When JPMorgan Chase’s Jamie Dimon talked about cockroaches last week, he hit a raw nerve within the increasingly complex global financial system.

The reference came after the Wall Street banking giant disclosed a $US170 million ($261 million) charge flowing from the bankruptcy of US sub-prime auto lender Tricolor.

“My antenna goes up when things like that happen,” Dimon said. “And I probably shouldn’t say this, but when you see one cockroach, there are probably more.”

America’s most influential banker sent markets on edge with his “cockroach” warning.Credit: Bloomberg

After the $US10 billion-plus collapse of a US autoparts group First Brands, the Tricolor failure and losses within two US regional banks that claim to have been defrauded, it isn’t surprising that there is increased nervousness about the state of the financial system, or that Dimon’s comments sparked new volatility in US financial markets last week.

Before Donald Trump’s comments on Friday that his 100 per cent tariff on imports from China wasn’t sustainable, there was a sell-off occurring in the US sharemarket, and bond yields were sliding as investors scrambled for safety.

The disparate nature of the forces moving markets last week highlight their fragility.

Whether it’s Trump’s tariffs, or concerns about the sustainability of the artificial intelligence-buoyed sharemarket bullishness, or fears that a sudden spate of messy corporate failures betrays a larger problem, investors have become evermore sensitive to any development.

History suggests that when too much money is lent to companies with poor creditworthiness, or too much money is invested too quickly in particular sectors,........

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