Markets that are forced to deleverage simultaneously (from margin calls or redemptions) experience non-economic forced liquidations where participants sell safe assets like Treasuries just to raise cash, violating the assumption that safe assets provide portfolio diversification. This happened in March 2020 when Treasury yields spiked despite being traditionally safe havens.
causalpending
Speaker
Corey HoffsteinEvidence Quote
“when you might hear about people degrosing and forced degrossing and technical flow in the market this is some of the stuff we're talking about that when markets move faster margin calls start to happen and people are force liquidated and these are sort of non-economic transactions that can move markets very violently”
Created: 8/11/2026, 1:31:56 AM
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