Investors are fully committed, borrowing to the max, with margin debt hitting a record $890 billion. The leverage is at an all-time high, and that’s a recipe for disaster when things start to go south.

The banks are also feeling the pressure, suing the Fed over its stress tests, hoping to free up capital because they’re running low. With big institutions already maxed out, it’s clear there’s not much room left to move. The liquidity that typically cushions market downturns is evaporating.