Sunday, February 15, 2009

$550B Run on Money Markets, 9/11 or 9/18, 2008?

There is some blow-back among journalists and bloggers, to I.O's 2/14 updated article, immediately prior to this one -- enough that I have added a couple question marks in key places. This dispute/correction by means of conventional wisdom declares the $550B withdrawl from money market funds mentioned by Rep. Kanjorski as having taken place in less than two hours, were two hours out of Thursday, 9/18/08 and not 9/11/08.

I.O. once again offers the unedited Kanjorski pronouncements on C-SPAN, wherein he states
Look, I was there when the Secretary and the Chairman of the Federal Reserve came those days and talked with members of Congress about what was going on. It was about September 15th. Here’s the facts, and we don’t even talk about these things. On Thursday at about eleven o’clock in the morning, the Federal Reserve noticed a tremendous draw-down of money market accounts in the United States, to the tune of $550 billion dollars was being drawn out in the matter of an hour or two. The Treasury opened up its window to help. They pumped a hundred and five billion dollars in 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 ccounts and announce a guarantee of $250,000 per account so there wouldn’t be further panic out there, and that’s what actually happened.
From this, one would logically assume that the Thursday in question was likely on 9/11. However, there were news reports at the end of the following week which indicated a 9/18 date, for a huge draw-down. However, such reports also indicate statements [emphasis by I.O.] such as:

The news on redemptions at Reserve Primary is certainly being kept low key. The only reference to it that I have seen was buried in the third paragraph of a Bloomberg story.
[from, "Run On Money Market Fund: Reserve Primary Fund Lost 60% Of Its Assets To Redemptions This Week"]

And from a New York Post article, "Almost Armageddon," dated Sunday, 9/21:
According to traders, who spoke on the condition of anonymity, money market funds were inundated with $500 billion in sell orders prior to the opening. The total money-market capitalization was roughly $4 trillion that morning.
From the above, it is clear that details of this enormous threat to the United States' economy were being kept quiet. From the above, one is compelled to ask, how quiet? For example, it being kept as quiet as it was, had traders been trained by the federal government to hush news of any market panic potentially caused by economic terrorism? And if so, how long might they have been able to keep such a thing quiet? After all, it would be convenient to keep very, very quiet, an enormous economic attack on the date, 9/11.

Members of Congress have the answers. I.O. commends Rep. Kanjorski's interest in Congress informing Sovereign Citizens of what occurred and looks forward to gaining more information from them -- more glasnost, less mushroom management. For starters, what exactly do you mean to say, Rep. Kanjorski?

It should also not be lost in this discussion that it has been said, the most significant catalyst for the mortgage meltdown was the failure of IndyMac and that the catalyst for this was the prior public doomsaying of the same by Senator Charles Schumer. Nor should it be forgotten that Senate Majority Leader Harry Reid later leveled a similar, severely damaging public badmouthing of the insurance industry.

Add to this the move of ideological the friends of known economic terrorist, and fellow bankroller of MarxoFascists, George Soros, who are Herb and Marion Sandler. These culprits sold their virtual loansharking mortgage business, Golden West, to Wachovia Bank. Presumably they, being good at business, had a reasonable idea of when their loans were going to sour.

Add to this, the recurring patterns of huge end of day and end of week sell-offs on Wall Street, during this time, quashing hopes for stock market stability.

Then there was the prevention of the investigation of Fannie and Freddie, the campaign funding kickbacks of the same to the Democrat Congressmen who "helped" them, the revised Community Reinvestment Act which provided political correctness to rampant bad mortgages, the coercive tactics of Soros-backed ACORN, demanding that banks give out many more bad loans, and one wonders just what strings and wool can be pulled.

And keep in mind, this is the same Congress which ramrodded two crisis deepening, trillion dollar "acts" of economic sabotage upon us, since September.

Convenient coincidences abound. So do cunning and stealth by the powerful -- along with profound media ignorance. Yes we do look forward to gaining more tidbits of need-to-know information from Congress. (The Good Lord knows we don't expect the same from the new Executive Branch, since critical information to which voting American Citizens are entitled, fails to come, from the man who attacks those who seek it, Barack Obama -- or is that Barry Soetoro, the new, Indonesian "president" of the United States?)

Yes, let us have some further dialogue with Congress. As Rep. Kanjorski relates, they may need it.


Victor said...


There is reporting indicating that this $550 billion story, as originally reported, contains a number of inaccuracies.

