valley Bank situation. Yeay,
cockroaches still around.
Speaker 3 (00:52):
They've never been dealt with.
Speaker 2 (00:54):
Well, lots of uh, lots of back and forth talking
about bad loans and private credit. Yeah, and I get questions,
how do I trade this? How do I do this?
You can't?
Speaker 3 (01:10):
Okay, you can't. I'm gonna take everybody back in time.
You go back to the.
Speaker 2 (01:19):
Great Financial Crisis. We knew it, we called it here
on the program. We warned everybody. People asked me, well,
did you trade it? Did you trade like like like?
Bury did like like all these guys did. No, no,
I didn't trade it. There was other people that knew
what was going on. Well what they did, quite frankly,
(01:43):
was extraordinary crafting products. And even there that they you know,
Bury almost got whacked in of himself because again, you
can go short something and you can be one hundred
and ten percent right, but the street can wait you out,
(02:03):
the street can weait you out. They can manipulate the numbers.
This is one of the things that a lot of
people don't understand when it comes to Wall Street, especially
when it comes to credit markets, which is when it
comes to bonds. Like people think about the equities market,
in the stock market, that's the most legit one out
there as far as price discovery is concerned. All of
(02:24):
this other stuff. It's not you'd understand something. Bond traders
do whatever the hell they want. They do whatever they want,
do they manipulate. It's a complete joke. We don't think
the same thing holds true for credit loans, private credit. Sure, Sure, eventually,
(02:46):
eventually things during the Great Recession spirals out of control,
but that.
Speaker 3 (02:50):
Was much much bigger.
Speaker 2 (02:52):
We're talking yeah, we're talking billions upon billions of dollars
in bad loans, bad private credit, auto loan stuff that
we reported here on the program. Lots of cockroaches, no
doubt about it. Is this something that's going to cause
a major disconnect in the overall economy to financial markets, No,
(03:15):
I can't trade it because they can extend, call, extend
and pretend. That's been what's been going on with commercial
real estate. Quite frankly, there's something you want to call
it mark to market. There's no real market in this stuff.
Especially when these guys all go golfing together and they
(03:36):
all know one another. They can Yeah, bummy, you do
know what you know? Don't don't you know? Don't drop
the price on these things for a period of time.
Speaker 3 (03:45):
Let's wait.
Speaker 2 (03:46):
They're getting what they want right now. They're going to
be able to extend and pretend. A little bit longer
we're seeing interest rates come down, they might be they
might be able to again extend and pretend and you know,
renegotiate somebod these loans at a better rate, keeping them afloat.
It is not a place you want to dwell in.
(04:10):
With that being said, and again going back to twenty
twenty three, we talked about regional banks and the problems
and the crap that is on their books they took down.
They took down a few then and again Silicon Valley
Signature First Republic that there was a few that went
(04:32):
down again benefited from this was the biggest banks, the
JP Morgan's of the world. Why do you think Jamie's
coming ahead of cockroaches out there? Jamie's going to be
able to pick up some assets on the cheat. He's
going to the two big defail banks are going to
be you know, swooping in and taking you know, some
assets on the cheap. They're going to figure out who
(04:53):
they're going to assassinate and who they're going to take over.
Speaker 3 (04:55):
That's just how it is. I don't know who it's
going to be. Is there going to be Jeffries? Who knows?
You know.
Speaker 2 (05:01):
When the world is a washing crazy amounts of money,
you know, and all of these guys looking to get
their bonuses, they got to right loans.
Speaker 3 (05:16):
They have to write loans, and.
Speaker 2 (05:18):
The bigger the better, and they will find ways of
justifying and you know, coming up with all sorts of
nonsense to write loans that shouldn't happen. Again, It's amazing
to me you get to talk to small business owners
around the country. You may want a loan to expand
their store or whatever it may be.
Speaker 3 (05:35):
Good luck going to a bank. They're not interested in you.
Speaker 2 (05:37):
Too small, too small, You got to go bigger, go home.
That's all they're interested in. Again, this goes back to
part of the problem we have today with the too
big to fail banks. We don't have the smaller lenders
and community banks. What are you talking about. You got
all these regionals out there. Yeah, yeah, they've got to
make their numbers because again they're trying to meet with
(06:00):
the big boys.
Speaker 3 (06:01):
They're not interested in you. They're not.
Speaker 2 (06:08):
We've we've tried it at you know, at my firm
quite frankly, and yeah, we're able to do various things
when we make acquisitions, but we do it ourselves. Yes,
it's not even worth the bother to go to them,
you know, Like I said, it's easier in many respects
to to be somebody that is not credit worthy, that
(06:32):
doesn't have great books, but wants to borrow a ton
of money. Well, you think I don't speak to these bankers,
I do, Chris. You know, you gotta ask for more,
you gotta borrow.
