The Fed’s quarterly z1 Flow of FUnds report is out, and its none too pretty:

Household net worth—the difference between the value of assets and liabilities—was an estimated
$56.5 trillion at the end of the third quarter of 2008, $2.8 trillion dollars less than in the preceding quarter.

Peter Boockvar notes that this is another record low in Owners Equity as a percentage of Household Real Estate at 44.7%, down from 46% in Q2, 50.9% in Q3 ’07. The recent peak was 59.6% in 2001.

The value of Household Real Estate fell $557b sequentially and $2.086 trillion y/o/y.

The key stat in the data I believe in light of the strain that the US consumer is under and its huge influence on GDP is that of household debt (home mortgages + consumer credit) as a percentage of disposable income. For Q3 it was 123% up from 122% in Q2 but down from 126% in Q1. It peaked at 127% in 2006 and is still well above its level of 83% in 1995.

>

Source:
Flow of Funds Accounts of the United States
Flows and Outstandings
Third Quarter 2008

http://www.federalreserve.gov/releases/z1/Current/z1.pdf

Category: Credit, Federal Reserve, Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

86 Responses to “Q3 Flow of Funds”

  1. gabrielbp says:

    ANECTDOTE

    Find below a little anecdote that sounds very interesting:

    1 year ago RBS paid $100bn for ABN Amro.
    For this amount it could now buy:
    Citibank $22.5bn
    Morgan Stanley $10.5bn
    Goldman Sachs $21bn
    Merrill Lynch $12.3bn
    Deutsche Bank $13bn
    Barclays $12.7bn
    And still have $8bn change……which you would be able to pick up GM, Ford, Chrysler and the Honda F1 Team.

  2. Bruce N Tennessee says:

    And for future ideas about the flow of funds:

    http://www.nasdaq.com/asp/EconodayFrame.asp

    RBC CASH Index..(Consumer Attitudes and Spending by Household)…

    Spending is feeling the chill of early winter….

  3. leftback says:

    gabrielbp: 1 year ago RBS paid $100bn for ABN Amro.

    right now you could buy the new RBS building in Stamford for about 50p…

  4. Mannwich says:

    Santa Rally, we hardly knew ye……..

  5. DL says:

    Looks like the Republicans in the Senate are finally throwing a small bone to the stock market bears.

  6. bernandoo says:

    We filled the gap at 880 and are probably going to close near the 30 DMA. Don’t count the rally out just yet.

  7. Mannwich says:

    Could it be the market is throwing a tantrum like it did prior to the ludicrous TARP program vote to force the Senate’s hand? Nothing like constantly putting a gun to our heads. Bailout, schmailout, the markets may rally on yet another one but it won’t last.

    When the market finally tanks on the final bailout and then rises in response to actual fundamentals, then maybe, just maybe we’ve hit THE bottom.

  8. mudpuppy says:

    It’s not fundamentals it’s fuzzymentals.

  9. bernandoo says:

    maybe bailouts are the new fundamentals.

  10. How can the Fed issue their own debt? I thought Treasury issued the debt? Does “B-52″ Ben expect Obama to ask him to resign?

  11. Mannwich says:

    Pretty soon we’ll be wrapping Christmas presents (re-gifted ones) using the greenback.

  12. DL says:

    Mannwich @ 3:33

    It’s inconceivable to me that the auto companies won’t get their bailout money. This is all just political theater. But it may provide an opportunity to cover some shorts before reloading in January.

  13. Estragon says:

    Calvin Jones – “How can the Fed issue their own debt?”

    They already do. It’s called currency.

  14. Estragon says:

    bernandoo – “maybe bailouts are the new fundamentals”

    Maybe?

  15. Mannwich says:

    @DL: Oh, I agree with you. This is all inane political theater. The bailout will happen. Some in the Senate just have to feign interest protecting in the “taxpayer” first (as if that horse isn’t already out of the barn) and then will cave, as usual.

    It is kind of amusing to see a castrated “W” administration in his final days trying to convince his once lapdog GOP brethren to support this bailout though.

    Rally will predictably ensue but I will be loading up in January on the short side.

  16. Mannwich says:

    @Estragon: LOL. So true indeed.

