ANDY KESSLER: Stocks can always get cheaper.

Market bottoms form when everyone is negative. The International Monetary Fund says the world economy is headed for “stormy waters.” Ray Dalio, who founded the hedge fund Bridgewater Associates, thinks we’ll see five years of “negative or poor real returns.” JP Morgan CEO Jamie Dimon says stocks could fall another 20%. Is that negative enough? It’s a start, given that few said these words a year ago.

My sense is there is more ugly stuff coming. Eighty percent of hedge funds are down and dumping their losers. Short-term interest rates are heading to 5% or higher, which means stocks will trade at a lower price-earnings multiple. Even worse, quarterly earnings misses are starting, and, like cockroaches, you never see only one.

In the U.K., higher interest rates triggered selloffs of gilts (bonds) by pension funds that had hedged or insured against higher interest rates with liability-driven investing products—think leveraged derivatives. When rates rise, investors get margin calls to put up more collateral, so they sell more bonds, which causes interest rates to rise even higher, triggering more selling. This “doom loop” was halted, at least temporarily, after the Bank of England’s intervention. A previous doom loop involved portfolio insurance, which automatically sold as stocks went down, intensifying the 1987 stock-market crash. And remember the implosion of Archegos that forced selling? That was only last year. We could see many more.

Stay tuned, stay liquid, avoid debt. Which is good advice in general.

Plus: “Currency dislocations in Asia and Russia in 1997 and 1998 crushed markets. It feels similar today. There is more than $13 trillion in foreign dollar-denominated debt that, as the dollar rises, gets more expensive to pay back. And now price controls are being set up to limit the effects of higher energy costs on consumers in the U.K., Germany and elsewhere—another potential doom loop requiring more subsidies if energy costs rise.”