Favor Liquidity over Leverage to Keep Mr. Minsky at Bay – Better Business Basics Bulletin
It should come as no surprise that you have not heard of Hyman Minsky. This economist was an eternal pessimist, drumming up all kinds of reasons for markets to crash. Business and stock investment revolve around optimistic forecasts, so the Minsky Moment, which is a label for a liquidity crisis, is not something people like to discuss. Greed is the stark reason behind every Minsky Moment or liquidity crisis. The term is used for the economy as a whole, but it can apply to any corporation or individual stock investor. You can forget about the macro situation, which has threatened…