Video: The day the global economy almost died
posted at 3:15 pm on February 10, 2009 by Allahpundit
It’s Paul Kanjorski, no stranger to blabbing about unpleasant truths, regaling C-SPAN last month with the economic equivalent of the Stanislav Petrov story. Remember the reports that trickled out in mid-September about a harrowing briefing Paulson and Bernanke had given to Congress? The specifics were never revealed, but whatever they said scared the hell out of attendees:
“When you listened to him describe it you gulped,” said Senator Charles E. Schumer, Democrat of New York.
As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program “Good Morning America,” the congressional leaders were told “that we’re literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally.”
Mr. Schumer added, “History was sort of hanging over it, like this was a moment.”
When Mr. Schumer described the meeting as “somber,” Mr. Dodd cut in. “Somber doesn’t begin to justify the words,” he said. “We have never heard language like this.”
Take a drink of something hard and watch from 2:20 to 3:45. Now you know the specifics. This Journal story from that week described the financial turmoil through Wednesday afternoon, at which point $144.5 billion had already been yanked out of money markets, and then skipped ahead to Paulson and Bernanke meeting with Congress on Thursday night without a mention of what happened in between. That’s how closely guarded this secret must have been.
Blowback
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Yes, I admit I’m feeling a little Truther-y today…but wonder how much of that yanking had Soros fingers attached to the other end….
Rogue on February 10, 2009 at 3:18 PM
good grief.
homesickamerican on February 10, 2009 at 3:19 PM
I think our economy as we know it, as we have known it, and as we wanted to continue to know it, will be forever changed when this bill passes and is signed.
I expect the countryside to be collectivized in short order.
Show trials should start shortly afterward.
Once the political prisons are full, the Gulags will open.
This is the nature of communism. This is the road before us.
t.ferg on February 10, 2009 at 3:20 PM
I say a lot of Soros’ fingers have been on this mess..plus, a few toes.
becki51758 on February 10, 2009 at 3:21 PM
Thought so.
China. Russia, Saudi Arabia.
Skandia Recluse on February 10, 2009 at 3:21 PM
I heard this today on Rush. My first thought…GEORGE SOROS.
And Chuck Schumer for getting the ball rolling with ther freddi/mac fannie/mae bank run.
Question. Will there be an independent investigation.
I’ll answer that myself….a big fat coverup NO
Burgher on February 10, 2009 at 3:21 PM
The will go after free speech next, then gun rights. Make us deaf/dumb, then powerless.
ladyingray on February 10, 2009 at 3:22 PM
He says that like it’s a bad thing.
Rae on February 10, 2009 at 3:22 PM
the end of the clip is better. we don’t know, but by god what we are doing is right.
lorien1973 on February 10, 2009 at 3:22 PM
Good gracious… this man is a Democrat and his district includes Scranton, the place Biden is from. These are not qualification for “truth tellers” in my opinion.
Maxx on February 10, 2009 at 3:24 PM
that’s quite enough about Barney Frank who got us into this mess…
gatorboy on February 10, 2009 at 3:25 PM
Interesting that the people who are talking about it and are talking in terms of gloom and doom are Democrats.
johnsteele on February 10, 2009 at 3:25 PM
Sounds similar to what we’re hearing today, “EVERYONE IS GOING TO DIE!”
Bishop on February 10, 2009 at 3:25 PM
Wow, great job Bushie, Paulsonie, and Bernanke, and Coxie too!
I’m feeling better and better about “compassionate” conservatism, aren’t you guys?
funky chicken on February 10, 2009 at 3:27 PM
Yep, this is just the beginning. The Dems have been working toward this goal since they got their orders from Stalin in the 1930s.
johnsteele on February 10, 2009 at 3:27 PM
That was sobering…It also demonstrates how important it is to ensure that we get the stimulous right and not waste any money. Our margin of error may be razor thin, and yet we are wasting billions of dollars on the Stimulous craziness…
RedSoxNation on February 10, 2009 at 3:29 PM
We may have well been within days of a complete melt-down, but don’t think for a second that it was a bizarre coincidence that this happened in October 2008.
SOMEONE is pulling the strings.
