New York – President Bush on Friday defended the recent federal intervention in the financial system should refuse to wider economic crisis and said the actions are not only Wall Street bailout.
“If the government has not acted in a hole in our financial system would have gotten bigger,” he said.
Bush’s comments – his 34th public statement on the economic crisis since the collapse of Lehman Brothers in mid-September – came just a few minutes after the Department reported that initial construction of commerce homes in the U.S. fell to a fresh 17-year low in September. Housing starts fell to 817,000 housing units, down 6.3% from 872,000 housing start before the month.
Wall Street got off to another rough start on Friday, with falls DOW more than 200 points. Stock prices were very inconstant. This week alone, the DOW Jones had its second largest daily point gain and the second largest drop ever.
Many of the recent measures taken by the U.S. government to address the ongoing economic crisis – and the credit freeze in particular – the most sweeping 700 billion dollars in newly-approved funds to be used, in part, to invest in banks and bad acquire mortgage assets. The aim is to liberate the largest banks to extend credit again.
Bush said that the government would limit its intervention on the size and scope, and does not intend to citizenship in the banking system. “Government intervention is not a take-over,” he said.
However, the Government has taken a 79% stake in battered insurance giant American International Group (AIG, Fortune 500), in exchange for its initial.