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On today\\u2019s show we are talking about signs of stress in the construction industry.\\xa0

It\\u2019s no secret that many developers have put projects on hold as a result of higher interest rates.\\xa0

When we talk about counter party risk, that term conjures up an image for the GFC that started in 2008. This is the result of an asset being held by one party constituting a liability for another party. If the liability can\\u2019t be met, then the asset on the books may not be properly valued and may need to be written down. We saw the cascade of dominos across the entire banking system. The Federal Reserve recognized the linkages between different counterparties and has attempted to alter the structure of the banking system by encouraging banks to borrow from the Fed, or by putting excess reserves on deposit with the Fed. That way if the Fed is the counterparty in most cases, the systemic risk to the banking system would be reduced. Sounds good in theory.\\xa0

On today\\u2019s show we are going to look at another form of counterparty risk that is rarely considered. It was brought to our attention in the past few days. Our own due diligence processes are being strengthened as a result of what we have learned.\\xa0

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Host: Victor Menasce

email: podcast@victorjm.com