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Denise
Moderator
Member Seraphic
since 1999-08-22
Posts 22648
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Here is a link to an interesting video on YouTube featuring Rep. Kanjorski (D-PA) on CSpan talking about the financial crisis. In it he states that he was present when the Secretary and the Chairman of the Federal Reserve came to Congress seeking approval for funds to save the banking system on Sept. 15th, detailing the events of the previous Thursday (which would have been Sept. 11th), in which $550 Billion of U.S. Money Market funds were electronically drawn down in a matter of an hour or two, the subsequent infusion of funds by the Fed into the market and then a shutdown of those markets to prevent a complete meltdown. Could this have been financial terrorism (foreign or domestic)? http://www.youtube.com/watch?v=_NMu1mFao3w |
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| © Copyright 2009 Denise - All Rights Reserved | |||
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Grinch Member Elite
since 2005-12-31
Posts 2929Whoville |
quote: No. The money being withdrawn was money previously deposited by the withdrawer, whoever they were they were simply taking out their own money from the banking system - there‘s nothing wrong or sinister about that. It was a simple run on the banking system of massive proportions conducted electronically. |
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Denise
Moderator
Member Seraphic
since 1999-08-22
Posts 22648 |
I would find it suspicious that there was such a massive run ($550 Billion) in less than two hours, so massive that the Fed had to pump money into the market and close further trading to prevent a complete meltdown, estimated to be in the Trillions by 2 pm that day if they hadn't, even if it hadn't been Sept. 11th. What are the chances, out of the clear blue, that all those stockholders suddenly decided to sell all on the same day and same time? There wasn't even any talk about bad financial times ahead at the time. |
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turtle Senior Member
since 2009-01-23
Posts 548Harbor |
I posted this same link in another thread. Grinch is right, but this does sort of frame the picture. Doesn't It? It sort of explains the need for a $750 Billion TARP In the relationship of stocks to companies, bussinesses need capitol to operate. The stock market is where this capitol comes from. If all of this $550+ Billion (And a large plus I suspect) is going into personal bank accounts, trust funds, tax shelters, off shore accounts and mattresses........ People are scared and angry. Simply put the problem is panic. Quote: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ "We have nothing to fear, but fear itself" FDR ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ And yet do we ever learn....... turtle  [This message has been edited by turtle (02-24-2009 01:55 AM).] |
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Bob K Member Elite
since 2007-11-03
Posts 4208 |
Dear Denise, Actually, I think the likelihood of the event being natural is quite high. Pay attention to what Grinch said. What you are describing is essentially a run on the banks such as happened at the beginning of the great depression and such as happened at the beginning of other large downturns going back at least through the 19th century. At those times depositors actually had to line up physically in front of windows and tellers had to count physical cash into waiting physical palms. Now, because it's done electronically, it's all much faster. There are built in fail safe cut-out switches, like the one that was tripped that actually did prevent the total bottom from falling out. Had that not been in place, however, the bottom could have fallen out. It doesn't take foreign or domestic terrorists to have done it, Denise. The Republican Revolution has been undoing many of the protections that were put in place following the great depression to prevent such things from happening again. Lord Acton, right? — Those who don't learn from history are condemned to relive it. It's not a plot it's "The triumph of hope over experience," as long as I'm going nuts with my quotes today. Dr. Johnson, I think, in a context only slightly different. Sincerely yours, Bob Kaven I hope all the kids are doing very well indeed, and that you're having a wonderful time with all of them, Denise. BK |
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Grinch Member Elite
since 2005-12-31
Posts 2929Whoville |
quote: When I first listened to the clip I was suspicious too Denise. So I did a little digging. It seems that the 550 billion wasn’t actually withdrawn - the actual total withdrawn is closer to 120 billion over a period of 4 days from the 15th to the 18th. quote: It wasn’t it was the 15th to the 18th. quote: The Lehman Brothers collapse on the 15th generated quite a bit of talk as I recall and probably instigated the withdrawals that occurred over the next few days. |
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Denise
Moderator
Member Seraphic
since 1999-08-22
Posts 22648 |
Grinch, the Representative said that the meeting about the crisis was on the 15th, in which they referenced the run on the markets that occurred on the previous Thursday, which would have been the 11th. |
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Grinch Member Elite
since 2005-12-31
Posts 2929Whoville |
quote: Not quite Denise, he said: “I was there when the secretary and the Chairman of the Federal reserve came those days and talked with members of congress about those things - it was about September the 15th”. The secretary and chairman did indeed talk to members of congress “about September 15th” but the discussion was on the 24th and at that discussion Kanjorski said: quote: Every reliable source I’ve checked so far confirms that the withdrawals started on the 15th and coincided with the announcement of the failure of Lehman Brothers and that they continued at an increased pace until Thursday the 18th. The "Thursday last" in the above quote. |
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Bob K Member Elite
since 2007-11-03
Posts 4208 |
Dear Denise, What he said. Sincerely, Bob Kaven |
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Denise
Moderator
Member Seraphic
since 1999-08-22
Posts 22648 |
quote: I don't know guys, that sure reads to me that the run of that large amount seems to have happened on that one day, between the specified time frame, whether it was the 11th or the 18th. And although I see how one could interpret the Representative as saying the 15th was the day of the run, it seems to me, when I listen to him talking, he was referring to the 15th as the day that the meeting with the Secretary and the Chairman of the Federal Reserve took place to discuss "Thursday last". That seems less of a strained interpretation to me. |
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Grinch Member Elite
since 2005-12-31
Posts 2929Whoville |
quote: It read that way to me too Denise but that doesn’t mean that it happened. I think that this article is closer to the truth. http://www.portfolio.com/views/blogs/market-movers/2009/02/11/kanjorski-and-the-money-market-funds-the-facts |
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Denise
Moderator
Member Seraphic
since 1999-08-22
Posts 22648 |
I guess there is no way to know which version is more accurate. I find it strange though that no one at the meeting has come out for or against what Kanjorski has stated. At least I haven't seen any statements from anyone else who was present. |
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Grinch Member Elite
since 2005-12-31
Posts 2929Whoville |
quote: The whole meeting was televised Denise and is available online - I watched the whole boring thing while researching - if you find it fast-forward to 1 hour and 52 minutes to hear the relevant bit. It’s not very flattering for Kanjorski, he waffles on trying to get Paulson to verify that the run happened and Paulson politely avoids the question. Remember this is the meeting that Kanjorski is talking about in the video you posted, the meeting where Paulson was supposed to have told Kanjorski and the others present all the gory details of the alleged run. That didn’t happen when I watched it, I think Kanjorski misremembered. We do agree on one point though, I was also surprised that nobody pointed out the error to Kanjorski after the meeting to avoid him any further embarrassment. [This message has been edited by Grinch (02-27-2009 04:37 PM).] |
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