You know, someone called into Hannity the other day and asked a legitimate question (IMO) about the Bilderberg group. Hannity said “I have no idea what you’re talking about” and cut him off quicker than you can blink as if the caller was some crackpot.
That group DOES exist. So, what do they do if not pull strings? If not that, then what?
And don’t anyone start on me about being a “truther.” The pols in DC are destructive and stupid for the most part, but I don’t know that they’re smart enough to do the damage that’s been done.
Oink on February 10, 2009 at 3:29 PM
Kanjorski was also the guy who admitted last year that the Democrats were going to dust off (his words) the New Deal in 2009 no matter what shape the economy was in–and this was back in May, when the DJIA was well over 12,000.
Ed Driscoll on February 10, 2009 at 3:30 PM
MS Chicken (3:27) perhaps you could share some of the top secret information you have that ties Bush to the run on a money market fund?
Skandia Recluse on February 10, 2009 at 3:31 PM
Ok, so you’re floating in the Atlantic ocean in a life raft and you decided to rape our treasury and spend the money on every imaginable socialist/communist endeavor the nutty congress could fabricate. I must say this guy really exudes confidence.
With our present flaky government it is obvious that we are doomed.
rplat on February 10, 2009 at 3:31 PM
Market-Gate
faraway on February 10, 2009 at 3:31 PM
These members of congress have no clue as to finance. They distorted the market until it faltered, then decided they should ‘fix’ it by changing the rules. They are like two year olds with guns: “Hey, what was that noise?”
Vashta.Nerada on February 10, 2009 at 3:32 PM
Well, Not all of it. I pulled all my family’s money out right about then. Should have done it a year earlier when I first felt the rumblings of the politico/financial mega-earthquake.
LegendHasIt on February 10, 2009 at 3:32 PM
California is freeing up room for 53,000 conservatives in its prisons.
faraway on February 10, 2009 at 3:32 PM
Missing in this is the monkey wrench that started the initial pullout. As I recall, there was simply an internet ‘story’ behind it. All they had to do was close the ‘store’, issue the guarantee as they did, then come back in the morning.
Clearly, this congressman went into a panic mode and has not come back.
This small panic should not have resulted in anything more than what happens to the stock market. When the stocks move too fast, they simply close the market and let it cool off for a bit.
As for pointing fingers – well, actually even the george soroses of the world dont have enough cash to move 500+ billion.
Now, as I recall that guarantee was for 6 months, I wonder if the president or congress will remember to extend it? Or, as typical, will they let it elapse and hope for another panic in order to grab even more of the peoples money!
Freddy on February 10, 2009 at 3:33 PM
ah, month and half till election day. I’m sure this was a coincedence, the timing that is.
jp on February 10, 2009 at 3:34 PM
They wouldn’t have been able to pull it off if the Bush Administration hadn’t allowed the fiscal crisis to explode 5 weeks from the election.
funky chicken on February 10, 2009 at 3:35 PM
if the GOP and Conservative movement acted like a Mafia family, Soros would’ve been whacked a long time ago.
jp on February 10, 2009 at 3:36 PM
I don’t know what’s so new (except for the details on the money market draw down). Paulson said that “we were 500 trades from Armageddon”.
BTW, runs on the bank can always occur (no banking system is ever immune to it), and the moves the government has been making (including the idiot messiah’s bullying to get his socialist nation started) make this more likely to happen again. Confidence is ebbing as we speak, regardless of what the neo-Pravda media claim about everyone loving the retard in the White House.
Capital will leave this nation. We are busy chasing it away, with the moron dems and some 55%+ of the American public cheering it on its way.
progressoverpeace on February 10, 2009 at 3:36 PM
To the Pillory Post with Schumer. He tanked IndyMac deliberately and set this entire debacle in motion. Squid. Barney Frank, too. Jerk.
I hate them all.
BrideOfRove on February 10, 2009 at 3:36 PM
You’d think an intrepid financial reporter might want to investigate this sort of thing. Or any intrepid reporter. Oh yeah, right.
Iblis on February 10, 2009 at 3:38 PM
f.w.i.w. – Soros on the financial crisis.
