“In the last week people have had to meet margin calls by selling equity positions. The quant strats [quantitative funds] have been hit hardest and it’s become a bit of a perfect storm. Prime brokerages are increasing margin requirements so you have a self–fulfilling prophecy and spiral down,” said one senior banker.

So that’s clear then. Explanation courtesy of Daily Telegraph.

For a less elliptical account, see Irwin Stelzer’s column this morning.