i think i've mentioned Minsky's FIH more times here than, well...i don't think anyone has, but it bears repeating.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=161024
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=161024
in layman's terms - unregulated financial markets (and capitalism itself) are fucked up shit that is inherently unstable.Minsky identifies hedge, speculative, and Ponzi finance as distinct income-debt relations for economic units. He asserts that if hedge financing dominates, then the economy may well be an equilibrium-seeking and containing system: conversely, the greater the weight of speculative and Ponzi finance, the greater the likelihood that the economy is a "deviation-amplifying" system. Thus, the FIH suggests that over periods of prolonged prosperity, capitalist economies tend to move from a financial structure dominated by hedge finance (stable) to a structure that increasingly emphasizes speculative and Ponzi finance (unstable)