Buy Danish on February 10, 2009 at 3:39 PM
Chris Cox and the uptick rule:
http://seekingalpha.com/article/107174-the-uptick-rule-mr-cox-is-it-really-that-devilish
http://dealbook.blogs.nytimes.com/2008/11/20/wachtell-lipton-calls-for-return-of-uptick-rule/
http://kudlowsmoneypolitics.blogspot.com/2008/09/chris-coxs-terrible-idea.html
Chris Cox was yet another political hack that W put into a position that he obviously wasn’t qualified to fill. Bernard Madoff anyone?
funky chicken on February 10, 2009 at 3:39 PM
Don’t know if this has been posted yet but Kanjorsky voted AGAINST the stimulus bill.
Skywise on February 10, 2009 at 3:39 PM
If this is a game of chicken then I, for one, am willing to take it over the damned cliff. Let’s do this thing. We can’t rebuild until the last piece falls. George Washington would be so ashamed of us right now if he could see what we’ve done to this country. We are better than this.
BrideOfRove on February 10, 2009 at 3:40 PM
My sources tell me it was closer to 2 trillion that left the financial system that day,so I am wonderering when or if our government will let people know that that was a cyber[warfare] attack on our financial system.Keep in mind the reports that the WMF had been under cyber attack for the previous year. We still do not know who or what is behind it-but notice how much is being poured back into the system-its quite a bit more than the 500 and some-odd billion-and closer to the 2 Trillion that I mentioned here. Truth? Conspiracy theory? or Manufactured crises?
canditaylor68 on February 10, 2009 at 3:41 PM
I question the timing. It was perfect for the Messiah.
Entelechy on February 10, 2009 at 3:41 PM
I agree about Schumer setting it off with Indy Mac. Do you think his dumb a$$ did that on his own intentionally or accidentally. Do you think the DEMS even realized what they were doing?
Oink on February 10, 2009 at 3:42 PM
I wouldn’t rule out Economic Terrorism either, September is the month for Jihad attacks also.
I was reading Samir Khans blog one day in the fall during this. To be a 20 year old kid connected to Al-Qaeda, he sure new alot about or Economic System and Credit Default Swaps….which he wants to replace with Shariah Finance
jp on February 10, 2009 at 3:43 PM
They knew.
BrideOfRove on February 10, 2009 at 3:43 PM
Given that Soros has a history of tanking economies in order to get a big payoff (i.e. Bank of England, shady dealings in France, etc.), I’d say you’re not being Truther-ish but rather observant.
Vic on February 10, 2009 at 3:44 PM
Meanwhile, back at the ranch…
While most of the nation focused on the stimulus bill winding through Congress, nine representatives introduced a bill calling for an end to the 46-year-old ban on travel to Cuba.
right2bright on February 10, 2009 at 3:44 PM
This whole affair with this baiout package reminds me of a job I had some years ago. I was the project engineer for a software project that was behind schedule and over budget. I was tasked to determine the effort remaining and how long it would take.
When I went to the software manager and ask him to help me by answering some questions, I was told that he didn’t have time to work with me because he was too busy working on the project and I would be wasting his time trying to answer my questions. I then asked him when he would finish and he said when it was done. I then asked how he knew when the project was finished and he said when the money runs out.
This fire drill to do something, anything to get the economy going sounds just like that. No one has a clue what needs to be done, but if we throw enough money at it and throw it all over the place some of it has to do something.
Well, I think this bailout was put together in haste, with no real thought about what the specific problem that is to be solved. The congress was scared into doing something without any foresight into where the money was going. We got pretty much what you would expect.
belad on February 10, 2009 at 3:46 PM
If all of this is true.
Then what is going on now is nothing less
than the hijacking of America.
The Obama followers are mere chattle.
You now have economic terrorists running the country.
izoneguy on February 10, 2009 at 3:47 PM
Interesting as this theory is – the underlying truth is these banks were over leveraged and poised on a knife edge. Schumer knew exactly whic one to kick over and he did it just in time to win the election for Obama. Don’t forget the way they played McCain – begging him to return to save them and then kicking him at the door like a dog.
It would take one amazing hacker to bring down all the banks at once OR one POS like Schumer to set it off. I’m going with the butterfly from hell effect. A computer attack can be reversed.
BrideOfRove on February 10, 2009 at 3:47 PM
Economic terrorism. Start waterboarding their personal accounts until they spill their guts.
