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On Thursday SEPTEMBER 11, 2008 at 11AM -
$550 Billion Electronic Run On U.S. Banks Nearly TriggeredFinancial Collapse
At 2 minutes, 20 seconds into this C-Span video clip, Rep. Paul Kanjorski of Pennsylvania explains howthe Federal Reserve told Congress members about a "tremendous draw-down of money market accountsin the United States, to the tune of $550 billion dollars." According to Kanjorski, this electronic transferoccurred over the period of an hour and threatened a further $5 trillion to be drawn out triggering a totalcollapse of the Financial System, which prompted Hank Paulson's emergency $700 billion TARPbailout action.
See video here:
 http://www.youtube.com/watch?v=_NMu1mFao3w
 
FED noticed drawdown:Electronic Bank Run saw $550 Billion dollars withdrawn from Money Market Funds in 1 or 2 hours.Treasury injected $105 Billion but it wasn't enough.Treasury closed Money Market Accounts and announced a guarantee of $250,000 per account.
 
It was estimated that by 2 PM $5.5 TRILLION would have been withdrawn.Would have collapsed the U.S. economy and in 24 hours would have collapsed the world economy.Would have been the end of our economic and political system.
Hold hearings on electronic run on banks
Monday, February 16, 2009 6:52 AM ESTBy Diana WestREAD a snatch of transcript from a Jan. 27 C-SPAN interview with Rep. Paul Kanjorski, D-Pa., that hasreceived zero coverage in mainstream media.Kanjorski is harkening back to last September, when Sen. John McCain was enjoying his brief lead inthe presidential polls and the economy was imploding. Here's what Kanjorski said:"I was there when the secretary (of the Treasury, Hank Paulson) and the chairman of the FederalReserve (Ben Bernanke) came those days and talked to members of Congress about what was going on.It was about Sept. 15. Here's the facts, we don't even talk about these things."On Thursday at about 11 o'clock in the morning, the Federal Reserve noticed a tremendous drawdownof money market accounts in the United States to the tune of $550 billion, as being drawn out in thematter of an hour or two."The Treasury opened up its window to help. It pumped $105 billion into the system and quicklyrealized that they could not stem the tide. We were having an electronic run on the banks. They decidedto close the operation, close down the money accounts and announce a guarantee of $250,000 peraccount so there wouldn't be further panic."Kanjorski continued:"If they had not done that, their estimation was that by 2 o'clock that afternoon, $5.5 trillion would havebeen drawn out of the money market system of the United States, would have collapsed the entireeconomic system of the United States and within 24 hours the world economy would have collapsed."Now we talked at that time about what would happen if that happened. It would have been the end of our economic system and our political system as we know it. And that's why when they made the point
 
we've got to do things quickly, we did."These are staggering revelations. You have to wonder, could they possibly be true? If so, why weren'twe told about this $550 billion electronic run on the banks? Why haven't we heard a word of it since?Even since Kanjorski spoke on C-SPAN last month, there has been scant coverage. The story has beenlittle more than blog fodder, appearing with little comment. Writing atPortfolio.comlast week, FelixSalmon dismissed the story as "fiction."If what Kanjorski said is "fiction," Americans, particularly in Kanjorski's Pennsylvania district, need toknow. This isn't a story that just goes away on its own, particularly not when Kanjorski is chairman of the Capital Markets Subcommittee of the House Financial Services Committee.Of course, incredible as Kanjorski's revelations were, almost equally incredible was the interviewer'sfailure to ask the obvious question: Who or what was responsible for that electronic run on the banks?That's where radio personality Rush Limbaugh went: "Let's assume that there was a $550 billion. ... Thequestion is who was doing this? Who was withdrawing all this money? And the next question is why? ...Could it have been (countries) eager to have Barack Obama elected because they know that will make iteasier for them to continue their own foreign policies?"I've heard people float similar theories regarding financial attacks on our economy, but who knows?We do know that President George W. Bush made extremely cryptic statements regarding the stabilityof our markets at the time in question. These began with a Sept. 18 Bush announcement that theSecurities and Exchange Commission was stepping up its enforcement action "against illegal marketmanipulation." Manipulation by whom or what? On Sept. 19, Bush further announced that the SEC had"launched rigorous enforcement actions to detect fraud and manipulation in the market. Anyoneengaging in illegal financial transactions will (be prosecuted)."Again, what was Bush talking about?On that same day, the SEC announced a "sweeping expansion" of an ongoing investigation into possiblemarket manipulation. What was going on? If ever there was a compelling reason for congressionalhearings, Kanjorski's story is it.
Diana West is a columnist for The Washington Times, 3600 New York Ave., N.E., Washington,D.C. 20002. E-mail:
dianaww@verizon.net 
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