Starting in 2008, central banks created a bubble in sovereign bonds, the bedrock of the current financial system. These bonds represent the “risk free” (if they are not Argentine, Greek, Venezuela or Zimbabwe bonds) rate of return, or the rate against which all risk assets including stocks are valued.
So if these bonds go into a bubble, everything goes into a bubble.
Which is why, when central banks ended or muted their massive QE programs, or worse still for the markets, started raising rates while also engaging in QT as the Fed is doing, the Bubble of Everything burst some time ago.
Put simply, the financial system is now adjusting to economic realities, or where things should be priced without Central bank props in place.
Many investors did not understand that the stock was significantly overpriced this spring.