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Minsky Financial Instability Hypothesis

darkkermit
Posts: 11,204
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2/17/2013 2:35:45 PM
Posted: 3 years ago
For those unaware of Minsky's Financial Instability Hypothesis, it basically states that the financial system that currently occured would have led to financial collapse, due to the interaction between hedge funds, banks, and overleveraging. I really don't know too much of the details, but he did predict the financial collapse.

Now he's creating a dynamic processing modeling system to create a more economic forecasting system which should be interesting.
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wrichcirw
Posts: 11,196
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2/17/2013 4:20:49 PM
Posted: 3 years ago
At 2/17/2013 2:35:45 PM, darkkermit wrote:
For those unaware of Minsky's Financial Instability Hypothesis, it basically states that the financial system that currently occured would have led to financial collapse, due to the interaction between hedge funds, banks, and overleveraging. I really don't know too much of the details, but he did predict the financial collapse.



Now he's creating a dynamic processing modeling system to create a more economic forecasting system which should be interesting.

1) Minsky died in 1996.

2) Minsky applied business 101 to economics 101, that after you are done modeling supply and demand, you actually then have to look at how a business works. Businesses have three sources of capital - shareholders, debtholders, and profit. What Minsky warned against was that when profits seem to keep going up, businesses will get overly optimistic and load up on debt to take advantage of more profits faster. Once a market reaches saturation, those extra profits don't materialize, thereby turning the extra debt into a gigantic money pit. Firms scramble to deleverage, which only exacerbates the problem. It's the same as if the music stopped during musical chairs - everyone tries to grab a seat, however the seats keep disappearing.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
darkkermit
Posts: 11,204
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2/17/2013 5:18:57 PM
Posted: 3 years ago
At 2/17/2013 4:20:49 PM, wrichcirw wrote:
At 2/17/2013 2:35:45 PM, darkkermit wrote:
For those unaware of Minsky's Financial Instability Hypothesis, it basically states that the financial system that currently occured would have led to financial collapse, due to the interaction between hedge funds, banks, and overleveraging. I really don't know too much of the details, but he did predict the financial collapse.



Now he's creating a dynamic processing modeling system to create a more economic forecasting system which should be interesting.

1) Minsky died in 1996.

Alright, neverind. those that used his theory predicted it.

2) Minsky applied business 101 to economics 101, that after you are done modeling supply and demand, you actually then have to look at how a business works. Businesses have three sources of capital - shareholders, debtholders, and profit. What Minsky warned against was that when profits seem to keep going up, businesses will get overly optimistic and load up on debt to take advantage of more profits faster. Once a market reaches saturation, those extra profits don't materialize, thereby turning the extra debt into a gigantic money pit. Firms scramble to deleverage, which only exacerbates the problem. It's the same as if the music stopped during musical chairs - everyone tries to grab a seat, however the seats keep disappearing.
Open borders debate:
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malcolmxy
Posts: 2,855
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2/17/2013 6:09:41 PM
Posted: 3 years ago
At 2/17/2013 5:18:57 PM, darkkermit wrote:
At 2/17/2013 4:20:49 PM, wrichcirw wrote:
At 2/17/2013 2:35:45 PM, darkkermit wrote:
For those unaware of Minsky's Financial Instability Hypothesis, it basically states that the financial system that currently occured would have led to financial collapse, due to the interaction between hedge funds, banks, and overleveraging. I really don't know too much of the details, but he did predict the financial collapse.



Now he's creating a dynamic processing modeling system to create a more economic forecasting system which should be interesting.

1) Minsky died in 1996.

Hyman...

Alright, neverind. those that used his theory predicted it.

No, he predicted it. It was his model. I predicted it in '96 as well...it wasn't hard to see if you knew what to look for.

2) Minsky applied business 101 to economics 101, that after you are done modeling supply and demand, you actually then have to look at how a business works. Businesses have three sources of capital - shareholders, debtholders, and profit. What Minsky warned against was that when profits seem to keep going up, businesses will get overly optimistic and load up on debt to take advantage of more profits faster. Once a market reaches saturation, those extra profits don't materialize, thereby turning the extra debt into a gigantic money pit. Firms scramble to deleverage, which only exacerbates the problem. It's the same as if the music stopped during musical chairs - everyone tries to grab a seat, however the seats keep disappearing.

Steve Keen is building MINSKY, which is a modelling application which uses Mr. Hyman's (hee hee) theories and modeling framework.

this is a demo of the application around a system with fish and sharks (fish multiply, sharks eat fish)
War is over, if you want it.

Meet Dr. Stupid and his assistants - http://www.debate.org...
darkkermit
Posts: 11,204
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2/17/2013 6:23:15 PM
Posted: 3 years ago
At 2/17/2013 6:09:41 PM, malcolmxy wrote:
At 2/17/2013 5:18:57 PM, darkkermit wrote:
At 2/17/2013 4:20:49 PM, wrichcirw wrote:
At 2/17/2013 2:35:45 PM, darkkermit wrote:
For those unaware of Minsky's Financial Instability Hypothesis, it basically states that the financial system that currently occured would have led to financial collapse, due to the interaction between hedge funds, banks, and overleveraging. I really don't know too much of the details, but he did predict the financial collapse.



Now he's creating a dynamic processing modeling system to create a more economic forecasting system which should be interesting.

1) Minsky died in 1996.

Hyman...

Alright, neverind. those that used his theory predicted it.

No, he predicted it. It was his model. I predicted it in '96 as well...it wasn't hard to see if you knew what to look for.

