Posted on 01/17/2010 7:22:01 AM PST by opentalk
Sixteen months after the 11 a.m. simultaneous withdrawal of billions of dollars out of money market accounts in the aftermath of Lehman’s demise a few days earlier, no one seems to care about the dimensions of this event.
After all, this catastrophic event did not have quite the physicality of say an actual bank run.
There were no investors standing in line waiting to take their money out for Americans to see just who they were—from what country, wearing what kind of clothes, honest or squirrelly looking, working in tandem with each other? Just computer generated orders simultaneously withdrawing billions of dollars adding up to $550 billion within about an hour.
And, certainly, if it were an act of economic terrorism, which no one seems to have the imagination or cojones to raise, the visual is not there. No Boeing 737 ramming into the Twin Towers, bursting into flames, innocent victims burning alive jumping out the windows to their death, prior to the buildings’ collapse into rubble.
But, make no mistake, this electronic run on the banks of Sept. 18, 2008, was every bit as catastrophic, with numerous victims.
Sure, it could be pure coincidence that exactly at 11 a.m. a wave of concerned investors all decided it was time to electronically withdraw their funds thus creating this crescendo drawdown effect setting in motion a worldwide panic. It could be coincidence. But, it’s doubtful.
The fact that the identities of those who simultaneously decided to withdraw their money at 11 a.m. on Sep. 18, precipitating this panic, were never released, does lead one to question whether or not something sinister was at work.
Is there no one else with even the vaguest curiosity to ask if it was a coincidence or not? And, to suggest maybe an investigation is in order to deliver that vaunted “transparency” that voters seemed to believe they would get after the 2008 elections.
If nothing sinister was at work, then why so much secrecy concerning the destination of this $550 billion in money withdrawn on Thursday, Sept. 18, and those responsible for redirecting these funds out of the U.S. money markets.
Surely the money didn’t go back into the American economy.
No, $550 billion was drained away from the American economy, the consequences of which we suffer to this day.
The exact contours of this event were described by Rep. Paul Kanjorski (D-Pa.) on C-SPAN on Wednesday, Feb. 11, two days after the 200th anniversary of Abe Lincoln’s birth.
An enraged caller had just erupted over the ill-advised $700 billion bailout a few months earlier and Rep. Kanjorski felt pressed to reveal what Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke had told Congress behind closed doors, which so shocked them into supporting this mind-bogglingly huge bailout.
“On Thursday [Sept. 18, 2008] at about 11 o’clock in the morning,” Kanjorski began, “the Federal Reserve noticed the tremendous drawdown of money market accounts in the United States to the tune of $550 billion dollars being drawn out in a matter of an hour or two. The Treasury opened up its window to help. It pumped $105 billion in the system and quickly realized that they could not stem the tide.”
At that point, officials realized, Kanjorski relates, “We were having an electronic run on the banks.”
In response, Kanjorski continued, “They decided to close the operation, close down the money accounts and announce a guarantee of $250,000 per account so there wouldn’t be further panic out there and that’s what actually happened.”
And, if nothing had been done, Kanjorski revealed, “their estimation was that by two o’clock that afternoon, five and 1/2 trillion dollars would have been drawn out of the money market system of the United States, would have collapsed the entire economy of the United States and within 24 hours the world economy would have collapsed (which would have meant) … the end of our economic system and our political system as we know it.”
Kanjorski concluded, “Someone threw us in the middle of the Atlantic Ocean without a life raft. And, we’re trying to determine which is the closest shore, and whether there’s any chance in the world to swim that far. We don’t know.”
But why is no one in the least bit curious to know who that “someone” is who “threw us in the middle of the Atlantic Ocean without a life raft”—the consequences of which have so damaged our economy’s job-creating engine?
This writer, for one, would like to know.
Ping
Oh good grief. It wasn’t a conspiracy. It wasn’t terrorism. It’s not even a secret.
The money was withdrawn because one of the larger Money Market companies “broke the buck” because the manager was investing in risky securities instead of in safe products.
Since Money Market accounts weren’t insured back then, everyone panicked and withdrew their money so that they wouldn’t get stuck with the loss.
