Friday, October 10, 2008
"Revulsion" and the Minsky Moment
The two hour drop of the Dow leading to the second largest decline in percentage terms in a single day ever looks like we have finally come to the end of the period of financial distress described by Minsky and Kindleberger that we have been in since August, 2007, the move to panic and crash, the drop off the cliff. Which brings to mind another old fashioned term (like "fictitious capital," brought up here recently by michael perelman). This would be "revulsion," also a term liked by Minsky (for his "moment") and Kindleberger, which happens at the worst point of the panic and crash stage.