Christien on February 10, 2009 at 3:48 PM
There has been a game of political chicken going on for 30 odd years in this country. On the one hand, the GOP cuts taxes, to put pressure on the democrats to cut spending. The dems increase spending, and put pressure on the GOP to raise taxes. The dems now think that they can use the current situation to insist the only right thing to do is raise taxes.
Only a grassroots rebellion across the country can stop this spending madness and prevent a massive tax increase in the near future, not to mention a huge potential loss of freedom.
Vashta.Nerada on February 10, 2009 at 3:48 PM
Allah — as difficult as it may be from you lofty perch, doesn’t Rush deserve a H/T on this?
Or is it just a coincidence that he led off his show with the Kanjorski clips today – punching it up big time — EST 12:00 Noon, and you’re posting at 3:15 EST?
Nichevo on February 10, 2009 at 3:50 PM
Today’s not looking so hot either. Geithner and the Senate vote have the dow down 400 points. Gold is rallying.
JiangxiDad on February 10, 2009 at 3:55 PM
At this point, the above analysis doesn’t see so bad.
PappaMac on February 10, 2009 at 3:55 PM
heh, looking around for Samir Kahns #1 English Al-Qaeda website, I find that he has been taken down and Rusty Shackelford has been giving him hell over it.
There was some interesting things to read on there.
jp on February 10, 2009 at 4:00 PM
Gold is rallying.
So is lead, at least that’s what I gather from the empty ammunition shelves at Cabela’s.
Bishop on February 10, 2009 at 4:00 PM
Schumer knew what he was doing when he blew up IndyMac. He had a large hand in blowing up Countrywide before that, the story of which has yet to be told. IndyMac had no lobbyists and no PAC, and made no contributions to Schumer or the DSCC.
Go take a gander at the biggest donors to the DSCC since 2004 and compare it with the list of Wall Street institutions that are still standing. You will find it quite edifying.
rockmom on February 10, 2009 at 4:02 PM
How paranoid would I be to ask if this was a dress rehearsal for something bigger….
Pianobuff on February 10, 2009 at 4:03 PM
I find the flight from money markets interesting. I work for an investment firm and we were seeing just the opposite — as stocks fell, money market funds were raking it in. It makes you wonder which funds and which clients were fleeing them???
D2Boston on February 10, 2009 at 4:03 PM
This was an act of war or an act of treason. Normal trading volume for the entire world is about 1 trillion dollars per day. That’s in all currencies not only the us dollar. This was deliberate. Some one purposely tried to crash the banking system.
oldvannes on February 10, 2009 at 4:04 PM
I hadn’t read the details of this story before this. Obviously I knew there was a run on banks in September, and that the panicked chicken littles in Washington and in the media helped snowball it into the mess it is now.
What I didn’t know was that we were talking about wealth in the range of $500 billion to $2 trillion vaporizing in a matter of mere hours.
Um, it doesn’t take a brain surgeon, does it? Why is no one investigating this? Where is the SEC on this? The Justice Department? Without question something shady was going on that day — it’s obvious. Whether it was Soros or a terrorist attack or some combo of the two (and I’m not sure I would put Soros above consorting with those thugs), who knows, but whatever triggered this was deliberate. I mean, don’t get me wrong: The incompetent boobs in Congress did an exceptional job of priming the pump by pressuring banks to lend to uncreditworthy individuals, but that much money doesn’t get drawn down that quickly unless it’s a collective and calculated effort.
I think Rush and Fox News and the Journal need to get behind this and start pushing for an investigation.
NoLeftTurn on February 10, 2009 at 4:05 PM
But the SEC doesn’t have time to look into such things.
This was Bush’s biggest downfall. He tried to play nice with people who don’t want to play nice.
PappaMac on February 10, 2009 at 4:06 PM
How paranoid would I be to ask if this was a dress rehearsal for something bigger….
Pianobuff on February 10, 2009 at 4:03 PM
You’re seeing the first act of the play as we speak, further and more anguishing acts to follow.
Second Act: Fairness Doctrine.
Third Act: Repeal of the 2nd Amendment.
Fourth Act: 22nd Amendment, Never Heard Of It.
