Last week People's Bank of China Governor Zhou Xiaochuan warned that China faced a "Minsky moment"
If you are keeping track of all the times China has faced a Minsky moment, be sure to add this to the list. I've lost count of the number of times I've heard this, I guess I should have kept a better list. My bad.
The thing this time I suppose its coming from a source that might be worth paying attention to (Zhou) and not some fruit cake on the internet.
Anyway, I'm bringing it up now as I see some bank client notes are paying it attention, probably because the US stock indices have closed in the red today and maybe we need a neat little story to make us all feel better (there is a strong demand for neat little stories to explain every market wiggle).
If you want more on Zhou and Minsky, Reuters have this (as I've noted, its from last week): China central bank warns against 'Minsky Moment' due to excessive optimism
(and thus ends my rant ;-) )
If you are wondering about what a Minsky moment is, in a nutshell its when, following a prolonged period of stability, risks in the financial system surface and instigate a sharp cycle of declining asset prices & sudden drops in liquidity.
This is my favourite minky moment: