The Big Picture author Barry Ritholtz argues that the November US stock market crash was caused by mechanical forced liquidations of quantitative funds, not political reaction

Barry Ritholtz is the author of the independent blog 'The Big Picture' and has long been critical of financial media's habit of post-hoc attribution. In his article published on November 9, 2026, he offered an explanation for the massive sell-off in the United States stock market last Thursday that stood in stark contrast to the mainstream narrative.

His core judgment was that the true driver of Thursday's crash was the forced liquidation of crowded leveraged growth positions within multi-strategy hedge funds (commonly known as pod shops), rather than election results.

The structure of these funds warrants further elaboration. Institutions such as Citadel ($77 billion in assets under management), Millennium ($98 billion), Point72 ($55.5 billion), and Balyasny ($37 billion) are composed internally of hundreds of semi-autonomous trading teams—known as pods—that share a centralized, real-time risk control system which automatically triggers hard stop-losses when drawdown limits are breached.

Barry Ritholtz identified three potential triggering factors and provided his own prioritization. First were rumors regarding ING's sale of approximately $500 million in data center loans—he explicitly believed this alone was insufficient to cause panic but acknowledged that sometimes all it takes to ignite a room full of flammable gas is a small spark. Second was the rebalancing of leveraged ETFs, estimated at around $50 billion to $58 billion. Third, and what he considered the most significant factor, was the large-scale forced liquidation of leveraged growth positions by major multi-strategy hedge funds.