Speaker 3 (06:47):
I don't know any more.
Speaker 2 (06:48):
I don't want more. And part of the problem that
we have today they're out there and again they just
got themselves a bit of a lifeline. Okay, ten year
going underneath four that's going to be helpful for the
extended pretend crowd. The reality of the situation is, Okay,
(07:12):
there is a ton of god awful paper out there.
I canna give you an example some of the bs they
try to push. Ah, what paper was this saying? I
was reading it about a week ago. They were talking
about our commercial commercial law real estate is picking up
in Manhattan.
Speaker 3 (07:29):
Ah, it's getting much of it, bitch improven.
Speaker 2 (07:32):
That's right, office office space, it's improven, and it's again
it's improved.
Speaker 3 (07:39):
There's no doubt.
Speaker 2 (07:40):
It's not nearly as bad as it was a couple
of years ago.
Speaker 3 (07:44):
However, Okay, look a little deeper.
Speaker 2 (07:49):
All of the the commercial real estates improving is all
brand new buildings, all brand new buildings either right around
Grand Central Station or Penn Station. People don't want to
they don't want to have to commute from Long Island
and Jersey. Okay, I have to deal with all that nonsense,
(08:12):
and then again, get on another subway and then take
another forty five minute subway ride somewhere else the city.
Speaker 3 (08:17):
Those days are going. People won't do it anymore.
Speaker 2 (08:21):
And they're building all of the brand new office space
right around Grand Central Station and Penn Station, and those
buildings are selling out. They're selling like hotcakes. Rest of
the city. Crickets, crickets. I guess you could take a
you know, a wrecking ball to most of the office
(08:43):
buildings in Manhattan. Nobody would notice. Nobody knows because they're empty.
Chrysler Building, oh empty hold office space, low suit. Nobody's
interested in this anymore.
Speaker 3 (08:59):
That is the reality. And that's just that sector.
Speaker 2 (09:03):
When you get into some of the other loans that
are out there, and we already talked about Tricolor, about
First Brands, all this other nonsense that's floating around out there.
Speaker 3 (09:13):
Lots of cockroaches.
Speaker 2 (09:16):
Watchdog on Wall Street dot com
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski your
sneaky cockroaches?
Speaker 2 (00:18):
You cockroaches again? I channel my inner Tony Montana. Yeah,
cockroaches everywhere. Jamie Diamond brought that up. I say, one cockroach.
There's gonna be more of them there. Gee, thanks Jamie.
Twenty twenty three. Let's go back in time, Dan, you
(00:40):
want to go back and listen to my shows, my
podcast back during the whole First Republic Silicon Valley Bank situation. Yeay,
cockroaches still around.
Speaker 3 (00:52):
They've never been dealt with.
Speaker 2 (00:54):
Well, lots of uh, lots of back and forth talking
about bad loans and private credit. Yeah, and I get questions,
how do I trade this? How do I do this?
You can't?
Speaker 3 (01:10):
Okay, you can't. I'm gonna take everybody back in time.
You go back to the.
Speaker 2 (01:19):
Great Financial Crisis. We knew it, we called it here
on the program. We warned everybody. People asked me, well,
did you trade it? Did you trade like like like?
Bury did like like all these guys did. No, no,
I didn't trade it. There was other people that knew
what was going on. Well what they did, quite frankly,
(01:43):
was extraordinary crafting products. And even there that they you know,
Bury almost got whacked in of himself because again, you
can go short something and you can be one hundred
and ten percent right, but the street can wait you out,
(02:03):
the street can weait you out. They can manipulate the numbers.
This is one of the things that a lot of
people don't understand when it comes to Wall Street, especially
when it comes to credit markets, which is when it
comes to bonds. Like people think about the equities market,
in the stock market, that's the most legit one out
there as far as price discovery is concerned. All of
(02:24):
this other stuff. It's not you'd understand something. Bond traders
do whatever the hell they want. They do whatever they want,
do they manipulate. It's a complete joke. We don't think
the same thing holds true for credit loans, private credit. Sure, Sure, eventually,
(02:46):
eventually things during the Great Recession spirals out of control,
but that.
Speaker 3 (02:50):
Was much much bigger.
Speaker 2 (02:52):
We're talking yeah, we're talking billions upon billions of dollars
in bad loans, bad private credit, auto loan stuff that
we reported here on the program. Lots of cockroaches, no
doubt about it. Is this something that's going to cause
a major disconnect in the overall economy to financial markets, No,
(03:15):
I can't trade it because they can extend, call, extend
and pretend. That's been what's been going on with commercial
real estate. Quite frankly, there's something you want to call
it mark to market. There's no real market in this stuff.
Especially when these guys all go golfing together and they
(03:36):
all know one another. They can Yeah, bummy, you do
know what you know? Don't don't you know? Don't drop
the price on these things for a period of time.
