Over the weekend, DB's credit strategist Aleksandar Kocic discussed what Minsky Dynamics for the "New Normal" look like based on a matrix that charted the various progressions of Leverage vs Volatility, with four possible end states. However, since that graphic explanation proved too problematic for some, another Deutsche macro analyst, Alan Ruskin, released a far simpler representation of the current (and historical) Minsky cycle, which compartmentalizes the world's various assets in their 7 discrete states along the Minsky cycle (as defined in Charles Kindelberger's ‘Manias, Panics and Crashes – A History of Financial Crises’). These start with the 1) macro shock ‘displacement’, move to 2) ‘healthy expansion’, to 3) ‘leveraged driven gains’, to 4) ‘euphoria’, 5) ‘insider profit-taking’, 6) ‘liquidation and panic’ and onward and downward to 7) ‘revulsion and discredit.’Zero Hedge
Where are we now?
Minsky Cycle 2017: Where Are We Now
Tyler Durden
No comments:
Post a Comment