When valuation goes poof, the vapor wealth will disappear.

A big portion of the wealth was not based on real corporate earnings but on companies buying out each other using
1) high stock valuation as currency,
2) easy credit/cheap debt/easy money.

To me, this is very similar to the cross-ownership of the Japanese Keiretsus. In America, we just traded stocks in companies back and forth at ever higher prices. Then everyone started trading houses at ever higher prices. As long as there was a great fool, wealth was created.

That can only last as a couple of decades. In the end, only net income derived from real revenues can justify valuation. Warren Buffet understands that very well.