The crisis: A timeline

As investors hear bullish words from President George W. Bush and Berkshire Hathaway billionaire Warren Buffett, Commerce Department reports that the number of new single-family home constructions falls to the lowest level in 17 years.

On Friday, Oct. 17th, President Bush defended the government's $700 billion financial sector intervention before the U.S. Chamber of Commerce.

"If the government had not acted, the hole in our financial system would have gotten larger," he said.

Just minutes before, the Commerce Department reported that initial construction of U.S. homes had fallen to its lowest level in 17 years.

New construction of single-family homes, considered the core of the housing market, has declined by nearly two-thirds since hitting a peak in January 2006.

The Dow Jones industrial average managed to recover from a 200 point deficit by mid-day after strong earnings reported the night before by Google, and bullish comments by influential billionaire Warren Buffett, but pessimism regained control and the markets ended the day lower.

Internet giant Google reported a 26% rise in profits, despite the economic downturn.

Berkshire Hathaway owner Buffett wrote in a New York Times editorial that he would be moving his personal portfolio out of Treasury investments, which are often seen as a safe haven in times of market turmoil, into the stock market.

Despite Buffett's apparent long-term confidence, he said the economy may get worse before it gets better.

"In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary," Buffett wrote.

Automakers have been particularly hard hit as the financial crisis, coupled with high gasoline prices, have sent auto sales plummeting.

On Friday, auto giant General Motors continued to negotiate with privately held U.S. rival Chrysler about a possible merger, reports said.

Meanwhile investors continue to evacuate hedge funds as assets shrink, according to an industry report.

Despite much of the dismal talk on Wall Street, some companies such as Google managed to grow. Industrial giant Honeywell International Inc. also reported a strong third quarter, beating analysts' profit expectations.