Investors should prepare for months of market readjustments due to the imminent threat of a “Minsky Moment,” said a top economist.
The “Minsky moment” is named after economist Hyman Minsky’s description of a precipitous drop in asset prices after a build-up of debt.
Ludovic Subran, the chief economist at Allianz, formerly worked at the World Bank and France’s finance ministry.
He stated that a sudden “financial accident” could lead to a global economic disaster. “We have all the ingredients of a so-called Minsky moment,” Subran told Bloomberg Television on May 8.
“You see that everywhere. These liquidity pools or liquidity crunches are starting to be visible.”…