By Richard Robinson
As the redemptions piled up, the analyst sat stunned.
This is so much worse than anticipated, he thought to himself. Nobody expected this level of outflows. What's going on?
Now, he knew the fund was prepared. In fact, an e-mail from the previous day indicated the company expected upwards of $1.5 billion in redemptions.
By 8:37AM, the company watched as more than $5.2 billion flew out the door... But that was only the tip of the iceberg.
You see, the company saw more than $40 billion in redemptions in about 24 hours. The bleeding stopped only when the fund's bank stopped wiring cash later that morning.
So what happened?
The day was September 16, 2008. It was one day after Lehman Brothers declared bankruptcy. But it would be best remembered for being the day a giant money market fund was brought to its knees.
On this day,… Read More …