"There are a host of errors in the segment referenced above. First, $550 billion in a matter of hours is ridiculous. While money market mutual funds (not “money market accounts”) were seeing tremendous redemption pressure, the amount totalled at most half that over the entire week (not hours). Money market accounts, which are presumably bank money market deposit accounts (Kanjorski later cites a $250K FDIC limit increase), likely only saw modest outflows. (Retail money market mutual funds saw only modest declines during the week, so money market deposit accounts likely only saw modest redemptions.)" (source)

Crane's news archives for September, 2008 are relevant here: reading through them in chronological order (from the bottom of the page to the top) will give you an idea of what really happened, as well as the dollar amounts involved.

Ted said...

Obama’s stealing the census from Congress has suddenly awakened and enraged the Republicans. Maybe this will arouse them as well to challenge Obama for stealing the Presidency itself. They surely know he is not an Article 2 “natural born citizen” (which is more than merely being a 14th Amendment “citizen”) by virtue of either Obama’s birth to a dad of Kenyan/British citizenship or birth in Kenya itself — as manifested by his unwillingness to supply his long form birth certificate now under seal.

Victor said...

Following up: Felix Salmon on Seeking Alpha provides data that refutes the Kanjorski account.

Sam Sewell said...

Aristotle the Hun comments:

Good work Arlen! If our sole witness’s testimony about this event was Rep. Kanjorski pronouncements on C-SPAN there could only be one conclusion. The 550 B run on the money markets happened September 11th 2008. To conclude that the attack happened on September 18th would mean accepting that the meeting referenced by Rep. Kanjorski discussed an event that had not yet happened. I doubt that even Liberal Democrats with lots of PAC money in their pockets would claim such a degree of prescience.

However, when one examines the other sources of information it becomes possible to conclude from the evidence that the 550 B run happened on September 18th. Research based on epistemological protocol often reveals such twists and turns.

It is worth noting that “Sen. Chris Dodd (D-Conn.), chairman of the Senate banking committee, has received the most from Fannie and Freddie's PACs and employees ($133,900 since 1989). Rep. Paul Kanjorski (D-Pa.) has received $65,500. Kanjorski chairs the House Financial Services Subcommittee on Capital Markets, Insurance and Government-Sponsored Enterprises, and Freddie Mac and Fannie Mae are government-sponsored enterprises, or GSEs.”

We got the idea it was Thursday the 11th from the video. When one listens to the video it seems like he is talking about the Thursday prior to the 15th not the Thursday after the 15th. When I read the transcript it still seems that way if it were not for the words [September 18th] inserted into the transcript.

"... I was there when the Secretary and the Chairman of the Federal Reserve came those days and talked with members of Congress about what was going on….It was about Sept 15. Here’s the facts, and we don’t even talk about these things. On Thursday [September 18] at about eleven o’clock in the morning, the Federal Reserve noticed a tremendous draw-down of money market accounts in the United States, to the tune of $550 billion dollars was being drawn out in the matter of an hour or two." [Rep Kanjorski]

However, I see your point about the possibility of a September 18th date. Mr. Kanjorski is probably not the most reliable witness we could have. My point is that be it the 11th or the 18th my previous comments still hold, i.e.

I see enough evidence to stick with the story focused on a “manufactured crisis”:

The manufactured crisis is a well know strategy of leftists:

Soros, or other Sorosesque potential culprits, have a history of manipulating markets and the economies of entire nations.

Soros currency speculation
On Black Wednesday (September 16, 1992), Soros became immediately famous when he sold short more than $10 billion worth of pounds, profiting from the Bank of England's reluctance to either raise its interest rates to levels comparable to those of other European Exchange Rate Mechanism countries or to float its currency.

Finally, the Bank of England was forced to withdraw the currency from the European Exchange Rate Mechanism and to devalue the pound sterling, and Soros earned an estimated US$ 1.1 billion in the process. He was dubbed "the man who broke the Bank of England."

The Times of Monday, October 26, 1992, quoted Soros as saying: "Our total position by Black Wednesday had to be worth almost $10 billion. We planned to sell more than that. In fact, when Norman Lamont said just before the devaluation that he would borrow nearly $15 billion to defend sterling, we were amused because that was about how much we wanted to sell."

According to Steven Drobny,[15] Stanley Druckenmiller, who traded under Soros, originally saw the weakness in the pound. "Soros' contribution was pushing him to take a gigantic position," in accord with Druckenmiller's own research and instincts.

In 1997, during the Asian financial crisis, then Malaysian Prime Minister Mahathir bin Mohamad accused Soros of using the wealth under his control to punish ASEAN for welcoming Myanmar as a member.

The appearance of a “political surprise” just in time to tilt the election is more than just convenient for Mr. Obama and the “coat tails” that followed him into office..