  17. wally says:

    This is just debt personally agreed to. In addition, we have household debt agreed to by our proxies in Congress. There will be a lot of future hours worked to pay for past misdeals, should people decide to put those hours in instead of to walk away from them.

  18. Bruce in Tn says:

    Mannwich:

    I found this happy news on the economy from a fellow Tennessean. He will even wish you a merry Christmas at the end. Don’t show it to Leftback, though…it pretty much sums up my thoughts, too. Merry Christmas.

    http://blip.tv/file/1528079

    Fred on the Economy

  19. Steve Barry says:

    My update as promised…Total credit as of 9/30 was 51.8 Trillion…GDP was 14.42 Trillion annualized…Total Credit per GDP inched up to 359% from 357%…it has basically stopped rising…now waiting for the inevitable plunge that will mean depression.

  20. DL says:

    Steve Barry @ 4:06

    Bernanke and Geithner will do their best to induce inflation rather than let the air out of the credit bubble too quickly.

  21. Mannwich says:

    @DL: I think you’re overestimating Bernanke’s and Geithner’s ability to control the markets with a magic wand, especially this time. They’re running out of ammo and if they do succeed at “inducing inflation”, then all that does is create a whole new set of problems (e.g. the backlash by a seething middle class could get truly ugly……it’s quiet now but they’d better be careful. People are slowly getting fed up.).

  22. leftback says:

    I trimmed my longs in gold and silver some more today and bought a small amount of QID. Trading small here because I didn’t like today’s market and can’t get a read on the move, so keeping cash on hand in case of a sell-off tomorrow. My core positions in GDX, COP and VLO have had a really good run.

    I expect to see a pull-back in commodities at some point before the sector rally resumes. I still hate retail, tech, mall REITs and financials. Oh yes, and Treasuries.

    Steve Barry, is there a word for a deep recession with added inflation due to currency devaluation?

  23. DL says:

    Mannwich @ 4:20

    Of course, they cannot “control” the markets. But what they CAN do is to take one huge (economic) problem, and trade it in for another huge problem. In the process, I think that there is actually some SHORT TERM political benefit.

  24. Bruce in Tn says:

    Leftback:

    Glad you got to see Corky’s. I don’t think we are going to see inflation anytime soon. I agree it is possible at some future time, but there is just too much worldwide weakness to cause dollars to chase goods. Even the economists at NASDAQ, who do this for a living, have changed their phraseology to words like severe and frightening when discussing today’s job numbers. This temporally uniform global slowdown looks unstoppable to me here. Roubini is going to turn out to be too bullish, it now appears.

    http://www.nasdaq.com/asp/EconodayFrame.asp

    Jobless Claims

  25. leftback says:

    Bruce: I agree that the jobs numbers are frightening, and this is of course what is driving all of the reflationary maneuvers that are underway.

    You are correct that strong inflation is not immediately imminent. But the markets are a forward-looking mechanism. Gold and silver may be telling us that Bernanke’s printing press has been insufficiently sterilized and that inflation may be with us again sooner than we think (apart from gasoline prices, inflation has barely left our everyday lives). Don’t wait too long to get on the commodity bus or it may be a long way down the road.

    DL is right, they will do whatever is possible to risk inflation rather than risk a prolonged deflation.

  26. grumpyoldvet says:

    You’ll know we’re in deep shit when the nail salons start closing up in droves. Ain’t happened here in NYC as yet.

  27. leftback says:

    @ grumpy: what will all those nice nail salon girls do??
    Perhaps “dating for food” will reappear in NYC…

  28. Bruce in Tn says:

    Lefty:

    All my adult life I have seen greater or lesser forms of inflation in my day to day life, and I made reasonable decisions about business and investment, etc. based on that constant inflationary environment.

    I have never lived through a deflationary time. So, I may not be exactly on target today…but this just feels different.

    I do know that I am keeping my investments short, as I’ve blogged before, on the chance that your theory is correct.

  29. DL says:

    Bruce @ 5:03

    I think it’s important to draw a distinction between (a) “inflation” as measured by the CPI, and (b) commodity prices such as oil, wheat, sugar, copper, etc.

    As for the CPI, it could easily be another three years before we see anything there.

    I just think though that within the next six months (maybe less), many of the commodities will have hit bottom and will begin moving up.

