In the 1987 crash, there was an accelerator mechanism via portfolio insurance. Basically, Rubinstein, Leland and O'Brien got a bunch of investors to buy into portfolio insurance, which would sell securities as prices fell, emulating a put option position. In the crash, this just made things drastically worse.
But it seems hedge funds adopt this sort of strategy. Several prominent hedge funds moved to cash recently: Steven Cohen, Israel Englander, John Paulson. That's a lot of money selling equities, buying yen, etc. No wonder such disparate popular hedge fund trades: long oil, the carry trade (long Aussie dollar, short yen), equities. They were all being unwound.
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