As the financial and housing crisis worsens in the US, President Bush has been trying to reassure the American people and the world’s investors.
Addressing the problems of Fannie Mae and Freddie Mac, the two biggest US mortgage finance companies, Bush said the US Congress should act quickly on a plan to shore them up with government money: “I urged members to enact the plan in its entirety along with the good oversight legislation that we have recommended for both Fanny Mae and Freddie Mac.”
At the same time, just down the road, US central bank head Ben Bernanke, testifying before the Senate Banking Committee, issued stark warnings about threats to the fragile economy and said: “As events in recent weeks have demonstrated, many financial markets and institutions remain under considerable stress. Consequently, helping the financial markets to return to more normal functioning will continue to be a top priority of the Federal Reserve.”
The uncertain economic outlook is hitting US companies hard, like the world’s biggest carmaker, General Motors, which has seen sales slump and investor expressing doubts about whether it can ride out the downturn. It has just announced further restructuring, cutting costs by 6.25 billion euros including more job losses, selling up to 2.5 billion euros of assets and borrowing at least 1.25 billion euros to improve its liquidity.