  30. grumpyoldvet says:

    leftback…ya know that’s an interesting question. Hookers are feeling the pinch (:-) )….as their income will probably begin to ebb. Perhaps they can join the construction gangs the Obama plan is going to need to rebuild all that infrastructure/ Ya know construction people need to have their nails cleaned and if not manicure at least smoothed. So maybe they won’t begin to close up.

    Hey Kudlow. et al a new investment opportunity ya may wish to inform your viewers about.

  31. DL says:

    grumpyoldvet @ 5:20

    No doubt the hookers will benefit from Obama’s “stimulus” package.

    (Probably not a good selling point for him, though).

  32. harold hecuba says:

    take a look at the most grotesque repulsive irresponsible period created by the fed. go to calcualted risk’s blog spot and witness the graph of net worth to gdp. 50 years of stability and the bubble years came about. when i think of the destruction created by the mad men during this period and yes consumers social mood etc are also to blame it makes me wanna puke

  33. Mannwich says:

    BofA to lay off 30,000-35,000 people. Things are looking up.

  34. DP says:

    @grumpyoldvet : Hope you’re right, maybe they’ll start offering some “two for the price of one” deals. Oink.

    @leftback: Interesting. Sold my GDX today too, and lightened up on AUY. Still holding fairly oversize in KOL average 11.5

    Looks like another “buy QID in 60s sell in the 80s” trip is coming, unless there’s a vote on the bailout tonight. Then again we seem to have established a “Friday sell off” tradition, sometimes with a violent bounce back, sometimes not.

  35. Mannwich says:

    The hits just keep on coming….

    This guy can join our boy Tom Petters here in Minny who is facing 20 years+ for a giant multi-billion dollar Ponzi Scheme of his own…..will people ever learn? We’re getting to the point where one is not to be trusted if he/she wears a suit and tie….

    MARKET ALERT
    from The Wall Street Journal

    Dec. 11, 2008

    Bernard L. Madoff, the 70-year-old founder of Bernard L. Madoff Investment Securities and a fixture of the Wall Street trading world for decades, was arrested by FBI agents and charged with criminal securities fraud by federal prosecutors in Manhattan. Prosecutors allege that Madoff told senior employees that his business was “a giant Ponzi scheme” involving tens of billions of dollars. The extent of investor losses, though, wasn’t immediately clear.

    http://online.wsj.com/article/SB122903010173099377.html?mod=djemalertMARKET

  36. Winston Munn says:

    Mannwich,

    No problem as those 35K Bank of A workers can just go get a job at KB Toy….founded 1922….

    “The nations number 2 toy retailer, KB stores has declared bankruptcy and will close down it’s 277 stores citing a “sudden” drop in sales. The companies 11,000 employees will be left looking for work.

    KB Stores was founded in 1922. The store began as a candy wholesaler and later grew to become one of the largest toy store retailers in the world. KB was able to make it through the first great depression but couldn’t manage to survive the current collapse”

    Well, maybe not.

  37. Mannwich says:

    @WM: Well, at those workers all have plenty of savings and easy credit they can live off of while they “retrain themselves” so they can land a job that paid them half of what they were making before. Viva la creative destruction!

    Um, never mind.

  38. DL says:

    Mannwich @ 5:45

    When we start to see these in large numbers, it probably means that the next bull market is starting.

  39. Mannwich says:

    @DL: Yet another meme that we all thought was “conventional wisdom” until it’s proven later to be false. This period of time bearslittle resemblance to any other period we’ve lived through. Just keep that in mind when comparing those apples to these oranges.

  40. DL says:

    Mannwich @ 6:05

    Maybe so.

    But I certainly don’t think that the next bull market is starting at this point.

  41. jason says:

    Re: Madoff

    I thought it was all a Ponzi scheme and that I was just late to the game.

  42. Gene says:

    Golly gee, who would’a thought house and land prices would go down? Say it ain’t so, Joe.

  43. Steve Barry says:

    I’m thinking out loud here and welcome comments to my thoughts. Total Credit, released today, is 51.8 trillion…GDP is 14.42 trillion, for the 359%. We need to be around 170% IMO, so we have 28 Trillion in excess debt…if GDP drops 10%, it is 30 trillion. Let’s use 30 trillion.

