Washingtons Bailout Proposal Offers Little Assurance

WONG: Today, U.S. President George W. Bush tried to assure Americans that his economic bailout package was a crucial step in helping businesses cope with Wall Street's recent failure. STORY: U.S. stocks took a pounding on growing concern that neither the Federal Reserve's efforts nor a $700 billion bailout would be enough to thwart a painful recession. The White House said it was working to ease credit strains at home and abroad and is keeping a close eye on the global situation. The U.S. central bank said it would begin paying interest on the reserve notes held at the Fed. This allows the Fed to keep flooding the markets with cash without driving its benchmark federal funds rate below target. After a year-long credit crisis, the U.S. bailout package failed to quiet investors' concerns about the U.S. financial system and the broader economy. A series of bank rescues in Europe over the weekend added to worries that the problems were quickly spreading. The situation sparked calls for stronger international cooperation to stem the tide of bank failures. A committee of top financial regulators that President Bush convened to address the crisis, said market conditions were extremely strained.

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YouTube | October 8, 2008

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