Is the 'Minsky moment' upon us?

Steen Jakobsen

Chief Economist & CIO
Steen Jakobsen first joined Saxo Bank in 2000 and has served as both Chief Economist and Chief Investment Officer since 2009. He focuses on delivering asset allocation strategies and analysis of the overall macroeconomic and political landscape as defined by fundamentals, market sentiment and technical developments in the charts.

In my latest Quarterly Outlook, I told readers that Q2 2018 marks 'the end of a cycle like no other', and the evidence supporting this view just keeps piling up.

From geopolitical conflagrations to de-dollatrisation, monopolies to credit impulse, the warning signs are all there: we are entering a period of markedly increased volatility.

At the centre of the conflagration lies the credit impulse. Ultimately, everything is about credit... and credit has stopped flowing. Beyond this key metric, we can also see that the profit impulse in the US is running in the negative – so two of three of the economy's key drivers are in sub-zero territory.

The price of money is rising, recession is coming, and negative credit impulse and yield curve readings represent confirmation of the trend.

For a look at some of the charts I consider to have the most explanatory power regarding this quarter and the coming storm, I invite you to download the recent presentation I made for South Africa's Sasfin.


Saxo Capital Markets (Australia) Pty Ltd prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed you initial investment.

Please refer to our Analysis Disclaimer, and our Combined Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at