That was 12 years ago before the collapse. If he predicted it, that wold have been an even longer time before the actually collapse. Also how old are u? I happened to be 6 years old at the time, so can't exactly predict that.

You're pretty immature for your age.


2) Minsky applied business 101 to economics 101, that after you are done modeling supply and demand, you actually then have to look at how a business works. Businesses have three sources of capital - shareholders, debtholders, and profit. What Minsky warned against was that when profits seem to keep going up, businesses will get overly optimistic and load up on debt to take advantage of more profits faster. Once a market reaches saturation, those extra profits don't materialize, thereby turning the extra debt into a gigantic money pit. Firms scramble to deleverage, which only exacerbates the problem. It's the same as if the music stopped during musical chairs - everyone tries to grab a seat, however the seats keep disappearing.

Steve Keen is building MINSKY, which is a modelling application which uses Mr. Hyman's (hee hee) theories and modeling framework.



this is a demo of the application around a system with fish and sharks (fish multiply, sharks eat fish)
Open borders debate:
http://www.debate.org...
malcolmxy
Posts: 2,855
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2/17/2013 6:29:10 PM
Posted: 3 years ago
At 2/17/2013 6:23:15 PM, darkkermit wrote:
At 2/17/2013 6:09:41 PM, malcolmxy wrote:
At 2/17/2013 5:18:57 PM, darkkermit wrote:
At 2/17/2013 4:20:49 PM, wrichcirw wrote:
At 2/17/2013 2:35:45 PM, darkkermit wrote:
For those unaware of Minsky's Financial Instability Hypothesis, it basically states that the financial system that currently occured would have led to financial collapse, due to the interaction between hedge funds, banks, and overleveraging. I really don't know too much of the details, but he did predict the financial collapse.



Now he's creating a dynamic processing modeling system to create a more economic forecasting system which should be interesting.

1) Minsky died in 1996.

Hyman...

Alright, neverind. those that used his theory predicted it.

No, he predicted it. It was his model. I predicted it in '96 as well...it wasn't hard to see if you knew what to look for.

That was 12 years ago before the collapse. If he predicted it, that wold have been an even longer time before the actually collapse. Also how old are u? I happened to be 6 years old at the time, so can't exactly predict that.

I worked in the mortgage industry for 6 months. It was more than enough time to see that this system was going to implode.

You're pretty immature for your age.

That's the nicest thing you've ever said to me. Thank you. (and, you're welcome for me placing the correct information in your thread about this fledgling application as well as properly calling out Professor Keen, who you didn't even know existed.)


2) Minsky applied business 101 to economics 101, that after you are done modeling supply and demand, you actually then have to look at how a business works. Businesses have three sources of capital - shareholders, debtholders, and profit. What Minsky warned against was that when profits seem to keep going up, businesses will get overly optimistic and load up on debt to take advantage of more profits faster. Once a market reaches saturation, those extra profits don't materialize, thereby turning the extra debt into a gigantic money pit. Firms scramble to deleverage, which only exacerbates the problem. It's the same as if the music stopped during musical chairs - everyone tries to grab a seat, however the seats keep disappearing.

Steve Keen is building MINSKY, which is a modelling application which uses Mr. Hyman's (hee hee) theories and modeling framework.



this is a demo of the application around a system with fish and sharks (fish multiply, sharks eat fish)
War is over, if you want it.

Meet Dr. Stupid and his assistants - http://www.debate.org...
malcolmxy
Posts: 2,855
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2/17/2013 6:31:22 PM
Posted: 3 years ago
Also, the guy's name was Hyman Minsky...it's a funny name...like former Mariner 3rd Base Coach, Rusty Kuntz.
War is over, if you want it.

Meet Dr. Stupid and his assistants - http://www.debate.org...
wrichcirw
Posts: 11,196
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2/18/2013 9:17:14 AM
Posted: 3 years ago
At 2/17/2013 6:31:22 PM, malcolmxy wrote:

You're pretty immature for your age.

Also, the guy's name was Hyman Minsky...it's a funny name...like former Mariner 3rd Base Coach, Rusty Kuntz.

Totally irrelevant - this lesbian is hot. :o
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
wrichcirw
Posts: 11,196
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2/18/2013 9:21:42 AM
Posted: 3 years ago
At 2/18/2013 9:17:14 AM, wrichcirw wrote:
At 2/17/2013 6:31:22 PM, malcolmxy wrote:

You're pretty immature for your age.

Also, the guy's name was Hyman Minsky...it's a funny name...like former Mariner 3rd Base Coach, Rusty Kuntz.



Totally irrelevant - this lesbian is hot. :o

Even more irrelevant, I tried listening to her for about a minute or two...no idea what she was saying. All I focused on was the fact that she left one button too many unbuttoned. Just saying...:D
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
malcolmxy
Posts: 2,855
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2/18/2013 9:29:01 AM
Posted: 3 years ago
At 2/18/2013 9:21:42 AM, wrichcirw wrote:
At 2/18/2013 9:17:14 AM, wrichcirw wrote:
At 2/17/2013 6:31:22 PM, malcolmxy wrote:

You're pretty immature for your age.

Also, the guy's name was Hyman Minsky...it's a funny name...like former Mariner 3rd Base Coach, Rusty Kuntz.



Totally irrelevant - this lesbian is hot. :o

agreed...I think.

Even more irrelevant, I tried listening to her for about a minute or two...no idea what she was saying. All I focused on was the fact that she left one button too many unbuttoned. Just saying...:D

that is a logical impossibility. i expect more from you, man...c'mon.
War is over, if you want it.

Meet Dr. Stupid and his assistants - http://www.debate.org...