I was previously unaware at how close the US Economy came to complete failure immediately following the bankruptcy of Lehman Brothers. In an interview on C-Span, Rep. Paul Kanjorski of Pennsylvania, described how an electronic run on the bank almost overwhelmed the liquidity of the US Treasury.
According to him, within 1 hour, $550 billion was withdrawn, and if the Treasury had not closed down the accounts, within 3 hours, $5.5 trillion would have been withdrawn – enough to collapse the US Treasury system. If this had happened, the entire world’s banking system would have collapsed.
He said that after adding another $150 billion to the diminishing account, the Treasury was able to solve the problem by changing the FDIC insurance limit from $100,000 to $250,000. Apparently, this is what the closed door session between Ben Bernanke, Henry Paulson and the Congress was about that day.
Sourced from LiveLeak.com