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.
My guess is some dem PR firms were in on it - you know - they guys who get dems elected... They would play it like it was some kind of hoot pulling the rug out from under George Bush - just like they did with his dad over the "no new taxes" thing. Both Bush's have kind hearts - think "powerful soft touch" types.
The folks who play on pity are the sociopaths - and I can just see Bush and his concern for people losing their homes and 401K's and pensions and wanting to "help". He's a good man - the people feeding him the crap were not.
Bush is a sociopaths' dream - a powerful soft touch with deeper pockets (taxpayer money) than anyone on the planet.
Just the kind sociopaths are drawn toward...
Obama might be another soft touch - he's being rolled - with his assistance - bankrupting his chance of fulfilling his programs after paying congressional dems to get all their chits in...
Then there's big incentive for bankers who have a clue ( just like they knew NOT to invest with Madoff) they'd figure this one out. To say anything would be to ask for destruction... Bankers are easy to play but they know the game. And they've been both rewarded - and double crossed. Things might get interesting.
>>Remember, we are talking about money market money, which is considered cash by many, so it needs to be parked somewhere, but where?<<
For a very short time, there were a lot of lumpy mattresses.
And finally, light is shed on the phrase “Go to the mattresses.”
I always love your posts!
When my hubby and I were interviewing investors, I told the guy the only thing I knew about was Socks & Socks. Being a brilliant broker of Merill Lynch, he stated he did not know about Socks and Socks.
I had to inform him that you fill one sock with money, hide it in a safe place and start another. That unfortunately, my father had large feet so we only got to Socks & Socks before he passed.
My husband looked at me like I was crazy, but that was how it was after WWII.
Lesson not learned.
Sleep tight and what ever you do, don't put your cash in the oven. We ladies can bake you a roast at the strangest times. At least the freezer means you have to thaw the stuff out!
LOL
Actually, you could see what they did in the market: they bought short-term T-bills. They bought them so hard, they drove the yields down to zero, and for a half day or so in October, the yields went negative.
That’s panic, that’s fear. When people who need a place to park millions don’t trust “cash equivalents” and they want the *explicit* “full faith and credit of the US Treasury” - with very high liquidity, they buy US T-bills or US Treasuries.
OH — OK, sorry, misunderstood.
Corporate bonds - the right corporate bonds - are probably a good investment right about now.
What’s “the right corporate?” Well, nothing in financials, nor in consumer discretionary - like auto companies.
I’m starting to sniff around bonds from companies in heavy industry with good track records, big tech, biotech/pharma... things like that.
There are some people putting out ‘buy’ recommendations on muni’s, but I’d want to avoid certain states - like CA, LA, NY, NV, AZ, MD, MI, OH, etc...
BOL.
Also, never hide your loaded pistol in an oven or micro wave.
“OK, Dave, the lion’s share of the damage was done by 220 entities within 1 hour. Now as a sweet, open-minded, reasonable, even-tempered, fair, non-pre-judgemental, polite, scrupulous, and equitable man, I say we waterboard this Soros sonofabeech until he talks.... and then turn his soaking butt over to Vladimir Putin for some serious fact-finding, before working over every member of his family.”
That appears to preplanned re deposits and the rapid with drawal. You know how I feel about $oreA$$. He deserves to be abused, gored and eaten by starving wild Russian Boars.
“At that point, I will personally interrogate you mercilessly at Pete and Shorty’s, plying you with spirits, until you tell me EGGZAKLY what you did with your IRA.”
It is very simple. Bank CDs, we kept most of the holdings of two mutual funds, and GLD, TLO, TLH, SHY and recently SLV. I promise to tell all when you ply me with some east cost seafood like lobster, good micro beer and never mention Zer0.
The solid economic growth myth of the past few years is republican crap talking points( Hannity still repeats this on his show) . It was a fake asset bubble based on debt. There is no way you can have house prices rise (with debt) as fast as they did and not expect a disaster. That huge housing industry required an endless flow of legal and illegal imigrants to buy the houses and build them, not to mention foreign capital(since we dont have any) . It was obvious something was very wrong but as long as people saw the their house appraisals get bigger no one would ask questions. Now it crashed and it's point fingers time, but Bush as president is the last guy without a chair, and we republicans have to pay for it (Pelosi and Obama , UGGG) . The party is over and socialism is here.
.......Now as a sweet, open-minded, reasonable, even-tempered, fair, non-pre-judgemental, polite, scrupulous, and equitable man, ........
Wow, How did you know? you described me to a T
People were moving every two years - making much more than you could make in stocks because of the tax advantages. Then the "flippers" got in on it - most of them "shoeshine boy" types who had no idea the houses weren't going up because of their wonderful "improvements".
I was in some of those houses - and didn't have the heart to tell some of those people that their big gain was because of the bubble - and not because they did such a great job putting new white tile in the kitchen...
I believe those original tax changes were done under the Clinton administration. Bush also got on board with it - refinements.
Or course the banks got in on it with more legislation to facilitate the mess - with their "2 payments and you can sell the loan" stuff. It's all sociopath scam stuff done on a very sophisticated level...
God help us - it's worse than anyone can imagine. ( And yeah, we'll have up times - maybe a year - maybe two - but the piper will be paid.)
Some of the things that contributed:
Tax laws were changed so gains on homes didn’t count as long as you had lived there for at least 2 years. And the cap on home profit was high ...
People were moving every two years - making much more than you could make in stocks because of the tax advantages. Then the “flippers” got in on it - most of them “shoeshine boy” types who had no idea the houses weren’t going up because of their wonderful “improvements”.
I was in some of those houses - and didn’t have the heart to tell some of those people that their big gain was because of the bubble - and not because they did such a great job putting new white tile in the kitchen...
I believe those original tax changes were done under the Clinton administration. Bush also got on board with it - refinements.
Or course the banks got in on it with more legislation to facilitate the mess - with their “2 payments and you can sell the loan” stuff. It’s all sociopath scam stuff done on a very sophisticated level...
God help us - it’s worse than anyone can imagine. ( And yeah, we’ll have up times - maybe a year - maybe two - but the piper will be paid.)
Bookmarked for later reading!
There was no need to do anything to ensure Obama took the White House.
This is a straight out financial cluster *#!
Thanks, Dave.
Always enjoy your insights.
.......Now as a sweet, open-minded, reasonable, even-tempered, fair, non-pre-judgemental, polite, scrupulous, and equitable man, ........
BOL, that was Kenny Bunk.
Since, I don't pay close attention to the markets everyday, did this buy down happened the very same day?
Very good points!
Schiff was on Laura Ingrahm today and she asked him if he thought a conspiracy was responsible for crash and he said
no of course.
Who would bring down the entire world economy to get Obama elected? Heck, Many of our enemies are suffering because of drop in oil prices.
It was the financial mess that derailed McCain...
It was the financial mess that derailed McCain... I believe it was a dem “ace in the hole” - October surprise - whatever.
Can you explain? T-bills? CD's? What?
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