Bush acknowledges weakness in US economy

[Never Here]

Bush acknowledges weakness in US economy By JENNIFER LOVEN, Associated Press Writer

15 minutes ago

NEW YORK - Trying to calm jitters about the economy, President Bush conceded on Friday that the country "obviously is going through a tough time" but expressed confidence that it will rebound. He cautioned against overreacting to fix the problems.

In a speech to The Economic Club of New York, Bush said this was not the first time the economy has been rattled and that he is certain that it will ride out its troubles. "These are uncertain times," he said.

The president spoke as evidence of an ailing economy piled up. The dollar fell, oil and gold hit record highs, the economy is shedding jobs, retail sales saw a big drop and the effects of a severe credit squeeze linger. Economic worries have replaced the Iraq war as the No. 1 concern of voters in this presidential election year.

Bush acknowledged that prices are up at the gas pump and grocery stores and housing values are down — leading to worries among everyday "hardworking Americans." But he said low unemployment and strong productivity are proof of the economy's fundamental strength and resilience.

"Every time, this economy has bounced back better and stronger than before," Bush said.

The president also praised the work of the Federal Reserve. After cutting interest rates several times, the Fed said Friday it has voted to endorse an arrangement to bolster troubled Bear Stearns Cos. and stands ready to provide add liquidity to a combat a serious credit crisis.

"It was strong action by the Fed and they did so because some financial institutions that borrowed money to buy securities in the housing industry must now repair their balance sheets before they can make further loans," the president said.

"Today's events are fast moving, but the chairman of the Federal Reserve and the secretary of the treasury are on top of them and will take the appropriate steps to promote stability in our markets," Bush assured his audience.

The president chose American's financial center as the backdrop — and the titans of finance and commerce as the audience — for his attempts to calm nerves from Wall Street to Main Street.

The Economic Club of New York is an exclusive, wealthy, largely homogenous group of top executives. Speaking before the gathering had Bush somewhat literally preaching to the choir — the 101-year-old group's new chairman is Glen Hubbard, the first head of the White House Council of Economic Advisers for Bush.

He even drew a laugh when he opened his remarks with a not-so-veiled reference to the economy's ills. "It seems like I showed up in an interesting moment, a very interesting time," Bush said.

His main message, aside from optimism, stuck to Republican economic orthodoxy: warning repeatedly against too much government intervention.

For instance, while insisting his administration has an "active plan" to deal with the problems, Bush said he opposed several measures pending on Capitol Hill. They included proposals to allocate $400 billion to purchase abandoned and foreclosed homes, to change the bankruptcy code to allow judges to adjust mortgage rates, and to artificially prop up home prices.

"It's important not to overcorrect, because when you overcorrect, you end up in a ditch," Bush said. "It's important to be steady."

He said his administration would address the crisis "in a way that respects the ingenuity of the American people, that bolsters the entrepreneurial spirit and ensures that when we make it through this rough patch, that the driving will be smooth."

Bush took a veiled shot at Democratic presidential candidates Hillary Rodham Clinton and Barack Obama for their criticism of trade agreements that they say put American workers at a disadvantage.

"When times are tough, it's much easier to find somebody else to blame," the president said, without mentioning either candidate by name. "Sometimes that somebody else to blame is somebody in a distant land. It's easy politics. It's easy to go around and hammer on trade."

In a brief question-and-answer session, a member of the audience, noting that consumer prices are rising and the dollar is weak around the world, asked Bush whether the United States has an inflation problem.

"I agree that the Fed needs to be independent and make considered judgments and balance growth versus inflation," Bush said without answering the question directly.

"We believe in a strong dollar and I recognize that economies go up and down, but it's important for us to put policy in place that sends the signal that our economy is going to be strong and open for business."

He said the United States should not do "something foolish" during this economic period that will make it harder to grow, such as blocking capital from coming into the nation or failing to extend the tax cuts.

He said he had cautioned Saudi King Abdullah that he "better be careful about affecting markets" with high oil prices and that soaring fuel costs would prompt more investment in alternative sources of energy.

But, Bush said, "Our energy policy hasn't been very wise up to now." He avoided further discussion of prices, saying, "I'm going to dodge the rest of your question."

[questionmark]

Yeh..yeh... we know it, he inherited: " there is no recession, the economy is just hovering..." from his father

[ships-cat]

Give the guy a break. the President of the USA can't control global economic movements.

