Tuesday, March 3, 2009

"Rational Apathy"

The original title was "What the opposite of Irrational Exuberance" (thanks Tahoe):

Floyd Norris reports:

Another stock market milestone was reached last week, when the S.&P. 500 fell under the Dec. 5, 1996, close of 744.38. The Dow, for what it is worth, is still above the 6,437.10 level it sported then.

(As I write this, the S.&P. is at 714 and the Dow at 6,880.)

That night Alan Greenspan uttered his legendary “irrational exuberance” comment. It was actually a question:
”How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?”

4 comments:

  1. I think the answer lies in a 2x2 grid with rational/irrational forming the x axis and exuberance and restraint forming the y axis.

    Irrational Restraint?

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  2. Wall Streeters are calling it "irrational despondency."

    Frankly, I think it's RATIONAL REASONING, but I'll go with "rational apathy."

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  3. Jack... keep an eye out for the 2x2 tomorrow.

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