Federal Reserve Chairman Alan Greenspan delivered a rather dry and complex speech on December
5, 1996. The reaction, however, to such a seemingly mundane oration was unexpectedly immediate
and powerful. It rattled Greenspan’s confidence. He had innocuously uttered the now infamous
phrase “irrational exuberance,” and the mighty market roared its disapproval.
For several days, Bloomberg screens turned an angry red around the world. The “Maestro” was no
David when he came face to face with Goliath. Greenspan cowered in the giant’s presence, fear
blinding him to the ogre’s fragilities. Sadly, it was an opportunity lost because it is in the crucible of
confronting giants—with everything on the line—that true grit makes the most difference in what
the future will hold.
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