I've been following your posts for the past few weeks and you seem very knowledgeable - can you please explain what you mean by this.
Hedge funds, “funds of funds,” investment banks, commodity funds, etc — they have bought positions in stocks, bonds, debt securities, commodities, etc with borrowed money.
When you buy positions with borrowed money, if your position goes down, you can get a “margin call” — you either have to put up more money to cover the position, or you have to sell off out of the position to re-establish your margin limits.
With the markets going down as hard as they are, hedge funds all over the world are having to sell assets to get out from under margin loan calls from banks. The banks want their money back and they want it back *now*.
When this is over, banks aren’t going to be lending money for margin again soon. The valuations (eg, price:earnings on stocks) of assets won’t be going back up in a hurry. In housing, for example, banks won’t write 100% mortgages any more - they’ll require 10% to 20% down payments. This will cause more people to quit paying too much for a house, and house prices will come down.
“De-leveraging” is going to reduce the valuations of all sorts of things - aka “deflate” the values.