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BREAKDOWN: 'Minsky Moments' and the Financial History of Pandemics

As a wobbly recovery tries to take hold, was the coronavirus pandemic simply the pinprick on a larger economic bubble?

May 19, 2020

Jamie Catherwood works at O’Shaughnessy Asset Management, a quantitative long-equity investment firm. More importantly, however, he is the finance history guy on Twitter. His “Financial History: Sunday Reads” curation pieces and longer form articles on his site Investor Amnesia have become required reading for anyone who wants the historical context for current financial issues.

On this episode of The Breakdown, Jamie and NLW discuss:

  • Financial lessons from previous pandemics, including the 14th century bubonic plague; an 1892 Cholera outbreak in Hamburg, Germany; and, of course, 1918
  • Strange parallels between 1918’s Spanish flu and the current Coronavirus crisis, including an increase in the price of oranges
  • The concept of “Minsky Moments,” a key inflection point in bubbles where over-exuberant markets become unwound extremely quickly