Bishop on February 10, 2009 at 4:08 PM
It makes you wonder if ANY of what he is saying is true. Listen to what he says in the video. According to him, there were massive withdrawals around 15 Sept 2008, from money market accounts and those markets were froze to stop the withdrawals. How could such an event be kept secret?
Maxx on February 10, 2009 at 4:12 PM
Yup, Kanjorski is my beloved congressman. I’ve been cursing him for years. I’m still at a loss as to why he was one of the 11 Dems that voted against the bill in the house. He’s usually just a Dem toady. Maybe he actually took all this to heart and used his head for once.
Jeff on February 10, 2009 at 4:12 PM
High time to make an object lesson of the crooks behind all this…with extreme prejudice.
Christien on February 10, 2009 at 4:13 PM
that amount of money means some group somewhere are colluding together behind the scenes somewhere.
jp on February 10, 2009 at 4:13 PM
They must have told Schumer the financial crisis would cut off the power to his microphone.
Chuck Schick on February 10, 2009 at 4:13 PM
That’s the scariest thing I’ve heard in years.
ronsfi on February 10, 2009 at 4:14 PM
Rush was all over it today.
becki51758 on February 10, 2009 at 4:14 PM
I manage some money for myself and others. Nearly every dollar we had among several MM funds was withdrawn. They weren’t insured, and except for the prime funds, most MM funds had exposure to some of the failing Wall street firms. It was an unacceptable risk. Much of that money went into Treasuries of any kind. As far as I know, most others did the same.
JiangxiDad on February 10, 2009 at 4:15 PM
That’s the scariest thing I’ve heard in years.
ronsfi on February 10, 2009 at 4:14 PM
You obviously didn’t hear the words, “Obama Wins Election”.
Bishop on February 10, 2009 at 4:16 PM
I heard this on Rush today also. It sounds like something right out of a Tom Clancy novel.
If it can be proven that Soros had anything at all to do with this, and I believe it possible, as few people in this world hate this nation more than he does, as well as that have the clout to pull something like this off, then maybe it is time something was done about this clown.
-Dave
Dave R. on February 10, 2009 at 4:16 PM
btw, today there is a similar flight to safety from the stock market and into treasuries. It could go into MM’s because they are now temporarily insured.
JiangxiDad on February 10, 2009 at 4:17 PM
If its Domestic Enemies only, behind this:
-Look at the Big Hedge Funds Managers(usually Democrats)
-George Soros, the Progressive Insurance guy, and other DNC sugar daddies.
-Investment Bankers, here and globally…
all connected in someway with Schumer.
If its Foreign Enemies only:
-Jihad attack, look at Middle East money colluding together somehow.
-Don’t rule out Russia and China obviously, china has alot of cash.
-other Commies around the globe.
Worse case scenario the two groups are working together, perhaps with a Soros as the Middleman.
jp on February 10, 2009 at 4:18 PM
TOO BAD. THAT’S WHAT WE DESERVED FOR SCREWING UP OUR ECONOMY. DO THEY THINK THE COLLAPSE OF THIS INSANE BOONDOGGLE WILL BE ANY EASIER????
ITS CALLED CATHARSIS.
Sorry for the shouting, but I DON’T FREAKING CARE if they think the economy would have collapsed. They’ve also been saying for the last 10 years that temperatures should be rising, but they’ve been falling.
jimmy the notable on February 10, 2009 at 4:18 PM
fuhgidaboudit
thomasaur on February 10, 2009 at 4:18 PM
We were talking about it here in real-time here on HA so I’m not sure how it could be considered closely guarded. It was well known to anybody paying attention. It was triggered the night before when one of the large money markets broke the buck. You might actually learn something if you take the time to read the comments once in a while AP.
TheBigOldDog on February 10, 2009 at 4:20 PM
Let’s assume it was Soros. (By the way, do you have any evidence of that?) What is it, exactly, that you would investigate? A man withdrawing his cash from money markets? That’s a crime?
paul006 on February 10, 2009 at 4:21 PM
Dollar to a donut says you’re right, NLT.
