Stocks Below Greenspan's "Irrational Exuberance" Levels

Good observation from Barry Ritholtz , who notes that the S&P at 700 is now below where the index stood on the day that Alan Greenspan muttered something about “irrational exuberance.” That was December 5, 1996, when the S&P 500 was at 744.38 and the Dow was a 6437.10, so we have a little ways to go there.

Two observations:

— Despite the decline in the market, and whatever you want to say about a “lost” 12 years, those years were certainly not lost. The technology and cultural innovations we’ve developed since then would probably boggle the minds of any one of us back in 1996. If you stop thinking about the world in terms of GDP or the S&P, the actual changes in our lives remain incredible.

— And the more we think about the 90s, the more we realise how ludicrous Obama’s growth projections are. Come on. Those were the golden years of big American tech companies, like Microsoft and Intel. We had peace, a nascent bubble and a much tinier debt load. In short, we had a lot to be irrationally exuberant about. The idea that we’ll grow anywhere near that, barring some massive manipulation of the statistics coupled with inflation is ludicrous.

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