Tuesday, February 10, 2009

Tales from the Meltdown 10: "An Electronic Run on the Banks"

Rep. Kanjorski on the government interventions that have been attempted since September. Particularly frightening is his description of the run on the money market funds that occurred after September 15th.

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."

(via boingboing)

No comments: