No, it was a panic.
A money market fund, Reserve Primary Market Fund, (ticker RPFXX) “broke the buck” as a result of having to write down over $700 million of short-term commercial paper from Lehman to zippo. The NAV of the money market shares fell to $0.97.
At that point, all assumptions of how safe money market funds were were broken. The previous assumption had been that money market funds were as safe as cash. RPFXX held about $60B when this became public, but the size and scope of Lehman’s paper holdings throughout the bond market suddenly made a lot of people no longer trust money market funds in a fat hurry.
It was at this point that Treasury came out with a policy of guaranteeing the value of any money market fund in the US.
So where is the 700 million, and WHY THE HELL AIN’T THOSE PEOPLE IN JAIL?
I remember that day now. Fidelity sent me an e-mail advising me that my MM was now insured. that was the only reason I left my money in. I was ready to pull it out back then. Actually, if it wasn’t FDIC insured right now, it would all be in my safe.
The only way to discern that is to see just who did the withdrawing. If it's a large number of entities representing the typical cross-section of the market, it might be panic. If it was orchestrated by a few hundred entities with similar political goals, then it was not a panic but a deliberate move to upset the apple cart (which arguably has been prime for an upset).
We need more data.
Agree with you.....it was panic, plain and simple.
Conspiracies take too many people keeping too many secrets to be prevalent.
Explain the part of Kanjorski’s comment that it happened over the period of a couple of hours?