Written by Cormac Nevin
The title of this piece refers to an old saying in financial markets, often attributed to Warren Buffett, but employed last week by the CEO of JPMorgan Chase when discussing a string of corporate bankruptcies that rattled credit markets.
The bankruptcies that Jamie Dimon said had “got his antenna up” included First Brands Group – a U.S. auto-parts maker that filed for bankruptcy protection in late September; Tricolor Holdings – a U.S. sub-prime auto-lender and dealership group that entered liquidation in September; and Zions Bancorporation – a U.S. regional bank that announced a US$50 million loan write-off tied to two borrowers who, it said, misrepresented information and pledged collateral improperly.
The problem is simple enough: money has become expensive again. Central banks have been trying to keep policy “restrictive” to ensure inflation stays buried, but that means companies rolling over debt issued during the zero-rate years are now facing vastly higher costs. A business that borrowed at 3% in 2021 might now be staring at 8% or more. That’s manageable if revenues are growing – but many firms are seeing demand soften as consumers tighten their belts and government support fades.
For now, equity markets remain remarkably calm, with the MSCI All Country World Index up +0.5% last week. However, at the margin, these developments make us cautious about the lower-quality end of credit markets. The explosive growth of private credit and private equity activity in these areas has made them substantially more opaque, and the lack of frequent market-based pricing means risks can accumulate before they become widely apparent.
We remain biased towards high-quality sovereign fixed-income assets at this juncture and only employ highly specialised active managers for the modest amount of credit exposure we currently bear.
All performance figures are stated in Sterling terms, unless otherwise specified.
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The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 20th October 2025.
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