Time for a Minsky Moment?

Debt-laden markets may find a ‘Minsky’ moment is just around the corner

Many of the ingredients seem to be there for another Minsky moment, named after the US economist Hyman Minsky – the point where markets and economies, overwhelmed by debt, suddenly collapse.

Minsky’s abiding economic insight is the idea that stability in financial markets breeds instability. 

The longer things remain settled and predictable, the more oblivious to risk financial markets become, until eventually the whole edifice comes tumbling down.

The absence of a more significant economic correction has left financial markets badly exposed, with stretched valuations – particularly in tech related stocks – and narrowing spreads that pay scant regard for underlying credit risks.

Lots of households, businesses and property developers were banking on a steep fall in interest rates to dig them out of a hole.

This now looks likely to happen more slowly than anticipated. 

Many will struggle to refinance themselves on reasonable terms.

Jeremy Warner Telegraph 16 April 2024


Markets are facing a potential ‘Minsky moment’ collapse, strategist says


A “Minsky moment,” named after economist Hyman Minsky, refers to a sudden market collapse following an unsustainable bull run


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