    How do we make 30 trillion in debt disappear? The only way to reduce debt is to pay it off (bloody unlikely) or default on it. This will be catastrophic of course. The only thing they could try is to pump the economy with liquidity (TARP, bailouts, capital infusions) and keep the debt on the Fed’s balance sheet. It almost doesn’t matter where the liquidity winds up as long as it is in the system (it would be nice though if the little guy got some). This will in effect try to engineer a “soft crash”…extend the pain out years instead of taking the depression now. Major fly in the ointment: it took 20 years for this to get out of hand and unless we drag the downside out at least 10 years, it will feel very painful anyway.

  44. Steve Barry says:

    Am I to understand, Madoff committed a $50 Billion fraud? That he was the 23rd largest Nasdaq MM and 50% of clients were hedge funds?

    This is a major deal folks…Barry, you need to chime in on this baby. Is this the non-linear event I expected?

  45. Mannwich says:

    @Steve Barry: Let the games begin. Should be only the beginning in the perp walk parade of horribles.

  46. Mannwich says:

    @Steve Barry: But I’m sure if there wasn’t so much government regulation, this crime would have never occurred. It’s patently obvious that this good man’s virtuousness just wasn’t allowed to flourish unfettered utilizing Adam Smith’s “Invisible Hand”.

  47. JustinTheSkeptic says:

    Gold and Silver are just telling us that things are really wtf!

  48. Mannwich says:

    If this is true, this is a big story…..

    One of the employees stated that Mr. Madoff “wasn’t sure he would be able to hold it together” if they continued to discuss the issue at the office, the complaint says. At the apartment, Mr. Madoff confessed that his business was a fraud and that he was “finished.” He said he had “absolutely nothing,” that “it’s all just one big lie,” and that it was “basically, a giant Ponzi scheme.” The employees understood that to mean he had “for years been paying returns to investors out of principal received from other, different investors.” He told them the firm was insolvent.

    Why are we spending trillions to save this rotten system?

  49. Steve Barry says:

    The most amazing thing to me about Madoff..it seems he had such major clients, he could probably, with a little effort, actually turned his Ponzi scheme into a solid company.

  50. Steve Barry says:

    Kind of bad timing…all this bad news, with astoundingly low short interest, put call at year lows, NYSE bulls back to 42%, blogger poll at very bullish levels…what did I leave out?

  51. mitchn says:

    @ leftback 4:22

    > is there a word for a deep recession with added inflation due to currency devaluation?

    Revolution. Anyone know a good play on pikes?

  52. Mannwich says:

    Hate to belabor the point but here’s a quote from the Times…..

    Another regulator, Andrew M. Calamari, the associate director of enforcement in the New York Regional S.E.C. Office, said the case involved “a stunning fraud that appears to be of epic proportions.”

    Yikes.

  53. DL says:

    Steve Barry @ 7:37

    “it took 20 years for this to get out of hand and unless we drag the downside out at least 10 years, it will feel very painful anyway”.

    It looks to me like the Japanese have dragged it out for 20 years.

    (Their government debt-to-GDP ratio is now about 2:1).

    While their economy has barely grown at all in the last 20 years, I don’t think that there was any one single year during which the Japanese economy was really terrible. I’m pretty sure that throughout the 1990’s, their unemployment rate was never particularly high, at least by U.S. standards.

  54. Mannwich says:

    @DL: Sure, it was probably fine for the elite for the most part, but do you know what happened to their workforce? Most are now lowly paid temporary workers who are now being let go again. I think we’re reaching a tipping point for U.S. workers in this country.

  55. DL says:

    Mannwich @ 9:02

    You may be right about the quality of the jobs there. Personally, I don’t want to go 20 years with a GDP growth rate of 1% per year.

    For one thing, we need economic growth in order to pay for social security and medicare.

  56. DL says:

    Steve Barry @ 8:16

    I’d be a little happier (as a bear) if the 21 day MA on $CPCE were a bit lower.

    (I realize, however, that one can’t have everything).

  57. constantnormal says:

    @DL

    I suspect that we will not manage anything remotely as tidy as the Japanese glide path — our citizenry is more likely to raise their voices, spook the pols, and voila! multiple crashes!