That’s why there was a massive electronic run.
Really, some of you people are looking for conspiracies as if they are Easter Egg hunts.
http://latimesblogs.latimes.com/money_co/2008/09/the-credit-cris.html
Soros shorted the USA after driving crude to $140 per barrel. Can anyone say October surprise?
It is impossible for the transactions that drove this withdrawal to remain anonymous. I find that the timing of the withdrawals seem to coincide with a surge of john McCain in the polls. We, the American people need to know where these orders to withdraw originated and where was the money transferred to. If the economy can be blown to bits by actions such as this, we need to know so it cannot be replicated in the future. Perhaps, we will see a replay of this for the 2010 elections.
Sunlight seems to be the only way to change it. The Fed has to know, which makes it even more disturbing.
btt
I only saw a small blurb about it way back. I have always wondered who stole the money.
It described the events of early in 08 including Schummer causing the run on Indy Mack and the Feds setting a precedent of saving the banks as well as some other curious events before Sept. 18th.
It's also curious to note that the events of Sept. 18th all but guaranteed zer0's election as it was just 6 weeks before people voted.
We got set up for a commie takeover, no doubt in my mind.
I wonder if a FOIA would apply.
I didn’t know we were all suppose to be finance experts. /s
During the spring and summer of 2008, when someone explained to me how shaky the underpinnings of traded short term deposits were, I made sure the money market component of my modest brokerage account was transferred to my bank (FDIC checking account) and essentially did the same with variable annuities by making sure that there was little or no “fixed” or bond component in the funds selected. It turned out that only about $3,000 was at risk, but what the heck, anything not FDIC insured should be looked at carefully in these hazardous economic times.
The brokerage money market rates are sometimes negative even now, partly, they tell me, because of the expense of SEC paper work, prospectuses, etc.
Someone/something is too big to be exposed, too big to be investigated. We the people are no longer the sovereigns. We are the subjects living under a federal oligarchy.
Remember all the snide cynicism on FR about conspiracy and the tin foil hat crap.
There are very sinister things going on, and the Media is complicit. John McCain was a red herring.
The solution is quite direct - Dismantle the revenue and authority of the US Federal Government to the Constitutional level originally intended. And don't allow illegal immigration. There will still be a "united states," but within those parameters the States, the Communities, the Family, the Individual, can prosper, dealing with our own decisions. For education and social services that pathway is obvious.
Goldfinger?
No honey, you’re just supposed to know to go to google.com and type in whatever it is that you are questioning.
That’s all that I did. One google search and I had the answer to why there was a run in September of 2008.
It’s like going to Snopes whenever you get a conspiracy chain email letter.
It’s really easy to do research in the Internet Age.
The money this article is talking about was transfered out of the US, though. I think.
Why at 11:00 on the 18th? The blog you link was written on the 16th.
Out of no-where, in the space of less than 2 hours, the Federal Reserve noticed a tremendous drawdown of money market accounts
A Contrived Crisis? - You Decide
http://www.canadafreepress.com/index.php/article/8713
I'm sorry I no longer have any of the threads that referenced the French beginning of the market collapse .I am posting from memory, which is the reason for the (?)s. I remember that a Freeper (was it you?) mentioned it some months back in rebuttal to a conspiracy theory post blaming Soros and other conspirators for taking out money to create a BHO victory.That poster stated that since August, s/he and other coworkers had been braced for an electronic run-that the markets were so fragile that anything might set off the run, and then the run would snowball as everyone would try to get out first . Then the event to which you allude took place, and the rest is history.
I am sorry now that I did not save that freeper's post, as I am not in any way, shape ,or form in the markets, and so I can only post what I can recall of a post I read ages ago. :-(
That’s the one, thank you~
Color me paranoid. Was this current crisis manufactured? I don’t know. Does the possibility exist? You decide.
* Six months later, Jan 2, 2009, a seven-member group of investors agreed to buy the remnants of failed lender IndyMac for $13.9 billion. Other investors included a fund controlled by billionaire George Soros’ Fund Management
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