Here comes the capitulation phase

Republican senator Kanjorski:(+/- 2:10)
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 [2008 -- that would actually have been the evening of 18th-19th].

Here’s the facts, and we don’t even talk about these things. On Thursday [that would have been September 18, 2008], at about 11 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 was being drawn out in a matter of an hour or two. The Treasury opened up its window to help. They pumped $105 billion 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 accounts, and announce a guarantee of $250,000 per account so there wouldn’t be further panic out there. And that’s what actually happened.

If they had not done that, their estimation was that by 2 o’clock that afternoon [Sept 18, 2008] $5.5 trillion 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.

Now we talked at that time [Sept 18th-19th?] 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 act and do things quickly we did.