I think there is still something to look for that will validate the suspicions of a “manufactured crisis”.

The Washington Post went after Nixon with less evidence.

Anonymous said...

Further dialogue with Congress?Excuse me,I don't recall the last time "we the people" has had any dialogue or say in what takes place in DC.We don't have representative government anymore.We voiced our concerns over both Bailouts to no avail.Not only that,but those Bills were not read by anyone voting on them.

Anonymous said...

Barring Herr Victor,the flack you are getting has to due with looking at branches,instead of the root,or at the very least the tree.It leads one down a rabbit hole.You mention the profound ignorance of the media.Are you kidding?That's like saying our elected officials are working for us,when we know they work for special interest groups and international bankers.The MSM job is to hide the truth,and to vilify whisltleblowers.Until that is understood,all this lofty talk about reform and accountability is for naught.And people like Sam will write lenghty commentaires that have nothing to do with reality,for love of hearing one's own voice.At least some people are alerting the self-deluded masses of the dire situation we are in. ARTICLE WRITTEN TODAY BY JIM SINCLAIR: It Is Now Officially
'Out Of Control'
By Jim Sinclair

About Jim Sinclair

Jim Sinclair is a precious metals and commodities specialist. Some of the highlights of his nearly 50 year career include the founding of Sinclair Group of Companies (1977), which offered full brokerage services. Mr. Sinclair served as a Precious Metals Advisor to Hunt Oil and the Hunt family for the liquidation of their silver position as a prerequisite for the $1 billion loan arranged by the Chairman of the Federal Reserve, Paul Volcker. He was also a General Partner and Member of the Executive Committee of two New York Stock Exchange firms and President of Sinclair Global Clearing Corporation and Global Arbitrage

He has authored numerous magazine articles and three books dealing with a variety of investment subjects. He is a regular speaker at various commodities related events.

In January 2003, Mr. Sinclair launched, "Jim Sinclairs MineSet," which now hosts his gold commentary and is intended as a free service to the gold community.

"Nothing will unnerve the paper gold shorts more quickly and do more to undercut their confidence than to strip them of the real metal and force them to come up with more hard gold bullion to make good on deliveries. "Stand and Deliver or Go Home" should be the rallying cry of the gold longs to the paper gold shorts." --Trader Dan Norcini

Dear Comrades In Golden Arms,

I sent you a certain few emails that I consider to be the most important communications issued in my career that started in 1958.

I am the son of what I know to have been the greatest Lone Wolf trader in Wall Street history ever, Bertram J. Seligman. He was a past master at his business and believed to be a market sensitive. I apprenticed to him, learned from him and inherited some of his ability, not all however.
From this background of experience understanding and sensitivity the following flows.
The emails of note:
1. Said, "This is it."
2. Said, "It is now."
This communication is to inform you as of 2/13/09, "It is totally out of control." There is no longer any means of reversal of the beginning of the final phase of the downward spiral now solidly set in motion.
For your sake, protect yourselves immediately.
Be prepared for disruptions in distribution common to hyperinflation.
1. You should have already distanced yourself from your financial agents. If you haven't you are headed for significant displeasure and strain.
2. Make sure you stay three months ahead on necessary items that could experience distribution delays such as prescribed medicine and preferred foods.
3. Even though real estate is far from a buy, if you can afford a second home outside of major cities it would serve a good purpose.
4. Own gold.
5. Consider that good gold shares of non-US companies incorporated in a non-US country operating in third country, traded on multiple exchanges are a means of money expatriation legally and in broad daylight if required.
6. For currencies, all you can do is own a spread held by a true custodial ship wherever that might be.
Simply said, as of Friday February 13th, 2009 the situation is in confirmed "Out of Control" mode as this well engineered downward spiral enters into a terminal phase.
The motive was profit and degree of the disintegration caused in the pursuit of this goal was not anticipated.
The key event was when Lehman was flushed - all hell broke loose. The hell cannot be contained in any practical manner.
I seek nothing of you but the protection of yourselves.
Respectfully yours,
The MSM and our elected officials glossed over the insider trading prior to 9-11,and the same will be done here.The point being that the focus has to be on the Usurper and those behind him or it is all over.Spending time on the rest of it is the same game played since 1913.The looting will continue as political pundits rail against shadows.

Anonymous said...

It's not just the Executive Branch that covered for the Usurper,it was all three---four including the Adm.State since 1946.Read the above post and then read the Black Friday post and the rest in the open thread regarding these matters,and take the time to educate yourselves people by going to the links provided.