"Irrational exuberance, mark two", and "irrational exuberance - the sequel", were the labels being put on the speech delivered to the House Budget Committee by Mr Alan Greenspan, chairman of the US Federal Reserve.
The Greenspan speech wiped 1 1/2 points off US Treasury bonds, caused similar losses in UK gilts and brought the UK equity market's drive to new peaks to a shuddering halt yesterday afternoon. The FTSE future fell around 200 points from its high for the session.
Up more than 60 points at its best level of the day, and close to an all-time intra-day high, the FTSE 100 index instantly went into freefall, converting a 40points plus gain to a 70.5 fall at the worst level of the session.
At the close, Footsie was 43.5 points lower at 5,262.1. The FTSE All-Share index, which powered through the 2,500 level to hit an intra-day record of 2,507.68, also went into reverse, finishing 14.3 off at 2,469.13.
The other FTSE indices were much less affected by the sudden Greenspan-inspired slide in the leaders. The FTSE 250, which hit an intra-day record of 4,901.3, still managed to hold on to a gain of 6.3 at 4,882.3. And the SmallCap also registered new intra-day and closing highs, finishing 8.7 ahead at 2,380.3, having touched 2,383.0.
Wall Street plunged over 110 points within minutes of the speech, unnerving all European markets, but especially London where Footsie has been hitting new records for many days.
Mr Greenspan described the US economy as being on an "unsustainable track" and said a continuation of recent stock market gains was "clearly unrealistic", echoing his statement made last December when he warned of the US stock market's "irrational exuberance". That statement sent Wall Street and global markets into a tailspin - Footsie briefly plunged 168 points in the session immediately following Mr Greenspan's remarks.
But, as some of the more optimistic dealers pointed out, the Dow Jones Industrial Average recouped all of its Greenspan-provoked losses within days and Footsie raced to new highs by the end of December.
Others, however, were much more cautious about the state of global markets. A senior market-maker at one big European securities house said there was every possibility that Wall Street and other markets, including London, would take heed of Mr Greenspan's latest warning.
"There was certainly some panicking around the market, but it was the bond markets that took it on the chin; we'll probably revisit the story tomorrow if Wall Street continues to slide," he said.
Turnover in equities reached 956 million shares by 6 p.m., continuing the recent upturn in volume.
It was by no means all doom and gloom in the leaders. Property and composite insurance stocks made rapid progress, responding to positive research documents published by HSBC and in the case of Royal & Sun Alliance, SBC Warburg Dillon Read.
