$500 billion in writedowns and losses on securities tied to subprime mortgages since the start of 2007, according to Bloomberg. In 2007, Goldman economists predicted $400 billion of losses would cut banks’ lending by $2 trillion.

“There are deflationary events out there and debt default is one of the primary drivers. It’s what they call a debt deflation cycle, and there’s definitely one underway.”

—Jeffrey Gundlach, chief investment officer at Los Angeles-based TCW Group Inc., which oversees $90 billion in fixed-income. The percentage of Treasuries in a diversified bond fund Gundlach manages is the highest it’s ever been, he said.

“There’s a huge amount of deflationary pressure when you get this kind of capital destruction”

—Brian Edmonds, head of interest rates at Cantor Fitzgerald