Marshall Auerback — Will The NASDAQ Sell-Off Create Contagion For The Real Economy?

About more than the equities market.

The passage of time is everything. In essence it is the stability begets instability theme of Hy Minsky, but of a magnitude he never imagined.

I think it may turn out to be the most essential dynamic of our time in history. The question now is whether the environment will foster ever more complacency and ever lower risk perceptions.

It appears that this is happening. I think we are far along. The longer we go on this path, the harder it is to have a big washout. Until the market gets so extended and the debts rise so much that it all becomes too unstable. Then of course the crash must occur. I suspect we are two thirds of the way down this road and far enough along that we go the whole way.

Macrobits

Will The NASDAQ Sell-Off Create Contagion For The Real Economy?
Marshall Auerback