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?”


  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?

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

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

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