Bush urges patience amid more depressing economic newsOctober 17th, 2008 - 11:40 pm ICT by IANS
Washington, Oct 17 (DPA) US President George W. Bush again urged the American public to be patient and said it would take time for banks to begin lending again as more dire economic news Friday suggested the US economy was headed towards a recession.Bush insisted the government was taking “systematic and aggressive” measures to stabilise financial markets but denied that that the dramatic moves were a step towards nationalisation.
The Treasury earlier this week unveiled a plan buy up some $250 billion-worth of shares in major banks participating in the government’s rescue plan. Similar plans have been announced in Europe.
Bush promised the government would have only a limited stake over a limited time in individual banks and said federal officers would not be dictating daily policy.
“The government intervention is not a government takeover. It’s purpose is not to weaken the free market. It’s to preserve the free market,” Bush said in a speech to the US Chamber of Commerce.
“We must not blur the line between the government and the private sector,” he said.
US markets have been on a roller-coaster ride this week amid uncertainty over the state of the world’s largest economy. The Dow Jones Industrial Average climbed nearly 5 percent Thursday but plunged more than 7 percent a day earlier.
Lending to consumers and between banks has shown few signs of loosening up despite governments this week offering guarantees of interbank lending, and Bush warned it would take time.
“It took a while for the credit system to freeze up. It’s gonna take a while for the credit system to thaw,” Bush said.
Bush’s address came as housing starts for single family homes fell to a 26-year low in September, signalling the housing downturn at the heart of the financial crisis has yet to reach bottom.
Housing starts fell 6.3 percent from August to 817,000, the Commerce Department reported, as construction companies struggled to lure in new buyers in a weak market.