I think that we’ve all seen the video (below) where Rep. Paul Kanjorski (D-PA) said on CSPAN that there was a run on the money markets, and we were hours away from a complete meltdown of the financial system.

The money quote, if you don’t want to watch the vid, is, “If they had not done that, their estimation is that by 2 p.m. that afternoon, $5.5 trillion would have been drawn out of the money market system of the U.S., would have collapsed the entire economy of the U.S., and within 24 hours the world economy would have collapsed. It would have been the end of our economic system and our political system as we know it.”

The New York Post, the right wing flagship of Rupert Murdoch’s media empire, and there are no on the record sources, though there is a cool graphic with Marlon Brando from Apocalypse Now (right).^*

So, not only is the story completely based on anonymous sources, but there are no other contemporaneous reports of this happening.

Enter Felix Salmon of Portfolio.com, who looks at the underlying data, and finds out that it never happened. There was no massive run on the banks.

There were a lot of redemptions to the tune of tens of billions of dollars a day, not trillions per hour.

So, how did this bit of disinformation get out, and why did it get out to a paper not known for financial reporting in the financial capital of the world?

Inquiring minds want to know.

^*As a purveyor of news, the New York Post sucks, but I do like their headlines and the way that they spice up their graphics.