The 2002 crash: from “irrational exuberance” to “infectious greed”

ABSTRACT This paper is an attempt to discuss the macroeconomic repercussions from deinflating a speculative bubble in stock markets and from an established low price trend. Revelations accrued this low price trend how comprise recommendations by financial analysts, corporation balance sheets, auditing companies and credit rating agencies make the asset pricing difficult, affect confidence by financial agents and contaminate their expectations. The crisis of confidence brought about by these revelations can potentially impact on economic growth of developed countries, beginning with the USA, raise risk aversion by investors and trigger reinforced regulation and supervision mechanisms in detriment to auto-regulating ones which had been prevailing up to the present moment.