Markets: Extraordinary popular delusion

The stock market crash has been big. The US S&P 500 index is 52% off its high, the largest percentage drop since 1937. But this was a mighty big bubble. The US stock market finally has reversed all the gains induced by the monetary stimulus of Alan Greenspan and his keep-it-going Federal Reserve. Think back to February 1995. In that month, the Dow Jones Industrial Average – the index of blue-chip stocks that gets the headlines – first broke 4,000. Greenspan said then he wanted to slow down th...