Maybe he need to talk to China

[cato2]

Bush Aims to Pacify Investors, Touts Economy

(c) 2007 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.

WASHINGTON -- President Bush shrugged off concerns about stock- market turmoil, saying Wall Street is adjusting to a flood of liquidity and is beginning to "readjust its assessment of risk."

Mr. Bush, seeking to reassure jittery investors who have watched the market gyrate wildly, said the volatility is natural but the economy is strong and there is enough liquidity to absorb the ups and downs.

"If markets are given a chance, they will adjust in a way that is a necessary reaction to a flood of liquidity that came into the market over the last couple of years," the president said during a briefing with reporters at the Treasury Department.

Investors have been spooked as they try to discern whether a shakeout in the market for risky mortgages will lead to credit tightening throughout the economy. The flood of credit to which Mr. Bush was referring fueled a boom on Wall Street, providing loans for homeowners, including some with poor finances, and sparking a wave of corporate takeovers financed with debt. There is concern that a tightening in lending standards could hurt the broader economy.

Asked whether he was concerned that the shakeout could spread, Mr. Bush said it "all depends on if you're a glass-half-full or a glass- half-empty kind of guy." He said the U.S. economy is strong and that Wall Street will "look at the fundamentals of the economy," such as low unemployment and low inflation. He added that the correction in the housing market appeared to be heading for a "soft landing."

He also dismissed a proposal by some Democratic lawmakers to allow Fannie Mae and Freddie Mac to increase the amount of mortgages and related securities they can hold as a way of ensuring there's enough money to fund home loans. Mr. Bush said he'd "rather see their role reformed" before allowing them to expand their investment portfolios. The Bush administration has long argued that Fannie and Freddie's portfolios should be limited.

Mr. Bush's comments came after a meeting with his economic advisers and a speech in which he said Americans are benefiting from a strong economy in the form of low unemployment and an increase in real wages. Mr. Bush fielded economic questions for about 45 minutes, despite the presence of Treasury Secretary Henry Paulson and Edward Lazear, chairman of the Council of Economic Advisers.
Mr. Bush dismissed recent polls showing that U.S. citizens are feeling sour about the economy. A recent Wall Street Journal/NBC News poll showed that more than two-thirds of U.S. citizens believe the U.S. economy is either in recession now or will be in the next year.

He said he understands "there's disquiet out there" but attributed much of the economic anxiety to concerns about the war in Iraq. "I happen to believe the war has clouded a lot of peoples' sense of optimism."

Separately, Mr. Bush said he is considering proposing legislative changes to the U.S. corporate-tax code because the current system "makes us less competitive" with other countries. Such a proposal could include lowering the 35% corporate rate, which many executives say is too high and provides a disincentive to do business in the U.S.

"We may be able to devise a simplification that will enable us to have a tax code that's more competitive and that doesn't decrease revenue to the Treasury," Mr. Bush said. However, he said it would be a tough sell on Capitol Hill, where Democrats are in control. Indeed, the suggestions of Mr. Bush's own tax-reform commission went nowhere, even though Republicans were in control of Congress at the time.



http://lib.utep.edu/search/twall+street+journal/twall+street+journal/1,22,56,B/l856~b2105542&FF=twall+street+journal+eastern+ed+o nline&1,1,,1,0

China threatens to trigger US dollar crash
China threatens to trigger US dollar crash

[BrianK]

China, India, & Israel hold a lot of US debt that if "called" would collapse our economy. Not in their best interest to do so but it sure is a big stick to weild.

About 6 months back Shooterman & I spent a lot of time going back & forth over this very topic. Not much input by others which told me there isn't a lot of interest in world financials and how that would affect our daily lives.

There are cycles in how countries rise to world power and how they decline. Right now I'm holding my breath. I don't want to think we are teetering on the edge.

About the article and Pres. Bush. Any less optimism or lacking the promotion of "were OK" , and we'd be looking at 1929 as a cake walk relative to the population and dependence on gov. now. The violence, theft & lawlessness in New Orleans would IMO be but a blip on the pages of history compared to the chaos that would take place.