Low interest rates are the biggest culprit in this. Low interest rates have given these CEOs to borrow money to pump their stocks. Had interest rates been higher, say 6 percent, (a) these CEOs wouldn't have borrowed money to pump their stock, and (b) many investors would not have invested 60 to 90 percent of their portfolio in stocks. Another consequence of these low interest rates is (c) the inflation of real estate in many markets. That means, the middle class (say, employees of FAANG types) have loved this gravy train. Politicians, as a class, have benefited from this: inflated equities; inflated real estate. Greenspan, Bernanke, Yellen, Powell and the political class (both Democrats and Republicans) have all contributed to this.
People who invested in index funds fared better than hedge funds. And there was no real price discovery thanks to Fed put; even many small hedge funds closed their shops when they couldn't beat ETFs based on indices like SPY, VOO, QQQ, etc.
Now both bonds and stocks are crashing, as the commercial paper becomes junk.
Absolutely this. Someday we need to have interest rates somewhat sticky at ~5% (or whatever the sensible figure is), and lean more on fiscal policy to control the economy. Whether there is a viable path to that point is unclear. Perhaps the money printing required to cushion the economy will spike inflation, and once we get back on our feet we hike rates to control it?
People who invested in index funds fared better than hedge funds. And there was no real price discovery thanks to Fed put; even many small hedge funds closed their shops when they couldn't beat ETFs based on indices like SPY, VOO, QQQ, etc.
Now both bonds and stocks are crashing, as the commercial paper becomes junk.