A phrase uttered by Federal Reserve Chairman Alan
Greenspan in December 1996 to refer to the stock market’s phenomenal gains. At
that point, the Dow Jones Industrial Average was below 6,500. The comment
caused the stock market to drop sharply the next day as traders were afraid
that Greenspan’s concerns would lead the Federal Reserve to take actions to
stop the market’s climb, such as raising interest rates or limiting the amount
of margin, or borrowed funds, that investors could obtain from their broker
when buying stocks or other investments. The phrase was often repeated as the
market continued to climb to record highs through early 2000.