You might argue that he can influence them, and criticise... or not... his contribution. But remember that the president is a figurehead... and one that has only been in office for 8 years or so.

I would suggest that the current economic woes of the USA predate his term of office. By about 40 years.

Ho hum...

Meow Purr.

[questionmark]

Ho hum...

Meow Purr.

...just hovering....

[EmpressStarXVII]

I wonder if he has came to the point where he's lied so much he's convinced himself it's truth, or if someone is sugarcoating it for him since he doesn't seem to follow the economy on his own.

[questionmark]

I wonder if he has came to the point where he's lied so much he's convinced himself it's truth, or if someone is sugarcoating it for him since he doesn't seem to follow the economy on his own.

Judging by his successes as businessman and the state of the Texas treasury when he left, he would not recognize the economy if it bit his presidential behind.

[dmurdock36]

I wonder if he has came to the point where he's lied so much he's convinced himself it's truth, or if someone is sugarcoating it for him since he doesn't seem to follow the economy on his own.

I dont think he is smart enough to have lied, you have to understand what you are talking about to lie about it. He is just reading whatever they give him, he's about as sharp as a bowling ball and that is pushing it.

[Never Here]

Avoid overcorrecting economy, Bush warns By TERENCE HUNT, AP White House Correspondent

20 minutes ago

WASHINGTON - President Bush on Saturday said the government must guard against going too far in trying to fix the troubled economy, cautioning that "one of the worst things you can do is overcorrect." Democrats said Bush was relying on inaction to solve the problem.

Bush, in his weekly radio address, said the recently passed program of tax rebates for families and businesses should begin to lift the economy in the second quarter of the year and have an even stronger impact in the third quarter. But he urged caution about doing more, particularly about the crisis in the housing market where prices are tumbling and home foreclosures have soared to an all-time high.

"If we were to pursue some of the sweeping government solutions that we hear about in Washington, we would make a complicated problem even worse — and end up hurting far more homeowners than we help," the president said.

The economy has surpassed the Iraq war as the No. 1 concern among voters in this presidential election year amid big job losses, soaring fuel costs, a credit crisis and turmoil on Wall Street.

"In the long run, we can be confident that our economy will continue to grow, but in the short run, it is clear that growth has slowed," Bush said. He was spending the weekend at the Camp David presidential retreat in Maryland's Catoctin Mountains after delivering a speech in New York about the economy and helping raise $1.4 million for the national Republican Party.

Democrats said they would try to strengthen the economy with measures dealing with housing, energy efficiency and renewable energy.

"The president continues to convince himself that inaction is the cure-all for the economic problems hurting hardworking Americans," Senate Majority Leader Harry Reid said in a written statement. "But Democrats know that wait-and-see is not a responsible strategy for an economy that is teetering on the brink of recession."

"Wages and home values are down," Reid said, "but prices for everything from health care to tuition to energy are up. Just this week, oil and gas prices reached record highs while the value of the dollar reached historic lows. I hope the president, who has been slow to acknowledge this problem, joins us in recognizing how urgently we need a solution."

Bush said he opposed several measures pending on Capitol Hill to deal with the housing crisis. They included proposals to allocate $400 billion to purchase foreclosed-upon and now-abandoned homes, to change the bankruptcy code to allow judges to adjust mortgage rates and to artificially prop up home prices.

"Many young couples trying to buy their first home have been priced out of the market because of inflated prices," the president said. "The market now is in the process of correcting itself, and delaying that correction would only prolong the problem."

Bush said his administration has offered steps offering flexibility for refinancing to homeowners with good credit histories yet are having trouble paying their mortgage. He cited other measures which he said would streamline the process for refinancing and modify many mortgages.

He said there were steps Congress could take, as well.

"As we take decisive action, we will keep this in mind: When you are steering a car in a rough patch, one of the worst things you can do is overcorrect," the president said.

"That often results in losing control and can end up with the car in a ditch," Bush said. "Steering through a rough patch requires a steady hand on the wheel and your eyes up on the horizon. And that's exactly what we're going to do."

[AROCES]

"As we take decisive action, we will keep this in mind: When you are steering a car in a rough patch, one of the worst things you can do is overcorrect," the president said.

"That often results in losing control and can end up with the car in a ditch," Bush said. "Steering through a rough patch requires a steady hand on the wheel and your eyes up on the horizon. And that's exactly what we're going to do."

