This podcast episode examines the concept of systemic risk in the commodities sector, with a focus on exchange risk and clearing house failure. It discusses the implications of exchange failures on market participants and the broader financial system, as well as the catastrophic impact of clearing house failure. The episode also explores the risks associated with margining mechanisms, concentration risk in the commodities sector, potential disruptions in commodity markets, and the potential for commodity shocks to lead to economic and financial instability. The speakers highlight the importance of preparing for these events and discuss potential policy solutions and regulatory changes. Ultimately, they conclude that the clearing mechanism is too big to fail, and moral hazard is unavoidable.