$550 Billion Electronic Run On U.S. Banks Nearly Triggered Financial Collapse

[bigtree]

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 occurred over the period of an hour and threatened a further $5 trillion to be drawn out triggering a total collapse of the Financial System, which prompted Hank Paulson's emergency $700 billion TARP bailout action.



from Sep-27-08:
I wonder how many folks have withdrawn all their cash in fear of Monday?
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=4106592

[MrPerson]

1. NOW they tell us. I call bullshit.

[bigtree]

2. you don't believe that millions of Americans shifted their funds

. . . out of risky accounts?

That just seems elementary to me. The speed at which those transfers could occur creates it own special threat. An electronic run on the banks? I say it could absolutely happen, and likely did.

[MrPerson]

4. I don't trust what any of them say.

[Hannah Bell]

22. all in the same hour? not likely "millions of americans" did that.

more like "hundreds of fraudsters, banksters, hedget funds & other financial mafiosa trying to provoke crisis for economic/political gain".

Protection racket. Welcome to politics, Italian-style.

[AyanRand Is Dead]

25. ding! ding! ding!

[sandnsea]

3. They said we were on the verge of collapse

They changed FDIC insurance and added federal protection to money market accounts. How did you miss that?

[MrPerson]

5. I think it was a scam to get the money.

Why are we hearing about it now?

[MrPerson]

6. We asked back then. They were very vague.

[sandnsea]

7. Lehman Bros closing on a Sunday night

was not vague. Bank failures one after the other, was not vague. The warning of no money in the ATM, was not vague. It was all there. Sorry you missed it, or chose not to believe it and now find it easier to believe "they're all crooks" because understanding the details takes too much of your time.

[Hannah Bell]

8. here's a detail for ya:

"According to Kanjorski, this electronic transfer occurred over the period of an hour"

[MrPerson]

11. And what stopped it? The TARP sure did not.

That money went down a rat hole.

[Hannah Bell]

14. I totally agree. Nor do I think millions of ordinary CD holders, in the same hour,

decided to withdraw their funds.

If I were going to credit the story & the scant details offered, my first guess at the bigger picture would be "coordinated attack on the system" by the same mafia types wanting bailouts.

i.e. TaRP = protection $

[sandnsea]

16. Remember when they stopped short selling?

Because the markets were being manipulated? Yes, this sort of thing was happening. I don't know why people are pretending they don't know why action was taken.

Are there undoubtedly a bunch of financial crooks at the root of this? Absolutely. Doesn't change the fact that you and I shouldn't starve because of it.

[Hannah Bell]

17. If it's crime, then by definition, bailouts & the like are no solution.

Just give more $$$ to the crooks.

[sandnsea]

18. You'd rather pay the consequences?

Sorry, not me. We're suffering enough for what these bastards did. Complete financial collapse? I don't think so.

[Hannah Bell]

21. No, I'd rather shut down the crooks. "Complete financial meltdown" is

never an inevitability, unless the government is in bed with the crooks. Abe Lincoln, rather than pay the bankers, financed the first part of the Civil War on US-gov't created, no-interest greenbacks. We could do the same.

Your schema = indenture to the crooks either way, fast v slow penury.

If that's the choice, fast might be better; people would resist - instead of being boiled to death slowly.

[sandnsea]

24. We are

Do you think there weren't any crooks in the 1800s? I'm sure some of them got some of Lincoln's greenbacks too. They always do.

You can't shut down the crooks because they made what they did legal before they did it.

[Hannah Bell]

26. There were crooks; L. didn't borrow from them at the rates they wished to extort.

What was legalized can be delegalized if there's the will to do it.

Here's your line of thinking: "The banksters are going to take down the economy if we don't give them one year's GDP!! Better do it or we'll lose our already poorly paid jobs!"

[MrPerson]

10. I don't believe it was as dire as they say.

They just wanted to steal our money.

[Zynx]

20. This was and is still very very very real.

When state governments couldn't borrow at reasonable rates, when GE couldn't access the commercial paper markets, when small businesses ran out of credit and folded, that was all quite real.

[MrPerson]

12. This is the same BS Cheney pulled on us.

They know things we don't.

But they can't tell us.

OOoooooooooo. I'm scared.

[Horse with no Name]

9. Be curious to know how MANY people did this

it would be "disturbing" if it was a handful of millionaires.

[Hannah Bell]

15. yes, that would be disturbing, wouldn't it?

protection rackets *are* disturbing.

[WCGreen]

19. Overseas accounts, I bet, plaid a big part in this run,,,,

[malaise]

27. Disturbing?

Not really - predictable would be my choice of word. I bet Phil Gramm got his money. These criminals should be in jail.

[Subdivisions]

13. Expect another run on Friday. n/t

[leftstreet]

23. "transfer occurred over the period of an hour" ?? Then it was DELIBERATE

If this is true, then it was a bullshit scam