The author of the story which I am now pinching, Andy Kessler, also cites mutual-fund and hedge-fund redemptions as another source of wanton dumping. I have written about this in Shecomonics, the investing series I am publishing on this site. Redemptions in October amounted to tens of billions of dollars, and it has clearly continued into this month.

The impact of such selling by hedge funds is magnified by the leverage or borrowings used by those investors. If a college endowment, for instance, wants to redeem one million dollars, the fund may have to jettison three or four times that amount to maintain a certain ratio between holdings and borrowings. In the past week some SEC hedge-fund filings have become public. They show that, for instance, Tudor Management’s positions in U.S. shares dropped from $5.7 billion to $453 million – in one quarter! SAC Capital Advisors reported that its holdings of U.S. stocks dropped in half and Atticus Capital reduced its stock positions from $8.1 billion to $510 million. Pretty dramatic, and very, very harmful.

There are also margin calls in any period when share prices drop so calamitously, and we are seeing some of that as well. Kessler cites Sumner Redstone’s forced sale of $400 million in Viacom and CBS to repay the debt he had borrowed to buy them.

So, there are a lot of reasons for the carnage. Kessler concludes that these pressures will linger until February. He may be right, though honestly I cannot imagine that the market can go much lower (but I would have made that case last week, too).

I do think we are suffering a complete absence of leadership — in the White House and in Congress — that won’t end until Obama takes office in January. Let us all hope and pray that he is ready to take on this mess, that he surrounds himself with smart and practical people, and that the nation is cheered by the transition. I’m ready for good news … aren’t you?