These two web sites show that my reasoning is sound about why the REIT CEFs are tanking, although one discusses bond funds.  The concept is still applicable to other leveraged CEFs.  Meeting SEC mandated capitalization ratios threatens the integrity of leveraged CEFs because selling off worthwhile underlying assets might be required.  Unfortunately us investors in leveraged closed end funds are probably victims of the big Wall Street crooks who looted the country with the likes of worthless mortgage securities and related derivatives.

http://www.kiplinger.com/columns/balance/archive/2008/balance0220.html

http://www.boston.com/business/personalfinance/articles/2008/05/27/hub_fund_managers_unfreezing_clients_cash/