Posted on 02/11/2009 3:03:27 AM PST by Halfmanhalfamazing
RUSH: I want you to listen to this, Paul Kanjorski. He's a Democrat member of Congress from Pennsylvania. He was on C-SPAN's Washington Journal on January 27th.
KANJORSKI: On Thursday at about 11 o'clock in the morning --
RUSH: Stop the tape a second. Go back and recue this. He's talking about September the 18th here. Let me tease you even further. September the 18th is the day last year that the world economy almost came to an end. Don't smirk. It's true, Snerdley. That's what Kanjorski is saying. So he's talking here about Thursday, September the 18th.
KANJORSKI: On Thursday at about 11 o'clock in the morning the Federal Reserve noticed a tremendous drawdown of money market accounts in the United States, to the tune of $550 billion was 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; we were having an electronic run on the banks. 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.
RUSH: Do you remember this? This is the day I think that the Atlanta banks ran out of one-hundred-dollar bills. But now stop and think of this: A $550 billion withdrawal from money market funds in one-to-two hours. I am convinced -- and there's one more sound bite to go here -- I am convinced that this is what they took to the White House and said to President Bush, "We have got a disaster, you have got to get on board with a bailout," which came later on in October, "you've got to get on board with this $700 billion, the TARP 1," all because 550 -- now, what precipitated this? Here's the second Kanjorski sound bite.
KANJORSKI: If they had not done that, their estimation was that by two o'clock that afternoon, five-and-a-half 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. It would have been the end of our economic system and our political system as we know it. We're really no better off today than we were three months ago because we've had a decrease in the equity positions of banks because other assets are going sour by the moment.
RUSH: Now, this is January 27th, Kanjorski is talking about this, and we have to allow, since Kanjorski is a Democrat he's part of the Pelosi team, we have to allow that some of his comment here is being flavored. When he ends up saying we're no better off today than we were three months ago, some of this is obviously oriented toward panic and getting people to go along with the bailout today, but let's leave that aside because that's traditional Democrat Party politics. If they had not done that, if that $550 billion-dollar withdrawal in an hour or two had not been stopped, if they hadn't closed the windows, he says that five-and-a-half trillion would have been drawn out of the money market system of the United States. Now, when I hear money market I think of savings accounts, higher interest rates than passbook savings at the old downtown building and loan where people park their money temporarily 'til they decide where to put it permanently. He says five-and-a-half trillion would have vanished from the banking system, would have collapsed the entire economy of the US and within 24 hours the world economy would have collapsed.
Now, we've gotta allow here for some exaggeration. It's amazing this was said on C-SPAN on Thursday, January 27th, and nobody picked up on it. We got it from a website called LiveLeak. They were rummaging through things, and they found this. Now, let's assume for a second here that elements of this are true. Let's assume that there was a $550 billion run, electronic run on the banks and money market accounts in one to two hours. The question is who was doing this? Who was withdrawing all this money? And the next question is why? That's where my mind starts exploding, and this is dangerous to have these explosions going this way. Could it have been George Soros? Could it have been a consortium of countries -- Russia, China, Venezuela -- countries that are eager to have Barack Obama elected because they know that will make it easier for them to continue their own foreign policies in the world? In the meantime, five-and-a-half billion dollars in one to two hours, that can probably be confirmed. The five-and-a-half trillion is speculation based on the rate at which money was coming out. We could check that the Fed stopped the trading windows, they closed the window. We do know they were pumping money into the system left and right. And remember when the Federal Reserve loaned elements, $2 trillion and we weren't told who got the money? And we still haven't been told who got the money.
We know that last fall, the Federal Reserve lent $2 trillion to somebody or a series of somebodies, and we still don't know where it went. We know last year that we had a crisis on our hands and everybody was saying if we didn't do this today the country was finished and they got Bush on board, they got Paulson on board. Obviously this kind of news, if somebody from the Fed shows up and Bernanke and Paulson say, "Hey, we got a chance here of losing five-and-a-half trillion dollars if we don't do something," I mean that's gotta scare anybody into some sort of action to stem the tide. RUSH: We have an AP-Obama story here that targets the date of this run on money market accounts to September 16th. It was Kanjorski on C-SPAN on January 27th, said it was Thursday the 18th. Here's the AP story: "A money-market mutual fund that 'broke the buck' amid a rush of orders to pull out cash has begun returning an initial $26 billion to investors who had been unable to access their money for more than a month. ... On Sept. 16, the rapid sell-off of assets caused the value of fund assets to fall to 97 cents for each investor dollar put in -- the first instance in 14 years of a money-market mutual fund 'breaking the buck,' or having its per-share value fall below $1. Reserve Management froze redemption orders. That led institutional investors to pull out cash..." I think both dates are right. September 16th, the rapid sell-off begins and "[t]hat led institutional investors to pull out cash from that fund and others, creating fears about the safety of the $3.4 trillion in assets held in money-market funds, and a new temporary government money fund guarantee program.'" It's sort of just a casual, hey, no-big-deal kind of story from the Associated Press -- and here again is Kanjorski talking about this. Let's go back to these two sound bites, Paul Kanjorski (Democrat-Pennsylvania) on C-SPAN's Washington Journal on January 27th.
KANJORSKI: On Thursday at about 11 o'clock in the morning, the Federal Reserve noticed a tremendous drawdown of money market accounts in the United States to the tune of $550 billion was like being drawn out in a matter of an hour or two. The Treasury opened up its window to help. They pumped $105 billion in the system and quickly realized that they could not stem the tide; we were having an electronic run on the banks. 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.
