So how much cash is there on the sidelines?
I dunno. Probably lots (but maybe not as much as people think).
Asian central bank reserves are pretty big (about $3.5 trillion between China and Japan).
US money market stats show about $3.78 trillion in total money market assets presently compared to assets of $3.15 trillion in January 2008 (and $2.5 trillion in June 2007).
US bank excess reserves are about $877 billion.
Mutual fund cash levels have been rising since 2007, but are still only at 5.5% or so (and have no doubt been drained by investor withdrawals).
Much of this liquidity is going to either stay on the sidelines or be drained from the system. How much stays on the sidelines is hard to tell. With all the secondaries, short covering, and bond issuance going on, it won't take much to hoover up $500 billion or so, which would leave about another $500 billion to enter the fray.
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