That would assume everybody can interpret the information correctly and make an unemotional decision regarding their investments. In reality, everyone wants the party to go on indefinitely.
Stupid money certainly exists but it tends to systematically flow to smarter investors. This causes smarter investors to make up the majority of the money in the market. I don't want to suggest that the market is perfect. It can remain quite ignorant of important facts like "Sometimes housing market values become highly correlated" for quite a while. But once these facts become known it tends to respond very quickly.