Speaker 3 (03:45):
Let's wait.
Speaker 2 (03:46):
They're getting what they want right now. They're going to
be able to extend and pretend. A little bit longer
we're seeing interest rates come down, they might be they
might be able to again extend and pretend and you know,
renegotiate somebod these loans at a better rate, keeping them afloat.
It is not a place you want to dwell in.
(04:10):
With that being said, and again going back to twenty
twenty three, we talked about regional banks and the problems
and the crap that is on their books they took down.
They took down a few then and again Silicon Valley
Signature First Republic that there was a few that went
(04:32):
down again benefited from this was the biggest banks, the
JP Morgan's of the world. Why do you think Jamie's
coming ahead of cockroaches out there? Jamie's going to be
able to pick up some assets on the cheat. He's
going to the two big defail banks are going to
be you know, swooping in and taking you know, some
assets on the cheap. They're going to figure out who
(04:53):
they're going to assassinate and who they're going to take over.
Speaker 3 (04:55):
That's just how it is. I don't know who it's
going to be. Is there going to be Jeffries? Who knows?
You know.
Speaker 2 (05:01):
When the world is a washing crazy amounts of money,
you know, and all of these guys looking to get
their bonuses, they got to right loans.
Speaker 3 (05:16):
They have to write loans, and.
Speaker 2 (05:18):
The bigger the better, and they will find ways of
justifying and you know, coming up with all sorts of
nonsense to write loans that shouldn't happen. Again, It's amazing
to me you get to talk to small business owners
around the country. You may want a loan to expand
their store or whatever it may be.
Speaker 3 (05:35):
Good luck going to a bank. They're not interested in you.
Speaker 2 (05:37):
Too small, too small, You got to go bigger, go home.
That's all they're interested in. Again, this goes back to
part of the problem we have today with the too
big to fail banks. We don't have the smaller lenders
and community banks. What are you talking about. You got
all these regionals out there. Yeah, yeah, they've got to
make their numbers because again they're trying to meet with
(06:00):
the big boys.
Speaker 3 (06:01):
They're not interested in you. They're not.
Speaker 2 (06:08):
We've we've tried it at you know, at my firm
quite frankly, and yeah, we're able to do various things
when we make acquisitions, but we do it ourselves. Yes,
it's not even worth the bother to go to them,
you know, Like I said, it's easier in many respects
to to be somebody that is not credit worthy, that
(06:32):
doesn't have great books, but wants to borrow a ton
of money. Well, you think I don't speak to these bankers,
I do, Chris. You know, you gotta ask for more,
you gotta borrow.
Speaker 3 (06:47):
I don't know any more.
Speaker 2 (06:48):
I don't want more. And part of the problem that
we have today they're out there and again they just
got themselves a bit of a lifeline. Okay, ten year
going underneath four that's going to be helpful for the
extended pretend crowd. The reality of the situation is, Okay,
(07:12):
there is a ton of god awful paper out there.
I canna give you an example some of the bs they
try to push. Ah, what paper was this saying? I
was reading it about a week ago. They were talking
about our commercial commercial law real estate is picking up
in Manhattan.
Speaker 3 (07:29):
Ah, it's getting much of it, bitch improven.
Speaker 2 (07:32):
That's right, office office space, it's improven, and it's again
it's improved.
Speaker 3 (07:39):
There's no doubt.
Speaker 2 (07:40):
It's not nearly as bad as it was a couple
of years ago.
Speaker 3 (07:44):
However, Okay, look a little deeper.
Speaker 2 (07:49):
All of the the commercial real estates improving is all
brand new buildings, all brand new buildings either right around
Grand Central Station or Penn Station. People don't want to
they don't want to have to commute from Long Island
and Jersey. Okay, I have to deal with all that nonsense,
(08:12):
and then again, get on another subway and then take
another forty five minute subway ride somewhere else the city.
Speaker 3 (08:17):
Those days are going. People won't do it anymore.
Speaker 2 (08:21):
And they're building all of the brand new office space
right around Grand Central Station and Penn Station, and those
buildings are selling out. They're selling like hotcakes. Rest of
the city. Crickets, crickets. I guess you could take a
you know, a wrecking ball to most of the office
(08:43):
buildings in Manhattan. Nobody would notice. Nobody knows because they're empty.
Chrysler Building, oh empty hold office space, low suit. Nobody's
interested in this anymore.
Speaker 3 (08:59):
That is the reality. And that's just that sector.
Speaker 2 (09:03):
When you get into some of the other loans that
are out there, and we already talked about Tricolor, about
First Brands, all this other nonsense that's floating around out there.
Speaker 3 (09:13):
Lots of cockroaches.
Speaker 2 (09:16):
Watchdog on Wall Street dot com
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