Portfolio: Kanjorski Unsupported by Reported Facts

Apologies to politico; an earlier version of this diary cited them, and not portfolio.

There's a diary on the rec list which features Rep. Paul Kanjorski (D) (PA-11), saying: that in mid-sept (Sept 15? Sept 16?) that $550B had been withdrawn from money market accounts (there are more than one type) and the Treasury eventually insured them, later estimating that if they had not, they would have lost $5.5B trillion by 3pm -- potentially collapsing the US and world economies.

Felix Salmon of portfolio says, in effect "pics or it didn't happen." This has never been reported elsewhere, and there's no public information supporting it.

rerutled's diary :: ::
This is something of a problem: why hasn't what would be the biggest story of the year (total US economic collapse narrowly averted?) been picked up by any of the financial journalists?

Where's the public information which would support it?

While I'm willing to believe that a Representative on the Finance committee would know if this happened, even if the rest of us don't, I don't believe that it's a secret which nobody else can either prove or know about.

I'm with Salmon: "Pics or it didn't happen". Let's see some financial statements from somebody confirming the story.

I can't find any. I searched the Times, and the only reference to the money market insurance that week was on Sept 19th, reporting that the money market fell by $170B that week (after Lehman collapsed), and the total capitalization was $3.4B trillion(well below the $5.5B trillion referred to by Rep. Kanjorski, in an article reporting that (as Kanjorski was motivating) the Treasury would insure Money Market Funds to $250K.

The federal government took two aggressive steps on Friday to restore confidence in money market funds, which consumers have long considered to be as safe as bank savings accounts, but which have come under increasing stress in the current market turmoil.

..

Money funds held more than $3.4 trillion in investor funds, as of the most recent industry tally released Thursday, down almost $170 billion from the previous week. The Treasury said concerns about the value of money market funds falling below the standard net asset value of $1 a share — or "breaking the buck" — had heightened the financial turmoil and caused severe liquidity strains in world markets.

I would really like to see Rep. Kanjorski's numbers confirmed.
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