Money Market Accounts Panic
Recently on CSPAN, Rep. Paul Kanjorski (D-PA) discussed the reasons for the bank bailout in September. The CSPAN video below is amazing. Representative Kanjorski states that on September 18, 2008 there was widespread panic among money market account holders. Within hours over $550 billion was withdrawn from moeny market funds across the nation. While the Federal Government spent over $105 billion to try to stop the run on the money market accounts, it quickly realized that it could not prevent the run. Therefore, the Federal Government temporarily closed down the money market accounts.
According to Rep. Kanjorski, this would have been “the end of our economic/political system as we know it.” That is a really bold statement. Quickly the Federal Government agreed to cover money market accounts under the FDIC insurance program and raised the FDIC limits to $250,000.
You absolutely need to watch this video. There are many amazing statements made by Rep. Kanjorski.