Explanations
Valuation is based on cash flows. Assumptions: GNP bubbles are burps in ongoing expansion. Company bubbles are projected cash flows that don't happen. Hidden assumptions: Unlimited resources and unlimited dumping. And if more cannot be had at any price, a conventional market no longer exists.
Human valuation is a shifting phenomenon, so expecting any system that quantifies it to convert fallibility into perfection is unreasonable. Markets are social learning mechanisms -- as well as status systems. Since learning is emotional as well as intellectual, excess exuberance is expected, but then; how fast can it be corrected?

The recent size of exuberance overshoots suggests that the system is seriously flawed, lacking feedback that tells us we're too optimistic. 

This seems particularly foolish when the system lacks incentive or means to anticipate whether we are collectively able to physically do what we are projecting that we can do, or what the consequences will be. 

And if transaction-based valuations become so abstract from any physical reality that people are only trading promises of future income in various risk categories, is it blowing a bubble based only on itself -- assuming that trading volume itself is an indicator of value? 
CONTEXT(Help)
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Compression Thinking »Compression Thinking
Compression vs. Expansion Thinking »Compression vs. Expansion Thinking
Expansion Economics »Expansion Economics
Bubbles »Bubbles
Explanations
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