After the September 11, 2001 attacks , the Federal Open Market Committee voted to reduce the federal funds rate from % to %.  Then, after the accounting scandals of 2002, the Fed dropped the federal funds rate from then current % to %.  Greenspan stated that this drop in rates would have the effect of leading to a surge in home sales and refinancing, adding that "Besides sustaining the demand for new construction, mortgage markets have also been a powerful stabilizing force over the past two years of economic distress by facilitating the extraction of some of the equity that homeowners have built up over the years". 
During the dot-com bubble of the 1990s, equity market valuation was a popular topic for investors, financial analysts and academics. Some questioned whether traditional accounting and financial information had lost its value relevance, as stocks traded at multiples of earnings well in excess of historic levels, leading Alan Greenspan to caution against irrational exuberance. This study examines the relation between market valuation and traditional accounting information before, during and after the bubble. We document a decline in the relation between market value and traditional accounting information during the bubble period followed by an increase after the collapse of the market in 2000. We also examine alternative explanations to the irrational exuberance theory, including the quality of earnings, and the aggressiveness of financial analysts' forecasts, finding weak support for either alternative.