This does not change the fact that the amount of money in the system stays the same.
Before "somebody" lost their job and sold their stock, there were X people holding Y dollars. Afterwards, there are still X people holding Y dollars. Nothing changed. The amount of money available to bid on stuff is still the same. Both, the sum of money and also the average amount per person.
> Before "somebody" lost their job and sold their stock, there were X people holding Y dollars. Afterwards, there are still X people holding Y dollars
Maybe it's better to think of it as X-1 people holding Y+1 dollars :P
But really, I think the above poster answered your question with this bit:
> This adds downward pressure on the market since people must sell
Prices go up when you bid higher than the current price for something, and conversely they go down when you bid lower than the current price.
When someone sells in these situations, it means the current average price has dropped.
Also sometimes, when people are desperate to sell, they can really lowball the value of something causing its overall value to depreciate significantly.
The quantity of money in the system doesn't stay the same. Speculators buy financial assets such as stock and real estate on credit. This increases valuations and causes more speculators to buy financial assets on credit, or at least stop paying back their other debts as fast so they can hold more assets, to capture asset price gains. When the process slows down eventually the expected asset price gains will be lower than the interest owed on the debt, causing a sell off.
Depreciation of assets like stocks and real estate will lead to a reduction in value in our portfolios, but not necessarily a reduction in the money supply. Money supply is only one factor here.
Before "somebody" lost their job and sold their stock, there were X people holding Y dollars. Afterwards, there are still X people holding Y dollars. Nothing changed. The amount of money available to bid on stuff is still the same. Both, the sum of money and also the average amount per person.