RUSH: By the way, I should tell you that Kanjorski's source for this is none other than Bernanke -- Ben Bernanke, the Federal Reserve -- and the Treasury secretary, Hank Paulson. They are the two figures that told members of Congress what was going on with this initial run of $550 billion, an electronic run on the banks, money market accounts, investor accounts here. He goes on to say this, if they had not stepped in to stop this, if they had not closed the window...
KANJORSKI: If they had not done that, their estimation was that by two o'clock that afternoon, $5-1/2 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. It would have been the end of our economic system and our political system as we know it. We're really no better off today than we were three months because we had a decrease in the equity positions of banks because other assets are going sour by the moment.
RUSH: So the last part, I think that's just salesmanship for doing something now to get the stimulus bill passed, although Kanjorski is among some Democrats starting to shift to the cant that more time is needed to make a correct decision this time; which I think is one of the reasons Geithner postponed his announcement to today from last week or even today. So, you know, I have been suspicious of all this that happened last fall. It just seemed too perfectly timed. Now we know that these are not individual money market accounts like you would have had to withdraw your money. This is money invested in a mutual fund money market account. So it is quite possible somebody could have started a run on this thing and the word spread, and it did -- and the $550 billion withdrawal in one hour would panic anybody. So there's so much to this. You know, it's always the case that there's so much more going on in all this that we don't know. The Drive-By Media, any longer, is worthless in ferreting out the truth involved in events. They totally exist on the surface. They exist with a path of least resistance particularly with Democrats in power, because with the presumption that Democrats could abuse power or commit ethics violations just doesn't even cross the radar. It doesn't even show up on the radar. It's not possible for Democrats to behave in that fashion, and so all this stuff goes on below the surface and we find out about it much later after the fact.
$100 bills are subject to much scrutiny.
Most people will accept a $20 bill, but a $50 or $100 will get the Governmental highlighter swipe.
Plus one soldier FReeper informed me that a $20USD is accepted worldwide.....just in case you decide to flee to a Country where democracy reigns.
My mind is open to evidence of a Soros hit on the market...I don’t see it right now, but I am always open to new evidence. I wold like to see it investigated then devolve into a yet another conspiracy theory...
Explain the part of Kanjorski’s comment that it happened over the period of a couple of hours?
Even SNL had a skit that implicated Soros....It was pulled in two days from public view.
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.
I can not see the “panicked people” of this country coming together in an 1 1/2 to 2 hours to pull this off. It doesn’t make the least bit of sense. We all need to demand that our government tell us the truth.
It was pulled because the two people (a couple named Herb and Marion Sandler) who had sold a sub-prime origination bank in California (Golden West Financial, purchased by Wachovia in one of the most stunningly stupid deals of the sub-prime melt-down) threatened to sue NBC for libel, not because of Soros. The Sandlers are not “public” people, so NBC’s parody of their sale of the bank, and the subsequent melt-down of Wachovia being presented as being the fault of the Sandlers was libelous.
Sit in front of a trading terminal some day.
You can see dozens to hundreds of actors on Wall Street act in concert with no more co-ordination than the price and volume movements they see on the screen in front of them.
My wife and I were part of that near collapse.
I got word about the money fund in trouble on 9/17, the first warning may have come from this site.
I immediately put a sell on a large amount of our Fido regular money funds and their federal reserve money fund in our IRAs.
On 9/18, the money was dumped into the short term, medium term and a few long term CDs that we could buy via Fido.
On 9/18, I cashed out enough cash from our remaining money markets to handle the bills and extras into this month and had it deposited into our checking acct, in case the system crashed. As soon as that cash arrived, it was transferred to a internet bank with a high interest CD on the internet. That will be closed out this week as their rates are dropping and some other flags showed up.
The evening of 9/18, I convinced my wife to roll about 98% of her current 401k into her Fido Ira to buy Cds, Gld and other hopefully more secure paper. That process took until Mid November. All of her 401k was in the money markets due to the stock hits in July 2007. In May/June of 2007, because of the Pelosi/Reid bs, I had tried to convince her to get out of her 401k’s mutual funds. She didn’t want to do it as the funds I had picked for her had a good run. We went on a cruise the first part of that July, and she lost about 10-12% per fund in less than two weeks. So we moved all of her 401k into their money fund.
This August, we bought a fair chunk of GLD in case total disaster happened. She has added more since then. Through her job, she knows a successful investment couple for themselves and the formerly rich winos. They got totally into GLD and hard gold from Aug through November and have the rest in CDs in various banks.
We both own the following etf’s with sell orders changed at least once a week to protect any major losses: SHY, TlO, LTH.
When the inflation cycle starts to kick up, after this kamakazi bailout, I may sell TLO/TLH and buy TIP and ETF’s that short the DOW or S&P 500.
But it certainly does make sense.
Good advice the $20’s.
We will start storing and hiding a few $20 bills each week.
They are easy to get from the ATM. So we will just add a few extra 20’s each time we use our ATM for cash, about 4 times per month.
Maybe it was both. A coordinated blow and actions by a lot of investors like me with a few bucks in our IRA money funds.
Below is a little summary of my actions that day and the next day. I’m that I was not by myself. Also, I’m not on George $oreA$$’s special email list.
http://www.freerepublic.com/focus/news/2183027/posts?page=131#131
But the conspiracy!! Such fun!!! Anyway, thank you for your thoughtful response.
Remember reading about short selling originating in Pakistan, India or Indonesia shortly after all this happened....Is there information out there regarding this or was it just talk.
SOROS and friends
I can not see the “panicked people” of this country coming together in an 1 1/2 to 2 hours to pull this off
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Of course not, why is the government hiding it. We have a right to know.
I understand that. I still can’t see $550 Billion going that fast in such a short amount of time. Maybe it can happen but why has it never happened before?
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