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’It’s the balance of payments, stupid
Just in case the point has not been hammered home over the last few years, or even the last few days, here’s a chart showing how quickly and dramatically the external debt imbalances got out of hand in the eurozone:
A Minsky moment in the eurozone?
Named after the economist Hyman Minsky, the phrase describes a situation where investors who have borrowed too much are forced to sell even good assets to pay back their loans.
– The Guardian, 2007
The great de-leveraging
Or as Matt King at Citi put it in his latest presentation, “Payback Time: The Coming Decade of Deleveraging”. In short, we’ve borrowed much too much, and the public sector can’t substantially reduce its debt without a corresponding increase in borrowing in the private sector,
Minsky recast: why 2007 was different
Our favourite economist is back under discussion. As chaos hit in August 2007, economists, analysts and the media looked to the ideas of Hyman Minsky to help make sense of the seizures in credit markets.
Magnus, Minsky and shifts of position
Naked Capitalism has picked up on what seems to be the week’s trend: reversing position. An odd sign of the times, or perhaps specifically, of financial stress, Yves Smith says:
On Friday, we have Citigroup,
China’s Lewisian turning point
Is this the new Minsky moment? Economists and commentators grasped at the theories of Hyman Minsky in explaining the summer’s credit crisis. He who argued that stability breeds instability – as stable markets induce people to take excessive risk and overborrow in the final stages of a credit bubble.
Economist Idol – Minsky’s new found fame
The tumultuous markets over the past three weeks have caused a good deal of agony and somewhat less ecstasy for investors around the globe. But as the ructions have divided banks, funds and punters into winners and losers,