To those of us of a certain age, it’s shocking that nearly a quarter-century has passed since Alan Greenspan uttered his now-infamous phrase “irrational exuberance.” Yet the former Federal Reserve head’s description of the dot-com mania seems inadequate to describe some of the wackiness going on these days.
The manic ebullience of some market aspects has spilled over into popular culture, observes Peter Atwater, an adjunct professor at William & Mary. In his Financial Insyghts, he catalogs a slew of examples, most prominently the cover of New York Magazine, which asks, “Can I SPAC My Stonks With NFTs?”
It makes me wish I could consult Paul Macrae Montgomery, a student of the markets who passed away too soon. Before behavioral economics was recognized in academe, he poked holes in the accepted orthodoxy that markets are rational, even though they’re made up of folks prone to all-too-human mood swings.
Perhaps most notably, Paul originated the magazine-cover indicator. He found that the cover stories of general-circulation periodicals, such as Time, captured a trend just weeks or months before it was about to reverse.