Tuesday, September 27, 2005


So that's what we're calling "irrational exuberance" these days.

Sept. 27 (Bloomberg) -- Federal Reserve Chairman Alan Greenspan said asset prices often fall after long periods of stability and perceived low risk create ``euphoria,'' comments that economists read as a warning about housing and bond prices.

``A decline in perceived risk is often self-reinforcing in that it encourages presumptions of prolonged stability,'' Greenspan told the National Association for Business Economics in Chicago today. ``History cautions that extended periods of low concern about credit risk have invariably been followed by reversal with an attendant fall in the prices of risky assets.''