Those that have money like to put that money to use by buying and investing in such common things as real estate, bonds, and equities, in which, more years than not, these investments appreciate in price, and because most people equate a stock that ends the trading day at $100/share to have the same value, (i.e. as a $100 bill in their hand), we have a strong tendency to take all of our assets and equate them to their monetary value, believing implicitly that they are worth that amount of money and therefore if we magically had to liquidate our assets, they would be worth their present value in dollars. While the foregoing certainly makes sense, it definitely would not be true, in times of an intense crisis, which invariably happens, often unexpectedly from time-to-time.
When looking at the stock market, most days for most stocks, there isn't any real news, yet, these same stocks somehow are able to trade up and down each day, as if there is news, still for the most part, on non-event days, most stocks stay within a fairly narrow trading range, which usually is depending upon that particular stocks' typical volatility, within the basic range of the direction of the market that day. All this serves to sell the illusion that stock prices, as well as bond prices, as well as housing prices, are stable, sensible, and take into account all the information that is available, so the pricing of such is market efficient.
What is often overlooked, is that significant global events can have an incredible impact upon investments, for instance, if North Korea was to drop a nuclear bomb on NYC, there would be a massive crisis, so too, unexpected economic events, such as a major country, for instance, China, were to take its currency and re-evaluate it significantly either up or down against America's dollar, doing so, could easily create financial havoc, which would take a period of time to sort out. Then again, a catastrophic natural disaster that took out a major city such as Tokyo, would also equate to enormous financial upsets. Additionally, markets that appear to be humming along naturally can crash, unexpectedly, in just one day, as the Dow Jones crashed just over 22% on October 19th, 1987.
In today's world, interest rates have been at historic lows for a decade, which means, that investors of all stripes have had to find other avenues to make money on their capital, as opposed to parking it in cash instruments such as CDs, with certainly two of the most prominent areas of investment, being real estate and equities. Additionally, in order to make money on investments, many sophisticated players use leverage, or the borrowing of capital at these same historic low rates, to "boost" their returns on their investments. In addition, there are ETFs which have been created for the purpose of juicing their returns by advertising that they represent 2x or 3x returns of their underlying asset, such as the S&P 500 index. When everything is going up or is fairly stable, everybody is happy, but things don't always go up, and things can change within very short periods of time.
When, indeed, a crisis occurs, as it invariably will, all those that have leveraged up, are trying to find the exact same exit, and when the selling ratio far exceeds the buying ratio on investments, the new stabilized price of that investment, is akin to catching a falling knife, and thereby those assets, those prices, that people and institutions have assumed are solid, will instead be seen to be far more ethereal than ever imagined or feared.