• This is a rush transcript from "Your World With Neil Cavuto," November 24, 2008. This copy may not be in its final form and may be updated.


    GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We have made these kind of decisions in the past. Made one last night. And, if need be, we're going to make these kind of decisions to safeguard our financial system in the future.


    NEIL CAVUTO, HOST: All right, well, more to come? I have heard of too big to fail, but have we moved on to too many to ignore?

    Let's ask Richard Grasso, the former chairman of the New York Stock Exchange, the very bastion of capitalism, right? Yet, Dick does not have a problem with some of our biggest capitalist institutions getting some big government help.


    RICHARD GRASSO, FORMER CEO, NEW YORK STOCK EXCHANGE: I think that is good public policy, when the government steps in Neil, and recognizes that the free market has spun into a free-for-all market.

    Video: Watch Neil's interview with Richard Grasso

    What you saw in Citi last week, I mean, very, very hard to defend. I think the action taken over the weekend absolutely essential.

    CAVUTO: Why?

    GRASSO: It sends a message of confidence to consumers, to savers, to investors, and, more importantly, that the broader financial system is not going to have to deal with a bank with a $1 trillion worth of deposits going into a state of disarray.

    CAVUTO: But what if the same thing happens to Bank of America? What if the same -- you know, on and on, we go.

    GRASSO: Well, I think the government's role here is to get in there and stabilize as quickly as they can, and then get out.

    One of the problems I hope we will address in the new administration is the issue of how you stabilize real estate, particularly homes, the homes that are on the teeter of default, particularly long-term mortgages that are now going to spring to level that the consumer can't afford them.

    We're at a debt level that has never been -- has never been examined closely. I think what we can do, as a government, is to step in and do a massive refinancing, put out 40- or 50-year paper, stabilize the real estate market.

    CAVUTO: You know what retirement has done to you? You have become like a liberal. You trust the government.

    GRASSO: What -- what do you mean by become?


    CAVUTO: No, you know what I'm saying? I mean, it just -- it is out of control. I mean, I can understand the reasoning. Look, we -- too big to fail. And then all these other institutions too big to fail, too big to fail. And then the auto industry comes up. We had the housing industry today wants a $200 billion relief package.

    It is getting crazy, Dick.

    GRASSO: Create the right stability in real estate and in our financial institutions.

    CAVUTO: We're not. We're throwing money like, you know...

    GRASSO: Well, I think it is yet to be seen the impact of some of the actions went TARP when got reversed into capital infusion.


    CAVUTO: But, see, that was proof they were making this up as they were going along.

    GRASSO: Well, I don't think they were making it up.

    I think what you heard the secretary say is that facts were changing. Circumstances...


    CAVUTO: No. He said, you know, like, when you recode the words, I was making this up.


    GRASSO: Remember, this is not the NFL. We can't have an instant replay here, Neil, OK? So, you have to take what we have done and move on to something better.

    CAVUTO: Yes, but with the NFL, it is not as if you are throwing billions on the chance that, if you re-watch the videotape, you will think, hey, I'm not going to do that again.

    GRASSO: Well, I think what you do have is a set of public policy- makers, both in terms of the incumbents and those coming in, who recognize the real challenge is stabilizing financial markets. They're going to do that.

    CAVUTO: They are not stable. Don't buy today's -- you know what has happened.

    GRASSO: Well...

    CAVUTO: In six out of seven rescues, it is down the next day.

    I don't know what is going to happen. But I do know this. The Dow is down 3,000-plus points since they talked about this, right? There's not a great deal more lending going on. And maybe it happens eventually, but it has not happened yet. So, we have spent, you know, what, $1 trillion, $2 trillion, who knows, and...

    GRASSO: Are we closer to the bottom or to the top?

    CAVUTO: I have no idea. You're the money guy.