Saturday, October 11, 2008

George W. Bush, the President of the United States, has attempted to reassure Americans on the economy in his weekly radio address.

“Over the past few days, we have witnessed a startling drop in the stock market — much of it driven by uncertainty and fear,” he said, introducing the address. “Many Americans have serious concerns about their economic well-being.”

Bush then pointed out the action that the government is taking. “Here are the problems we face and the steps we are taking: First, key markets are not functioning because there is a lack of liquidity. So the Federal Reserve has injected hundreds of billions of dollars into the system. The Fed has joined with central banks around the world to coordinate a cut in interest rates — a step that should help free up credit. The Fed has also announced a new program to provide support for a vital tool that many American businesses use to finance their day-to-day operations — the commercial paper market, which is freezing up. As this program kicks in over the next week or so, it will help revive a key source of short-term financing for businesses and financial institutions.”

“Second, some Americans are concerned about whether their money is safe,” continued the president. “So the Federal Deposit Insurance Corporation and the National Credit Union Administration have significantly expanded the amount of money insured in savings accounts and checking accounts and certificates of deposit. That means that if you have up to $250,000 in one of these insured accounts, every penny of that money is safe. The Treasury Department has also acted to restore confidence in a key element of America’s financial system by offering government insurance for money market mutual funds.”

Bush then said that there was an issue with fraud in the economy. He stated that, to address this issue, “the Securities and Exchange Commission is launching rigorous enforcement actions to detect fraud and manipulation in the market.”

The Dow Jones Industrial Average yesterday fell to its lowest level in five years at 8,579.19, falling 679 points in one day. This, at 7.3%, is the eleventh largest percentage fall in the history of the index. The growth then continued, with the index being up over 150 points on the start of the day at one point.

The index, did however, recover, and as of 19:30 UTC was up 17.68 points, or 0.21%, pushing the index up to almost 8600.