Why? How do you measure excess? What's the current measurement? What value of excess indicates that we've gone through enough liquidation? Do you use a static model, or do you take into account effects caused by changes in government policy and economic growth? How about the unpredictable effect of irrational people like Michael Dell, and Bill Gates who started their companies against all odds?
What was the measure when Reagan took office? What was it when the stock market responded positively to his economic policies?
Answer: Human nature as reflected in history, over and over, without exception.
Moonman62: How do you measure excess?
Answer: You dont measure it but there are plenty of indicators: increase in money supply, speculative bubbles, financialization of economy, hype of new technology, people talking about this time its different, insiders bailing out leaving the public holding the bag, etc.
Do you use a static model
Human nature and history. The patterns are relatively invariant and difficult to ignore.