In the liquidation phase of the business cycle the things that show the greatest excess suffer the most. Whatever goes to the greatest extremes of value tends to undergo the greatest retrenchment. That's why the stock market boom must turn to dust. As Americans switched their savings accounts into stocks, liquidity suffered. Easy money and credit also worsens liquidity.
Loans have to be repaid, thus worsening the borrower's liquidity.
Poor liquidity in the stock market means that individual stocks drop like a brick on a small volume of selling and dipsters have much less buying power on declines. Rumors of a plunge protection team secretly propping up the stock market seem all the more credible these days as huge volume whipsaws the stock prices. All the way up this market had a weird correction phase. Normally, temporary corrections are short and sharp, ratcheting downward ten to twenty percent in a few days. A series of big drops batters the market.