Minsky Moments

A Minsky Moment refers to a sudden financial collapse that occurs after a prolonged period of economic stability and rising asset prices. Named after economist Hyman Minsky, it describes how investors might become overly optimistic during good times, taking on high levels of debt and risk. Eventually, when the market conditions shift—often due to a minor shock or realization—this excessive risk leads to rapid sell-offs, sharp declines in asset prices, and a crisis. Essentially, it’s the point where the bubble bursts after excessive confidence has built up over time.