Jim Cramer examines the triggers for last week’s “opaque” sell-off

CNBC’s Jim Cramer on Monday looked at what might have led to last week’s massive selloff, telling investors that the declines could have been facilitated by failed market strategies by larger institutions.

“What happened when the market crashed a week ago? Why is everything so opaque?” he asked. “Simple: Nobody in this business needs to talk about how they screwed it up, how they just didn’t know what they were doing and lost a lot of money and caused your portfolio to suffer as collateral damage.”

The Dow Jones Industrial Average posted its worst day in nearly two years last week as investors sold megacap tech stocks that had been Wall Street’s darlings for the past several months. Japan’s stock market also fell sharply, with the Nikkei posting its worst day since the “Black Moon” crash of 1987. But stocks bounced back later in the week, largely recouping losses.

For Cramer, last week’s declines could have been caused by money managers at a variety of firms using Japan’s low interest rates to borrow money and invest in other global assets. Those investors were then taken by surprise when the Bank of Japan issued two installments, he said.

Those investors then had to sell substantial socks because “they were playing with cheap money that suddenly became a lot more expensive,” he added.

“We’ve had so many sell-offs based on misguided strategies by large institutions,” Cramer said. “Let’s think back to last Monday’s sell-off and think that it might have been nothing more than the money managers shaking things up, which is often the case with these big market crashes.”