    We may get down to manageable debt levels a lot faster than the Japanese. My guess is that by 2014-2016, all the hot air will have escaped from the system, admittedly with the possibility of a Treasury default along the way …

    Not that anyone will prefer the route we will take, tho’ …

  58. DL says:

    DP @ 10:04

    It’s not just the ultrashort funds. Take QLD, for example. The dividend payout on 12/20/07 was $ 5.09 per share. A pretty hefty amount, whether you’re long or short.

  59. Andy Tabbo says:

    This is some really crappy price action after hours in the futures. The market has blown through my most bullish support points. With 838 getting taken out right now, I will have to count out the 741 to 919 move as a completed ABC move. The B wave held the 50% exactly and the C wave achieved the minimum target of .618A=C, although I must admit the C wave was very ‘short’ in duration relative to the A leg.

    So it goes….

    We seem to be headed for a full correction of the entire ABC that completed at 919. The key support points on the CASH SP500 are:

    830 (50%) – just hit this level on the futures.
    908 (61.8%)
    793 (70.7%)
    779 (78.62%)

    I have no idea which one of these points are going to hold. I will need more price action to determine the most likely support point. Bigger picture though, I strongly believe the move from 741 – 919 was only the initial A leg up and that we will get an accompanying C leg up higher at some point, which will be your EXIT/GET SHORT level.

    I don’t believe we will set a new low on this down leg.

    - AT

  60. DP says:

    Thanks DL. Do they put our a release with planned dividend ahead of time, or it just happens and we can assume it will probably be the 20th? Wonder what happens to QID if Nas is down big the day before but lots of people want to sell QID because of the dividend.

    @SB: I know if I had any money in a hedge fund at this point and had been content to just let it ride, I’d probably be looking to get out now. Could cause another wave of redemptions, maybe your non-linear event.

  61. Steve Barry says:

    DP:

    The non-linear event could be caused by anything…it will be the equity market suddenly seeing what the bond market is seeing…total risk aversion.

    I’m a simple man…I just want my prediction from 1/2/08 to come true…that this will be the worst year in S&P history. How do you top that? Can anyone else document calling it? If IT happens, I then just want some nugget of a hat tip from the blog author.

  62. karen says:

    AT, thanks for your price points… institutions may view this as another buying op… time/price/volume will tell.

    i admit to being worn out by the whole crap shoot at this point.

  63. texasradio says:

    @Leftback
    It was your posts that got me sold on SRS. Alas, I took the deal today due to lingering government interference fears. Not that I mind a rigged game but the probabilities associated with an opponent that can impose its randomness upon equity markets are unfavorable, I think. Better to send those SRS profits to the gold futures margin bin. The government interventions in that market, those I can deal with…

    But that SRS looks to be on fire tomorrow. Damn. (Did somebody say xmas rally? Indeed it is, just depends on which side of the trade you are on.)

    @SB
    I agree, it’s black swan season.

  64. DL says:

    DP @ 10:56

    “Do they put out a release with planned dividend ahead of time, or it just happens and we can assume it will probably be the 20th?”

    I spent several minutes Tuesday night searching for the answer to that question (to no avail). Yesterday, I covered my short in QLD, because I don’t want to have to pay that dividend. I would assume that it applies to people holding the stock on December 20th, but who knows? They may try to snag people a few days before that.

    ^^^^^^^^^^^^

    Regarding your comment about hedge funds…. it seems that they like to hold on to your money for a while after you’ve requested the redemption.

    Front-running, anyone?

  65. DP says:

    @AT: If the futures blow through one of your support levels, but recover before open, does it count?

  66. Andy Tabbo says:

    DP:

    Not in my book. The SP futures is a HUGE market with plenty of market participants, so the Tale it tells is accurate. Anyone know what exactly is causing this puke out, or is it a variety of factors:

    - Auto bailout not going down on cue
    - Madoff leaving a 50 bone hole on the balance sheet of some investors books?
    - Jamie Dimon telling the audience to short his stock and the market?
    - BAC whacking 35K?

    - AT

  67. DL says:

    Andy Tabbo @ 11:14

    Probably just the auto bailout. Just some political theater that the politicians are giving us. GM will get its money; the Republicans in the Senate just want their pound of flesh first.

  68. karen says:

    Andy, I think you hit those 4 nails squarely on their heads.

  69. here’s twice, karen has the read..

