On today’s show we’re talking about a different form of counter party risk. When we speak about counter party risk, we are usually having a discussion about the balance sheet. One person’s asset is another person’s liability. The quality of the asset is strictly linked to the ability to service the liability.
But there is a second form of counter party risk that is not often talked about in the same terms. This form of counter party risk applies to the income statement. One person’s income is another person’s expense. If one party can’t afford to pay the expenses, then then the second party’s income is at risk.
This leads to the question of which assets have the greatest income risk in this stagflation environment. On today’s show I’m going out on a limb to talk about three different asset types that I believe are most at risk in the current market conditions.
Host: Victor Menasce