The Federal Reserve pumped $10bn of liquidity into the banking sectors and in New York the blue chip index experienced the losses and was lowered only by 16 at 13,272. Again, Freddie Mac, the American government sponsored mortgage aggregator that purchases loans and presses them into repackages as sorts of securities to expenditure down for low-income households divulged that it had adopted a $320m hit on credit crunch within the timeframe of three months to June.

Standard & Poor’s, the credit rating agency, did forecast by claiming that there would be more hazards in future for investment banks which could watch their banking and trading profits downfall by 70%. Furthermore, in a research work, S&P’s credit analyst named Nick Hill stated that the revenue for Wall Street institutions could be at attrition level as much as 47% which is little bit worse in comparison to the 31% nosedive in the second part of 1998 when the markets were given a jolt by an financial crunch in Asia and monetary devaluation in Russia. Therefore these factors own the responsibility to enhance the ongoing possibility of the credit crisis in the American economy. Steve Akers of liquidators Grant Thornton, stated that assets in Britain and America need to be kept intact and protected  due to financial crunch. According to the Greenwich Associates, the consultancy, hedge funds are no longer considered to be an integral part of the market for the fixed-income products.

In this context the Bush administration was informed beforehand by the Bank of International Settlement, the World Bank, the International Monetary Fund and the European Central Bank regarding their wrong economic policies which would enhance the occurrence of credit crisis in the country. However it is a matter of grave concern that the then Bush administrative machinery connived at the warning.