Kanjorski: "The Treasury opened its window to help. They pumped a hundred and five billion dollars into 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 and there. And that's what actually happened. 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 political system and our economic systems as we know it."
"It would have been the end of our political system and our economic systems as we know it."
Bring the system down--for, if they really just wanted their money, they would have used the more subtle and less disruptive tactic of easing their way out of their position.
Who? We would like to know almost as much as the government would like not to tell us.
Probably, not China: No, someone even more embarrassing to acknowledge. The Fates are kind.
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 a tune of $550 billion being drawn out in a matter of an hour or two.
On the day the electronic run on the money markets happened, September 18th, the Dow Jones Industrial Average closed at 11,019.69. This was roughly two weeks before the huge market collapse during the first week of October 2008. As an aside, I wonder how many members of Congress got cashed out their stocks that day?Let me remind you of what happened that week. At the end of Sunday, September 14th, BofA agreed to take over Merrill Lynch and Lehman Brothers was left to fail, which they did on Monday September 15th. The markets lost heavily on Monday and Tuesday, and on Wednesday September 17th the two remaining investment banks, Morgan Stanley and Goldman Sachs, lost 25% and 15% respectively. They also started losing valuable clients, who moved their brokerage accounts to the likes of JP Morgan, which had a retail side and less leverage. Shortly thereafter MS and GS announced plans to merge with retail banks. The independent investment banks were no more. On Thursday the 18th this alleged bank run happened. What we did know happened was that Paulson hit the PanicButton™ and announced his economic stimulus. It was clearly a rush job and it made very little sense. You can read Krugman's blog entries from that day on to see how ill-conceived the plan was. On Friday the 19th the FT led with the headline "Markets Roar in Approval" and a picture of Paulson extending his arm across the page. Quite impressive. The rally lasted until the weekend and all the gains were lost over the followig week of Congressional bickering. I had always thought Paulson had announced his stimulus plan to save his former company, GS. Maybe he had other motivations.
On the day the electronic run on the money markets happened, September 18th, the Dow Jones Industrial Average closed at 11,019.69. This was roughly two weeks before the huge market collapse during the first week of October 2008. As an aside, I wonder how many members of Congress got cashed out their stocks that day?
At the end of Sunday, September 14th, BofA agreed to take over Merrill Lynch and Lehman Brothers was left to fail, which they did on Monday September 15th.
The markets lost heavily on Monday and Tuesday, and on Wednesday September 17th the two remaining investment banks, Morgan Stanley and Goldman Sachs, lost 25% and 15% respectively. They also started losing valuable clients, who moved their brokerage accounts to the likes of JP Morgan, which had a retail side and less leverage. Shortly thereafter MS and GS announced plans to merge with retail banks. The independent investment banks were no more.
On Thursday the 18th this alleged bank run happened. What we did know happened was that Paulson hit the PanicButton™ and announced his economic stimulus. It was clearly a rush job and it made very little sense. You can read Krugman's blog entries from that day on to see how ill-conceived the plan was.
On Friday the 19th the FT led with the headline "Markets Roar in Approval" and a picture of Paulson extending his arm across the page. Quite impressive. The rally lasted until the weekend and all the gains were lost over the followig week of Congressional bickering.
I had always thought Paulson had announced his stimulus plan to save his former company, GS. Maybe he had other motivations.
Daily Kos: State of the Nation
Representative Sherman later revealed that members were warned that Martial Law would result if the $700 bailout plan was not passed, and Iguadland10 posted another video ascribing that particular warning to Paulson.
That needs to be investigated. Like, now.
Not because I think it might have actually worked -- not a snowball's chance in Hell, in my opinion, as the soldiers, sheriffs and cops would not have backed them up -- but simply because the threat was made and people at the top of the Bush administration were apparently thinking about it. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
