Life goes on… right?
A blog called Zero Hedge says “the world almost came to an end” last September — and we’re hearing about it just now:
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:
On Thursday (Sept 18), at 11am 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.
Urk. Well, I guess that did work, after all. But all in all, it’s surprising that The End didn’t really come then, or around then, or before now, at least not in the form of a run on financial institutions, for the simple reason that a who-o-o-o-o-ole bunch of money that used to be there no longer was, or shortly would no longer… be. As in “no longer be.” Concludes blogger Tyler Durden:
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.
Too much leverage, folks — in a lot of ways. Tomorrow President Obama leverages the whole system a lot more, too.
Hey what’s the matter? The world’s going to come to an end or something?
Originally posted on Likelihood of Success. Hat tip to my dad, stock market maven Jerry Coleman.