Long stocks is probably the most crowded boat in the trading ocean at the moment and it shows no signs of slowing. If there’s one thing we know about any market is that nothing lasts forever and this particular boat is bursting at the seams.

Marketwatch writes that central banks are among some of the biggest players in the stock market as they diversify investments away from currency reserves in the perpetual hunt for yield.

David Marsh at MW notes that central banks have become major players in stocks and fears are mounting that they are overstretching themselves by operating in too many areas, an accusation leveled at banks over the reason the banking crisis happened.

A study group will be issuing a survey tomorrow which covers $29.1tn in investments held by 400 public sector institutions. Amid that, investments from 157 central banks, 156 public pension funds and 87 sovereign funds will be detailed.

Some of the numbers detailed by Marsh are scaringly high.

Norway’s sovereign fund has 60% of its $880bn fund in equities. It owns 1.3% of every globally listed company and 2.5% of listed European companies.

The SNB had 15% of foreign exchange assets in equities at the end of 2013. That amounted to $72bn. In the survey SNB head Thomas Jordan says;

“We are now invested in large-, mid-, and small-cap stocks in developed markets worldwide…. The decision to introduce new asset classes should always be taken with the aim of improving the long-term position, and with the awareness that a change should be sustainable, even in more difficult times.”

The SNB and Norway are small fry compared to China’s SAFE’s $3.9tn and Japan’s GPIF’s $1.3tn under management. China is heavily into stocks and Abe want’s the GPIF to become more aggressive in risk trades.

I’ve long said that at some point either prices will catch up with fundamentals or fundamentals with prices, but I’ve given up waiting. The sheer scale of the stock bull run across the major economies could still go on for years. No market ever goes up infinitely and this is one huge crowded trade. While economies recover the risk of a pop recedes but it will only take one big event to bring the whole damn house of cards crashing down.

Central banks taking the mantle from the national banks for diversifying beyond their realm could spell catastrophic trouble if we get another crisis. After all, who will rescue the rescuers?