    I’ll ask again, though, for my own sense: “Who has bets the U$D sees 2010?”

    or, differently, people betting that this will be ‘a soft Crash’ are going to wish they had Air Bags, and a Four-Point Harness

  70. DP says:

    The U.S. Senate failed on Thursday night to reach a last-ditch compromise to bail out automakers, effectively killing any chance of congressional action this year.

    Republican-brokered talks faltered, leaving the chamber at a dead end on an approach for extending $14 billion in loans to avert a threatened collapse of one or more automakers, Senate Majority Leader Harry Reid said in remarks on the floor.

    “It’s over with,” Reid said.

    ….

    A procedural vote is scheduled Thursday night but it is expected to be little more than a formality.

    “We just don’t have the votes,” Reid said. “I dread looking at Wall Street in the morning.”

  71. DL says:

    Nice to see that there are at least a few members of Congress who have some spine.

  72. karen says:

    Andy, one nail you missed: full moon tomorrow.

  73. ButtoMcFarty says:

    Will the revolution be televised?

    Am I the only that believes that there will be blood in the streets before this is done?

  74. ButtoMcFarty says:

    Literal blood…..not pansy figurative stuff.

  75. Andy Tabbo says:

    @karen. Ah yes. The full moon. Forgot that one.

    Should have seen this collapse coming. CNBC was interview one of the “floor brokers” midday…and he basically said: “How much more do you want to see that you should be in the market. C’mon in…the waters warm. We’re shaking off bad news and the market heads higher or move sideways…you need to be in this market.”

    SOLD TO YOU.

    What an arrogant douche. Whenever I find myself agreeing with the on air contributors they have, I should go for a long walk and reevaluate the situation…these floor brokers don’t know shit.

    - AT

  76. Andy Tabbo says:

    I didn’t mean to disparage all the floor brokers that they throw in front of the camera. Art Cashin is sort of OK. He’s salty and skeptical, which I like.

  77. Andy Tabbo says:

    Sorry for the random semi-off topic stuff here,

    but the Yen looks to be really blowing off here overnight, somewhat predictably. What’s interesting though is that 113-114 (88.5-87.7) is a MAJOR, multi year, wave count objective for the Yen. In my book, we just achieve something really special there and the market got hit hard from 113.50….should be an interesting day tomorrow….

    - AT

  78. DP says:

    Amazing how quickly things change. They’re replaying Fast Money on the XM CNBC channel and it’s so out of date it sounds like it could have been a show from 3 months ago, not 5pm.

    I wouldn’t be surprised if Bush announces tomorrow they’re giving the automakers the money out of TARP and we close up 300. (Not a prediction, just nothing is a surprise anymore).

  79. DL says:

    DP @ 12:25

    Yeah, that Marxist George Bush just might do that.

  80. DL says:

    Andy Tabbo @ 11:56

    Yeah, USD/JPY @ 79.8 on 4/1/95

    (Get some sleep).

  81. Andy Tabbo says:

    @DL

    Ha. I can’t sleep with this kind of action overnight……

    Indeed, I have the chart for the Yen for the last few decades and we hit very close to the 78.62% retracement of that 1995 high (or low), a VERY important level for wavers…. We also achieved various other wave count objectives in the same area.

    In my opinion, the Yen and the 10 yr bond are the most important markets to observe to get a feel for global asset trends. I’ve got a couple of MAJOR resistance objectives on the 10 yr bond as well, just overhead. It’s going to be a GREAT day tomorrow!

    If you’re a trader…..

    - AT

  82. DP says:

    @AT: Sleep doesn’t seem too likely here either right now. Think I’ll go watch a movie, that always works.

    Where can I learn more about the methodologies you’re using? Is is pure Elliot Wave, or a variation of it?

  83. Steve Barry says:

    Are there other Madoff’s out there? Unregulated hedge funds that a spate of redemptions will obliterate?

  84. Steve Barry says:

    Madoff managed 17 Billion…gee, that could have bailed out the big 3 right there.

  85. SB,

    re: Are there other Madoff’s out there? Unregulated hedge funds that a spate of redemptions will obliterate?

    wouldn’t that go a long way toward explaining what ‘everybody’ is saying about ‘counterparty’-Risk?

    IOW, “Hey, we don’t know Who’s going to be here Tomorrow, or if we do, we don’t know if their ‘counterparty’ will…” (?)