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Forum Post: Who can answer this question? Who started 500 Billion Draw Down on Money Markets on the morning of Sept. 15 2008?

Posted 2 years ago on Nov. 6, 2011, 6:15 p.m. EST by FedWallFedWellFedUP (183)
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Who can answer this question? Who started 500 Billion Draw Down on Money Markets on the morning of Sept. 15 2008?

20 Comments

20 Comments


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[-] 1 points by velveeta (230) 2 years ago

Lehman Brothers bankruptcy - caused Reserve Primary Fund to "break the buck", causing a run on money market funds - Tresury had to suddenly insure mm holdings

from Wikipedia "The crisis almost developed into a run on the shadow banking system: the redemptions caused a drop in demand for commercial paper,[9] preventing companies from rolling over their short-term debt, potentially causing an acute liquidity crisis: if companies cannot issue new debt to repay maturing debt, and do not have cash on hand to pay it back, they will default on their obligations, and may have to file for bankruptcy. Thus there was concern that the run could cause extensive bankruptcies, a debt deflation spiral, and serious damage to the real economy, as in the Great Depression.[citation needed]

The drop in demand resulted in a "buyers strike", as money funds could not (because of redemptions) or would not (because of fear of redemptions) buy commercial paper, driving yields up dramatically: from around 2% the previous week to 8%, and funds put their money in Treasuries, driving their yields close to 0%.

This is a bank run in the sense that there is a mismatch in maturities, and thus a money fund is a "virtual bank": the assets of money funds, while short term, nonetheless typically have maturities of several months, while investors can request redemption at any time, without waiting for obligations to come due. Thus if there is a sudden demand for redemptions, the assets may be liquidated in a fire sale, depressing their sale price."

[-] 1 points by FedWallFedWellFedUP (183) 2 years ago

Thank you for your detailed answer veleeta

[-] 1 points by me2 (534) 2 years ago

Don't you know that never happened? Now hush.

[-] 1 points by BradB (2693) from Washington, DC 2 years ago

Forums (http://www.elitetrader.com/vb/index.php) - Economics (http://www.elitetrader.com/vb/forumdisplay.php?forumid=43) -- $550 BILLION in two hours.....LOL!!! (http://www.elitetrader.com/vb/showthread.php?threadid=153046)

Posted by AMT4SWA on 02-06-09 10:20 PM: $550 BILLION in two hours.....LOL!!!

Rep. Kanjorski: $550 Billion Disappeared in “Electronic Run On the Banks”

Infowars.com February 6, 2009

At 2 minutes, 20 seconds into this C-Span video clip, Rep. Paul Kanjorski of Pennsylvania 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 occured over the period of an hour or two.

VIDEO..... http://www.infowars.com/rep-kanjorski-550-billion-disappeared-in-electronic-run-on-the-banks/

Here is a transcript of what Kanjorski says in the video:

On Thursday Sept 15, 2008 at roughly 11 AM The Federal Reserve noticed a tremendous draw down of money market accounts in the USA to the tune of $550 Billion dollars in a matter of an hour or two.

Money was being removed electronically.

The treasury tried to help with $150 Billion.

But could not stem the tide.

It was an electronic run on the banks

The treasury intervened but had they not closed down the accounts they estimated that by 2 PM that afternoon. Within 3 hours. $5.5 Trillion would have been withdrawled and collapsed and within 24 hours the world economy.

Kanjorski does not provide further details.

A Google search to verify this produces zero results.


[-] 1 points by bobonit (59) 2 years ago

The infowars link is no good

[-] 1 points by FedWallFedWellFedUP (183) 2 years ago

excellent BradB...notice how all trails end cold...no mention of who initiated the sell orders using Google search

[-] 0 points by IChowderDown (110) from Dallas, TX 2 years ago

How sad that link is broken. Error 404. ??? Infowars is unlikely to remove this. They have many videos that are filled with explosive facts.

[-] 1 points by exmachina (94) 2 years ago

The Fed!

[-] 1 points by gnomunny (6647) from St Louis, MO 2 years ago

It's been over an hour already. We give. If it's initials are 'GS' I'm gonna be pissed.

[-] 1 points by schnitzlefritz (225) 2 years ago

Many believe that George Soros was behind it. I haven't seen anything that conclusively states that it was him, just motive and opportunity.

[-] 1 points by gnomunny (6647) from St Louis, MO 2 years ago

Come to think of it, I think I heard the same thing a week or two ago (on this website). Just like you, I'm not sure of any truth to it though.

[-] 0 points by steven2002 (363) 2 years ago

Obama

[-] 0 points by foreverleft (233) 2 years ago

The people who owned the money. Who else, you insane tinfoil hatter.