And I too hope Rush, Fox News and the Journal jump on this and start pushing for an investigation.
petefrt on February 10, 2009 at 4:23 PM
So, according to Kanjorskski, in mid-September between 11 AM and 1 PM, $500 billion (!) was pulled from MM accts. in the US (and went WHERE – into cash, gold, bonds, under the depositor’s mattress, etc.) and by their estimates, if allowed go on for a few more hours would have crashed the entire global economy? WHAT? I don’t know about you all, but if our financial system is that fragile, then O is the least of our worries – and begs the question about whether he’ll be able to survive his first term politically or not – since it’s pretty clear that unless he delivers BIG (like sub-5.5% unemployment, reasonable inflation and a climbing DOW) then he’s already in trouble – and he’s less than 30 days in. Something doesn’t sound right here – and remember, Bernacke endorsed O which means that either he’s an idiot (possible) or this was intended to scare and tank the market, thereby ushering O into office.
volnation on February 10, 2009 at 4:24 PM
I smell treason. We haven’t had a really good treason trial in ages. I wonder if anyone even knows how to go about it? We still have a justice system – right? I mean except for terrorists. Aww man. Obama just killed that off didn’t he. Was there a back up plan anywhere in that order to shut down the courts? Otherwise we may just have to go straight to the execution phase of the process.
BrideOfRove on February 10, 2009 at 4:26 PM
If you say it, I believe it JiangxiDad, but it seems the WSJ would have screeched that in red-bold print the next morning, or did they?
Maxx on February 10, 2009 at 4:27 PM
This was true. The money flowed out because all the folks that had money in moneymarkets which are almost cash assets saw the banks failing, one after another, and said I will pull it out and keep it in cash if needed. Do you have any idea how much is in 401ks and they yanked that money also.
I pulled the money I had left. The banks also had no confidence to loan another, so bank to bank trading just stopped because they did not know if the bank would exist the next day.
Bush does not scare easily and he pushed this through fast. Bush is not totally ignorant about economics, but he was scared about a collussus bank run.
I was talking about a guarantee on money markets just for this reason and then they did it. There was no guarantee on money markets just confidence in the banks. Our entire economy runs on confidence and if you are scared you can’t get your money or it will be gone if you wait, you take your money fast. With the internet banking this was done at data speeds.
RAH on February 10, 2009 at 4:30 PM
As much as I’d love to claim it was some sort of plot, it wasn’t. It was predicted the minute one of the large money markets broke the buck (the price of a share fell below $1. Money markets are managed to have a stable “share” price of $1 and the interest rate floats based on market conditions. They are considered very safe for that reason.) When people saw that, they fled money markets assuming they were no longer safe. They fled to T-Bills and actually drove the yield down so low people were in reality paying the government to keep their cash safe.
Again, anybody who wants to feel better about this and put their mind at ease can search this site for my user name and read what I was posting around this time.
TheBigOldDog on February 10, 2009 at 4:30 PM
Why?
(Are we allowed to ask that?)
Jim Treacher on February 10, 2009 at 4:32 PM
and it was all just requested by millions of different people at the exact same time?
the other thing is what made the banks collapse, where they looked good on paper on a Friday and were bankrupt by Monday: Credit Default Swaps.
jp on February 10, 2009 at 4:33 PM
That’s because I had my ears covered. NONONONONONONONONO!
ronsfi on February 10, 2009 at 4:33 PM
It was Schumer. History will not be kind to him.
BrideOfRove on February 10, 2009 at 4:35 PM
Would it also be rude to ask for some kind of documentation to back this up? Because for me, it just doesn’t really pass the sniff test. I moved my MMA funds from one bank, but only to put it in another, more solid bank at a lower interest rate. It’s not like people suddenly put $500B in folding money under their mattresses . . . it had to go somewhere and, hence, remain in the system. Or am I just stoopid?
califcon on February 10, 2009 at 4:36 PM
Before you all turn into a bunch of Truthers, you all should read this:
Money market breaks the buck, freezes redemptions
Reserve Primary Fund stung by Lehman collapse, investor withdrawals
By Sam Mamudi & Jonathan Burton, MarketWatch
Last update: 9:11 a.m. EDT Sept. 17, 2008
TheBigOldDog on February 10, 2009 at 4:37 PM
TheBigOldDog on February 10, 2009 at 4:30 PM
Well, I knew about the $144 billion being taken out, but I had not been aware of the $550 billion.
