Although Kindleberger focuses on increases in bank credit as a common source of expanding liquidity, there are many potential sources. Financial innovations, increased leverage, margin buying, and other techniques can stretch more buying power from a given monetary base. Walter Bagehot, the great 19th Century political economist, suggested that panics formed when an object of speculation attracts the greed of authors, rectors, and grandmothers. The purpose of buying is to sell and take a capital gain as the price rises up and up. The new buyer's motives are the same, and this euphoria continues so long as expectations do not change and liquidity holds out.
Distress is the next stage of a classic crisis.
Distress is the stage between euphoria and revulsion and when there is concern that the strength of the market may be fragile or that the limits of liquidity may be near. Distress is an unsettled time and the reactions to this unsettled environment often deflate the bubble and defuse the mania. Distress can persist from lengths of time until the crisis is averted, or it can turn sharply into revulsion. Revulsion is a sharp shift in actions and expectations caused by new information or a significant event. In Minsky's model, revulsion and discredit lead to crisis, as outsiders join insiders in selling off.