[decimon]

Financial institutions, desperate to repair the damage inflicted on their balance-sheets by mortgage-related securities, sell assets. In doing so, they exacerbate the problem. Forced sales push down the prices of assets, worsening the balance-sheets of other investors, forcing more asset sales, and so on.

IOW, the current deleveraging is the inverse of the former leveraging.

[TigerLikesRooster]

Yes, it always works that way. The same mechanism going in reverse.