Maybe I wasn’t paying close enough attention back in September, as I was trying really hard to save my job, or I read way too much Clancy back in the day. :-)
-Dave
Dave R. on February 10, 2009 at 4:42 PM
It went from Money markets that are in commercial paper (short term loans to businesses) to short, medium and long-term loans to the government (T-Bills). We aren’t talking about just individuals here. We are talking about institutional investors, businesses, governments, sovereign wealth funds, etc.
TheBigOldDog on February 10, 2009 at 4:42 PM
No evidence, but his bet on the English Pound sure paid off in 1992. Of course it’s not a crime to cash in but if it is true he gave us a wonderful October suprise that he did see it coming before it happened.
Burgher on February 10, 2009 at 4:45 PM
It would be interesting to see if there was any pattern in the sell off…
Illegal? No… but politics don’t just run on legal and illegal… but moral and immoral as well.
Romeo13 on February 10, 2009 at 4:47 PM
Ah . . . thank you, BigOldDog. I did start self-medicating a bit early today, not sure anyone would blame me. And that Sept. 17 article you linked was very interesting, too. I hope I wasn’t wrong just letting my IRA sit and hope it would rebound. I can’t even look anymore, I’ve lost at least 50% equity. Very disheartening.
califcon on February 10, 2009 at 4:48 PM
Our banking system is based on trust. I give my money to the bank and when I ask I get the full amount back. Now the bank loans this money and that loan also gets sold so the multiplier is $3 for every dollar I put in. The banks are supposed to keep reserves but the reserves amounts have been lowered, which is called leveraging. The euro banks were leverage at higher than 30:1 and US banks were about that. Canada banks had kept conservative banking reserve rules and limited to 18:1 so they did not suffer. The English had 2 banks in one day lose the money from runs and the French had 2 or 3 banks. The English shoveled money into the banks. The Irish instead gave guarantees and all the English money from depositors ran to the Irish banks.
Turns out that Paulson was going to let AIG fail and the French called Bush because they had the investments that AIG insured and it would cause bank failures. AIG insured the MSBE’s (Mortgage backed security equities), when the equities went south and no one knew the real value of the equities that called in on the insurance. AIG did not have enough reserves to pay the claims on $2-6 trillion in equities worldwide. The total values of mortgages are over 12 trillion I believe worldwide. Russia does not allow mortgages, homes are paid in full but even they suffered.
This even affected China and Japan who had also invested in MSBE’s. No one knows the full extant of how many are bad mortgages or not. Most are good. But each mortgage was sold 2-12 ways and who even owned the mortgage is
Do you really think that Citibank which bought Merrill Lynch which had corrected a lot of bad investments in the year previously and all the other good banks would have been pressured to buy the assets of the failures otherwise?
All this was in the news if people paid attention. I read it here and other places.
RAH on February 10, 2009 at 4:51 PM
Thanks for the link.
Maxx on February 10, 2009 at 4:55 PM
Exactly the Credit Default swaps were insured by AIG and the mortgage collapse by Fannie and Freedie Mac and all the other institutional investors had the value of investments fall by 50-90%. No one knew the real value of the real estate,they were based on inflated valuations. The amount of bad mortgages was not that great and but they were spliced into all these MSBE’s and tru to figure it out. I found out that my mortgage was sold to Fannie Mae and it was split in a MSBE , so who knows who owns what share of my house.
RAH on February 10, 2009 at 4:59 PM
I question the
timingMessiah. It was perfectfor the Messiahtiming.wccawa on February 10, 2009 at 5:06 PM
The Reserve Primary Fund broke the buck and had a run causing it to shut down. They are being sued because in a conference call to institutional investors, they indicated that they MIGHT break the buck, causing a run on their fund. They are being sued for giving institutional investors a headups and leaving the individual investor (including me) to fend for themselves. If this happened elsewhere, I can see that the large investors would create this situation of 500 billion leaving funds. I would definitely like to see an investigation.
Aggie85 on February 10, 2009 at 5:07 PM
My dad’s a CPA and he says all the AIG guys belong in jail.
funky chicken on February 10, 2009 at 5:09 PM
A coup d’etat with no fingerprints. I’ve always had suspicions about the timing of this “crisis”. Obama couldn’t ahve won without it, I’m convinced. McCain had Palin-inspired momentum.
ddrintn on February 10, 2009 at 5:10 PM
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