Is it another bubble? The huge question – huge concern – of the moment is that share markets around the world might be heading into the land of irrational exuberance. The expression was used by Alan Greenspan, then head of the Federal Reserve Board, in December 1996.
"How," he asked, "do we know when irrational exuberance has unduly escalated assets values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?"
The phrase caught the public imagination and became the title of a book by Robert Shiller, the Yale economist, in 2000 – when it was more apposite, for in 1996 the climb on the US and other main stock markets still had another three years to run, whereas by 2000 the dot-com boom had truly turned to bust.
Now, a decade and a half on, US markets have just passed their previous peak. However, notwithstanding the recent rises, the FTSE 100 index is still 150 points short of its all-time high of 6,930 reached on 31 December 1999, while the Japanese Nikkei index is still less than half its all-time high of 38,916 on 29 December 1989. Funny, isn't it, how both those...