It can vary, but in my limited knowledge it usually occurs during periods with rising inflation and/or after over extensions of credit to people who believe they would be able to pay it back because the markets/jobs and such appeared to be doing well for them at the time. Let’s say you loan someone $400,000 for a house, they take it because they want a house and have a steady job. Now you do that 600,000 more times… all is well you are getting paid. Amazon says they are going to lay off 650,000 people because they think they can replace those jobs with automation. Now you have $240,000,000,000 that those people can’t pay you back for, and the job market looks rough, so with demand high and supply low, they can low-ball you on salaries if you can find a job. People trying to get a loan at that point will get hit with higher interest rates because they are worried they won’t get their money back. People hit financial issues and normally they refinance their house to take out equity they have already paid into it, but the interest rate of the refinance would be so high it will wind them up further in financial issues. People are pulling their money out of investments to pay off debts or keep themselves from going under. If new investments don’t come into companies stock buyers don’t make money, so it’s best they invest in something else if they can, so they won’t want to invest, and maybe pull their money out while they can, as the market crashes and shit tons of money are lost across the board.