Stock markets may have fallen sharply from their recent highs over the past weeks, but there is a wall of money sitting out there that could turn it all into a far greater rout.
It is a distant threat, but one that nonetheless has been noted.
Large institutional investors with long-term horizons have been hanging on to their stock holdings or, at most, making small tactical changes as world equities have taken a beating.
The latest evidence comes from U.S. financial services firm State Street, which reckons that many of its big investor clients -- whose $13 trillion it tracks -- actually bought stocks during August, taking advantage of better prices.
It adds to earlier poll findings and other flow data showing concerns but a degree of resilience among long-term investors faced with a growing credit crunch that threatens to dry up the liquidity that has driven a four-year equity bull market.
There is good news and bad in this, according to Michael Metcalfe, State Street's head of global macro strategy.
The good is that institutional money has not followed as world stocks, measured by MSCI, have fallen as much as 12.7 percent in a month.
They haven't panicked yet, Metcalfe said.
The bad -- and the big threat -- is that institutional investors could yet bail out of stocks if credit market worries get worse and/or monetary authorities do not keep stepping in to build confidence.
That could turn a correction into a prolonged bear market.
(We are at a) tipping point between risk reduction and risk aversion, he said.
The key for many investors is whether the Federal Reserve follows up last Friday's move in which it cut the discount rate which it charges to lend money to banks.
Stock markets were near-euphoric about the move and put in a couple of days of heady gains before cooling off a bit on Tuesday.
They now are clearly expecting more.
The actions by the Fed on Friday were a first step ... and the markets reacted positively, Henderson Global Investors said in a note. However, given the potential scale of the problems, further interventions by the Fed may be necessary.
Speculation about a cut before the Fed's next meeting has been growing and rumors were rife on Tuesday.
That said, the biggest reason for long-term investors to hang on to their holdings -- a robust global economy -- would argue against broad interest-rate cuts.
It is not necessarily appropriate that central banks ease, said Stephen Dowds, head of international equities at Northern Trust Global Investments, adding that by focusing on the discount rate and financial system the Fed was getting it right.
The wall of institutional money does, nonetheless, face a number of threats that could make it fall over.
They range from a meltdown in the finance system to contagion into the real economy and even redemptions by clients who might not have the tolerance of their fund managers.
To date there is little sign of such things actually happening.
The Fed is looking to the finance system and the economy is marching along -- China's so strongly that it even hiked rates on Tuesday.
As for redemptions, Dowds says he has seen scant sign of them or heard of others getting them.
Most people are seeing it as a correction in markets that were going to correct, he said.
It was also, he added, an opportunity to buy. Which brings us back to State Street.