Alan Greenspan

Financial Crisis 2007
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But how do we know when irrational exuberance has unduly escalated asset values

We can see that in the inverse relationship exhibited by price/earnings ratios and the rate of inflation in the past. which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?

Full text

The day of the speech, the Dow Jones industrial average closed at 6,437.10 points
Sharon Reier, Herald Tribune, DECEMBER 1, 2001

Former Fed Chief Greenspan Sees No Bubble in Dow 16,000
Bloomberg, Nov 28, 2013

Infectious Exuberance
Financial bubbles are like epidemics
Robert J. Shiller, July/August 2008 Atlantic Monthly

CNN/WSJ
"The human race has never found a way to confront bubbles," Former Federal Reserve Chairman Alan Greenspan said Thursday
in reference to the euphoria that can precede contractions, or reactions,
like the current market turmoil, according to a published report.
Greenspan compared the turmoil to that of 1987 and in 1998,
when the giant hedge fund Long-Term Capital Management nearly collapsed,
the Wall Street Journal reported on its Web site.

"The behavior in what we are observing in the last seven weeks is identical in many respects to what we saw in 1998, what we saw in the stock-market crash of 1987, I suspect what we saw in the land-boom collapse of 1837 and certainly [the bank panic of] 1907," Greenspan said at the event organized by the Brookings Papers on Economic Activity, according to the Journal.

CNN 7/9 2007