It is easy, at the distance of a quarter of a century, to forget the full madness of the late-1990s dotcom bubble. The tech-heavy Nasdaq index in the US rose by 86% in 1999 alone. Companies only had to announce a hopeful “internet strategy” to see their share prices soar. And the key point is that it went on for ages.
Alan Greenspan, the then chair of the Federal Reserve, used the phrase “irrational exuberance” to describe the mood in stock markets as early as December 1996, more than three years before the bubble finally burst. Infamously, Greenspan himself went on to supercharge the latter stages of the mania by cutting interest rates three times, after a currency crisis in Asia in 1998 and the blow-up of a huge hedge fund, Long-Term Capital Management.
