I don't think the efficient market hypothesis says anything about the convergence time or the path to convergence, but I'm not an economist.

As someone not in finance, what actually leads to this pattern (of smaller blips followed by faster recovery)? Is this a consequence of central banks knowing more than before? Algorithmic trading?

My intuition is that financial markets seem increasing dissociated from any correlation with street level economy or the financials of traded companies?

If it's so efficient how come we can't seem to build enough houses... or build anything anymore for that matter?