<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>anamax</author><text>&amp;#62; Non-depository institutions (like the surviving investment banks) would be forced into bankruptcy.&lt;p&gt;Forced by whom?&lt;p&gt;Banks are required by govt law to have more assets than liabilities, but many institutions and individuals owe more than they have to no ill effect.&lt;p&gt;In the short-term, cash flow is the only thing that matters and even that is under some control.  A bank can &quot;simply&quot; refuse to pay money that it doesn&apos;t have.&lt;p&gt;Yes, there will be consequences, but later, giving the bank time to do something useful.&lt;p&gt;However, current govt reserve requirements don&apos;t allow that.&lt;p&gt;Yes, I know the reason behind such requirements.  My point is that they make certain bad situations worse and it&apos;s not clear that such amplification is required for the claimed benefits.</text><parent_chain><item><author>mattobrien</author><text>This was a bank run, except it involved money market accounts. Money market accounts hold a lot of short term corporate debt. After Lehman went bankrupt, a few prominent money market accounts that held Lehman debt &quot;broke the buck&quot;, ie paid out less than what investors put in. Since money market accounts weren&apos;t insured at the time, this set off a panic. People likely called their fund managers, trying to redeem their funds, to move it to FDIC insured bank accounts. If fund managers tried to redeem over 50% of their funds at once (as some funds experienced), that would explain hundreds of billions of dollars draining out in an hour.&lt;p&gt;If the money market accounts crashed, financial companies wouldn&apos;t have been able to roll over their short term debt, which they rely on for day-to-day operations. Non-depository institutions (like the surviving investment banks) would be forced into bankruptcy. Those bankruptcies would cascade, and depository institutions would fail as well, probably with bank runs on accounts over the FDIC limit.&lt;p&gt;What made the Great Depression great were the banking crises. Without a functioning financial system, a modern economy can&apos;t grow. And if we reached a point where people couldn&apos;t even get money out of ATMs, we&apos;re talking about complete social breakdown. One Congressman claimed the administration talked about martial law as a real possibility. We really did come close to the brink. And the downward cycle went even faster than prescient bears like Nouriel Roubini thought it would.</text></item><item><author>ryanwaggoner</author><text>Can someone explain this to a non-finance / non-macroeconomics type?  Was it foreigners who were pulling money out?  Was it people in the US?  If they pull $5.5 trillion in cash out, where would it have gone?  Just don&apos;t understand why everything would have collapsed.</text></item></parent_chain></comment><story><title>How The World Almost Came To An End At 2PM On September 18</title><url>http://zerohedge.blogspot.com/2009/02/how-world-almost-came-to-end-at-2pm-on.html</url></story>
<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>jacquesm</author><text>Thank you, that&apos;s the clearest explanation of this whole thing that I&apos;ve read to date.</text><parent_chain><item><author>mattobrien</author><text>This was a bank run, except it involved money market accounts. Money market accounts hold a lot of short term corporate debt. After Lehman went bankrupt, a few prominent money market accounts that held Lehman debt &quot;broke the buck&quot;, ie paid out less than what investors put in. Since money market accounts weren&apos;t insured at the time, this set off a panic. People likely called their fund managers, trying to redeem their funds, to move it to FDIC insured bank accounts. If fund managers tried to redeem over 50% of their funds at once (as some funds experienced), that would explain hundreds of billions of dollars draining out in an hour.&lt;p&gt;If the money market accounts crashed, financial companies wouldn&apos;t have been able to roll over their short term debt, which they rely on for day-to-day operations. Non-depository institutions (like the surviving investment banks) would be forced into bankruptcy. Those bankruptcies would cascade, and depository institutions would fail as well, probably with bank runs on accounts over the FDIC limit.&lt;p&gt;What made the Great Depression great were the banking crises. Without a functioning financial system, a modern economy can&apos;t grow. And if we reached a point where people couldn&apos;t even get money out of ATMs, we&apos;re talking about complete social breakdown. One Congressman claimed the administration talked about martial law as a real possibility. We really did come close to the brink. And the downward cycle went even faster than prescient bears like Nouriel Roubini thought it would.</text></item><item><author>ryanwaggoner</author><text>Can someone explain this to a non-finance / non-macroeconomics type?  Was it foreigners who were pulling money out?  Was it people in the US?  If they pull $5.5 trillion in cash out, where would it have gone?  Just don&apos;t understand why everything would have collapsed.</text></item></parent_chain></comment><story><title>How The World Almost Came To An End At 2PM On September 18</title><url>http://zerohedge.blogspot.com/2009/02/how-world-almost-came-to-end-at-2pm-on.html</url></story>