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OK, no problem.

While there are some of us who are somewhat more experienced in the market and are paying attention to a trading terminal throughout the day, most people aren’t. So this wasn’t a run created by the retail investor.

Hedge fund managers, however, are paying attention all day, every day. Asset managers (ie, running managed accounts for high net worth people) are in the trading terminal all day. Managers at investment banks, brokerages, etc - all paying attention to the same news feeds - they all have Bloomberg terminals on their desks. If they’re watching CNBC, it is with the sound down, mostly for the view of the tight, low-cut sweaters, not any news content. The Bloomberg terminal is their real news and analysis feed, and this is what almost all professionals use. If you get to see a Bloomberg terminal, check it out. It is a very, very powerful tool and when you see what is available, you’ll see how the professionals are much better informed than the retail investors.

My point is, most professional money shops are all using the same source of news.

The Bloomberg terminals had been coughing up a steady stream of headlines stemming from the Lehman collapse since the night of Sunday, Sep. 14th. When people came into work on Monday morning, I’m sure they were already looking like deer in the headlights. It had finally happened - one of the Big Five investment banks - over 150 years old - went down in flames in the space of a couple weeks. Probably only 10 days prior, the thought have been so inconceivable, that most people who didn’t know the debt portfolio of Lehman would have laughed it off.

eg, look at people like Jim Cramer telling his viewers that they’d be crazy to pull their money out of Bear Sterns... only days before it went under.

When Lehman tipped over, and word went out that the funds broke the buck the next day, fund managers all over the country started looking at what money market funds they were using. Hedge funds especially, because European and UK hedge funds had been burned BADLY earlier in the year by a money market fund in Europe taking severe losses from having client money in illiquid debt investments which tanked.

As soon as word went out that Reserve broke a buck, the pro’s acted independently, but all with the same thought at the same time: “Holy *(&^*&^ - we can’t trust ANYTHING. SELL. NOW.” They had been primed for this by Lehman tipping over - and Lehman was counterparty to a whole lot of bond transactions. AIG was teetering - and they were insuring a whole lot more paper.

These “professionals” all think alike. I say “professional” in quotes because one of the marks of distinction that “financial professionals” like to claim is that they’re the “smart money.” This, it turns out, is far from the truth. They offer very little unique between each other. Many of them went to the same schools, have the same degrees, studied out of the same textbooks. They largely think alike - which is what got us here in the first place, after all — too many of them chased yield, believed that borrowers with low FICO scores could somehow pay down their mortgage in a way that resulted in a “AAA” rating by virtue of being deadbeats from all over the country combined into one CDO. That sort of thinking.

It was a whole lot of “financial professionals” who got us into this jam. It wasn’t the retail investor. It was people who like to call themselves “financial engineers” and the like. Never mind that real engineers wouldn’t have allowed this much risk to build up in the system. They like to call themselves “financial engineers” because it sounds cool — like they’re designing something slick — sorta like a banana peel on a linoleum floor, I guess.

So when you get a bunch of people like this, who think alike... and they see the same event (one of the oldest money market funds in the US breaking a buck), from the same data/news source, they all do the same thing at once: sell, sell, by God sell NOW.

No co-ordination, no conspiracy, no need for Freemasons, Jews or Illuminati need to be involved, and while I’m sure there are more than a couple Masons or Jews working on Wall Street, they weren’t doing all this selling after meeting at the lodge/temple for three-whisky or three-martini lunch, hatching a plan and then going back to their desks to bring down the world around us.

This was just blind, herd-mentality panic.