The specter of 2023’s regional banking crisis looms large again. The September bankruptcy of First Brands Group, an auto parts giant with up to $50 billion in liabilities, has exposed hidden cracks in private credit markets, rattling regional banks. With $1 trillion in commercial real estate loans looming and fears of more “cockroaches” (undisclosed bad loans) lurking, investors are on edge.
JPMorgan Chase (NYSE:JPM) CEO Jamie Dimon said, “When you see one cockroach, there’s probably more. Everyone should be forewarned on this one.”
For risk-tolerant investors eyeing a speculative play, inverse and ultra-short exchange-traded funds (ETFs) offer a way to profit from further declines — but only in small doses.
For those investors who can stomach volatility, these two ETFs are poised to capitalize if regional banks falter, though they come with strict risk caveats.
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