The Man Who Knew: The Life and Times of Alan Greenspan — Twenty-five: ALAN.COM

1. 1. On March 29, 1999, the Dow Jones Industrial Average closed above 10,000 for the first time, driven by the technology revolution.
2. 2. Priceline.com, an obscure start-up with no assets and $114 million in losses, debuted on the stock market and reached a $10 billion valuation on its first day.
3. 3. Greenspan refused to raise interest rates in early 1999 despite FOMC members' concerns about stock market exuberance.
4. 4. Greenspan's reluctance to tighten was based on quiescent inflation, but he had previously insisted on policy discretion rather than a public inflation target.
5. 5. At Jackson Hole in August 1999, Bernanke and Gertler argued that central banks should target inflation and ignore asset bubbles, claiming inflation targeting would automatically stabilize markets.
6. 6. Alan Blinder and Rudiger Dornbusch criticized Bernanke and Gertler, arguing that low inflation could lead to financial bubbles and that the Fed's asymmetric response encouraged risk-taking.
7. 7. Greenspan quietly told Bernanke and Gertler after their presentation, 'You know, I agree with you,' despite his long preoccupation with bubbles.
8. 8. In October 1999, Greenspan argued that the Fed should rely on market discipline rather than heavier regulation for megabanks, acknowledging but dismissing systemic risks.
9. 9. The Financial Services Modernization Act of 1999, which legalized the Travelers-Citi merger, was passed without addressing too-big-to-fail risks.
10. 10. Greenspan's Y2K plan involved selling over $300 billion in liquidity options to banks, which calmed markets but also fueled a stock market rally.
11. 11. In December 1999, Greenspan declined to raise rates despite a booming economy, unemployment at 4.1%, and a widening trade deficit, citing Y2K concerns.
12. 12. Greenspan accepted a fourth term as Fed chairman in January 2000, with President Clinton joking about taking 'Alan.com' public.