http://seekingalpha.com/article/1196...cle_sb_popular

Interesting video with Rep. Kanjorski describing events of September
18 and the reasons for Fed panic.



Update: Felix Salmon raises questions on Kanjorski's statements: "This is all,
frankly, fiction."

• • •

LiveLeak has caught a scary moment of previously undisclosed insight by Paul
Kanjorski where he reveals some facts that have not been captured by the media
previously. At 2 minutes and 20 seconds in the video below, Democratic
Representative Kanjorski explains how the Federal Reserve told Congress members
about a "tremendous draw-down of money market accounts in the United States, to
the tune of $550 billion dollars." According to Kanjorski, this electronic
transfer occurred over the period of an hour or two. And it gets worse.
Kanjorski paraphrases the following disclosure by Bernanke and Paulson (emphasis
added):

On Thursday (Sept 18), at 11 in the morning the Federal Reserve noticed
a tremendous draw-down of money market accounts in the U.S., to the tune of $550
billion was being drawn out in the matter of an hour or two. The Treasury opened
up its window to help and pumped a $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.

If they had not done that, their estimation was that by 2pm that
afternoon, $5.5 trillion would have been drawn out of the money market system of
the U.S., would have collapsed the entire economy of the U.S., 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 are no better off today than we were 3 months ago because we have a
decrease in the equity positions of banks because other assets are going sour by
the moment.

Interestingly, Kanjorski, and likely more and more Democrats, are starting to
shift to the camp that more time is needed to make a correct decision this time
(which may explain Geithner's decision to postpone the "bank-rescue"
announcement by one day, to Tuesday), instead of rushing into another half-baked
plan. Very scary stuff.

"cavelamb" wrote in message
...

http://seekingalpha.com/article/1196...cle_sb_popular

Interesting video with Rep. Kanjorski describing events of September
18 and the reasons for Fed panic.



Update: Felix Salmon raises questions on Kanjorski's statements: "This is
all, frankly, fiction."

I believe the guy heard this from the Fed but Kanjorski is just a rube that
didn't know better.
It just wasn't true.
The funds just began inposing the limits that are allowed by mutual consent.
MMF's aren't bank accounts no matter what anyone tells you. Some, in fact,
can only be accessed once each year although monthly or quarterly is the
more ordinary period.


JC