Why People Buy Treasuries During Panics

"Applied to the recent recession, consider that by the summer of 2008 we already had failures of Bear Stearns and Fannie Mae, two venerable institutions. It was not clear what the essence of the problem was--CDOs? Complexity? Banks? Mortgages? Copulas?--so investors simply knew that something was rotten, and it seem probable that some people knew what was going on, leaving one in the proverbial position of the guy at the poker table who doesn't know who the sucker is. This causes everyone to get alligator arms and jump into the least risky thing they can think of--the dollar, US Treasuries. With investment down, profits plummet, leading to a general recession."