JPMorgan Sees Increasing Chances of ‘Minsky Moment’
- Strategist says debt-fueled market meltdown is possible
- Investors should sell into relief bounces in stocks, he says
Source: Bloomberg
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Bank failures, market turmoil and ongoing economic uncertainty as central banks battle high inflation have increased the chances of a “Minsky moment,” according to JPMorgan Chase & Co.’s Marko Kolanovic.
The term, named for the late American economist Hyman Minsky, refers to the end of an economic boom that has encouraged investors to take on so much risk that lending exceeds what borrowers can repay. At that point, any destabilizing event may force investors to sell assets for cash to repay their loans, sparking a market meltdown.