There also is not a lot of dry powder to meet liquidity demand. Households, for example, already have record high investment of equities as a percent of their total liquid assets. They are not going to be in the market to sop up the overflow of liquidity demand if the market tumbles.
There are a number of dominos lined up to either be the mover or to add to a cascade: Inflation, recession, the two combined for stagflation, tech still sitting well above long-term fundamentals, geopolitical risks, quick-burn with Russia, smoldering with China.
To give a sense of this, the chart below shows the market downturn post-2000. There are three legs down. These largely can be pinned to three crises events. The first was a delayed response to the bursting of the TMT dotcom bubble. This then woke people up to the crazy valuations that extended beyond TMT and dotcom. And this then was followed by a rethinking of earnings after the earnings-centered fraud of Enron and others.
