So here's a fun metaphor for your Friday: private credit markets are apparently full of bugs. Not the software kind, but the creepy-crawly kind that financial experts love to talk about when things get shaky.

Mohamed El-Erian, chief economic adviser at Allianz, is the latest to point out that the cracks in private credit are getting wider. He says the signs we're seeing now mirror JPMorgan Chase (JPM) CEO Jamie Dimon's earlier warning about 'cockroaches'—you know, the idea that if you spot one sign of trouble, there are probably more hiding in the walls. According to El-Erian, more 'bugs' are now in plain sight.

The Termite Question

El-Erian took to social media to spell it out. This week's private credit news, he wrote, "echoes Jamie Dimon's recent warning about 'cockroaches'—the idea that early signs of excesses are likely to be followed by others."

He listed the specific 'bugs' now emerging: "valuation gaps and liquidity strains to poor underwriting and fraud." Then he sharpened the concern with a follow-up question that's a bit more alarming: "The big question for markets and the real economy is whether we're just dealing with cockroaches… or are these termites posing systemic risks?"

Think about it. A cockroach is gross, but you can deal with it. Termites? They eat your house from the inside out. El-Erian said he suspects it isn't purely a systemic 'termite' issue, but he urged investors to watch closely how private credit interacts with other risks—including what he called "elements of an AI bubble" and "vulnerabilities in certain segments of the global bond market." It's the financial version of checking how the plumbing connects to the electrical wiring.

Blue Owl Becomes the Poster Child

If you're looking for a face to put on this concern, Blue Owl Capital (OWL) is currently it. The stock is down over 34% year-to-date and has fallen nearly 50% over the past year. That's the kind of performance that gets people's attention.

Back in February, Blue Owl announced it would liquidate $1.4 billion in assets to return capital to investors who wanted out. CEO Craig Packer called it a "strategic transaction," which is corporate-speak for 'we're selling stuff because we need to.' When a major player starts selling assets at scale, it's rarely because everything is going perfectly.

The Cockroach Debate Gets Personal

The whole 'cockroach' analogy started with Dimon, who likened credit bankruptcies to spotting that first insect—if you see one, more are probably lurking nearby. El-Erian echoed this earlier in a TV interview, putting it simply: "Cockroaches don't come in ones and twos."

Not everyone is buying the bug spray. Blue Owl's co-CEO, Marc Lipschultz, pushed back hard. Speaking at an investment summit, he quipped: "There might be a lot more cockroaches at JPMorgan." He called the broad concern about private credit "an odd kind of fear-mongering." It's the financial equivalent of 'I know you are, but what am I?'

This debate wasn't sparked in a vacuum. It was lit by the recent bankruptcies of First Brands Group and Tricolor Holdings—two events that rattled investors and sent regional bank stocks tumbling. When companies that borrowed in the private credit market start failing, lenders start looking very closely at their own portfolios.

Cracks Are Showing Elsewhere

The issues aren't confined to Blue Owl. BlackRock (BLK) reportedly slashed the value of a private loan it made to a company called Infinite Commerce from 100 cents on the dollar to zero in just three months. That's a par-to-zero swing that exposes the sometimes-massive lag between what assets are reported to be worth and how they're actually performing.

Other giants like Apollo Global Management (APO) and KKR & Co. (KKR) have also faced monthly losses as their software-heavy portfolios come under increased scrutiny. When the tide goes out, you see who's been swimming without trunks.

Not every report is sounding the alarm bells at full volume. New York Life Investments, in a February report, said the sector remains prone to 'headline risk'—meaning bad news can spook people—but maintained a generally constructive outlook. Their advice? Prioritize selectivity, strong underwriting, and disciplined exposure. In other words: be careful out there.

The bottom line is this: El-Erian and others are telling investors to keep an eye on the private credit kitchen. You might just be seeing a few bugs scurry across the floor. Or you might have termites in the foundation. The smart move is to figure out which it is before the whole structure gets wobbly.