Clear enough. But of course the Anti Bush interpretation is Bush is lost, in denial and don't know what is going on.

And if he over corrects. SEE! Bush is stupid!

[questionmark]

SEE! Bush is stupid!

... or same in both cases...

[Lt_Ripley]

ah good ole Georgie --- at least he's consistent - a day late and a dollar short as usual.

Edited March 15, 2008 by Lt_Ripley

[Caesar]

He has been saying for awile that the economy was in a slowdown for some time ago, he said he didn't think we were in a recession, thats why he wants those foolish tax rebates. we won't know till June July if it is a recession. two quaters/6 months= recession

[grither]

Clear enough. But of course the Anti Bush interpretation is Bush is lost, in denial and don't know what is going on.

And if he over corrects. SEE! Bush is stupid!

Do you post in any thread that's not about Bush or Iraq? Did you join UM just to talk about only Bush/war?

[Siara]

Bush acknowledges weakness in US economy

At the same time he also acknowledged that the ocean is wet and bears sh** in the woods

The Economic Club of New York is an exclusive, wealthy, largely homogenous group of top executives. Speaking before the gathering had Bush somewhat literally preaching to the choir — the 101-year-old group's new chairman is Glen Hubbard, the first head of the White House Council of Economic Advisers for Bush.

I'm sure these people are going to take a big personal hit when the economy collapses. (They've probably already converted their savings into gold and have moved it out of the country.)

"It's important not to overcorrect, because when you overcorrect, you end up in a ditch," Bush said. "It's important to be steady."

The trick is to make sure that the people who don't really count end up in the ditch while you continue cruising down the road in your Ferrari

ugh--- how many days until this bogus creep's term is over?

[AROCES]

Do you post in any thread that's not about Bush or Iraq? Did you join UM just to talk about only Bush/war?

You tired of it, then don't read it.

[AROCES]

The trick is to make sure that the people who don't really count end up in the ditch while you continue cruising down the road in your Ferrari

ugh--- how many days until this bogus creep's term is over?

Class envy, that is what you are about.

You should be in the mountains with some communist rebels

[Siara]

Class envy, that is what you are about.

You should be in the mountains with some communist rebels

Nice guess AROCES. Wrong but, from you, predictable. If you truly love the Conservative Movement you need to take an honest look at what's happening. Take these international headlines, for example. Notice a common thread?

* * * *

U.S. Federal Reserve pumps £100 BILLION into markets

-----------------------------

By Richard Blackden

Last Updated: 12:59pm GMT 13/03/2008

The dollar tumbled to its lowest in 12 years against the Japanese yen and was weaker against a string of currencies as fears for the health of the US economy deepened.

-----------------------------

Bear Stearns bailed out by JP Morgan and NY Fed

------------------------------

PARIS (Reuters) - The U.S. economy lost the title of "world's biggest" to the euro zone this week as the value of the dollar slumped in currency markets.

Taking the gross domestic product of both economies in 2007, the combined GDP of the 15 countries which use the euro overtook that of the United States when the European currency surged to a record high of more than $1.56 per euro.

-----------------------------

Bank of Israel steps in to stop dollar slump

Governor Stanley Fischer makes unlikely move as Bank of Israel intervenes in trading for first time in 10 years in an attempt to stop dollar rates from sliding further

------------------------------

Rising prices and anxiety cause surprise drop in US retail sales

------------------------------

Wanted in stores: Your tax rebate money

-------------------------------

New York Fed manufacturing activity at record low in March

--------------------------------

Fed Steps In To Ward Off "Meltdown"

--------------------------------

Oil hits record near $112 as dollar slumps

--------------------------------

Gas spikes to $5.20 a gallon at one pump

[Siara]

Class envy, that is what you are about.

You should be in the mountains with some communist rebels

Believe it or not, it's possible to be financially comfortable and still care about the poor.

[questionmark]

Class envy, that is what you are about.

You should be in the mountains with some communist rebels

Yeh right... as I said I love this socialism stuff as long as they privatize the gains and socialize the losses. For example this Northern Rock CEO, there was hardly a week he was not in some newspaper b****ing about him having to pay taxes ... now it is the government bailing out his company with other people's taxes....

Edited March 17, 2008 by questionmark

[Never Here]

Stocks down after Bear Stearns deal By MADLEN READ, AP Business Writer

6 minutes ago

NEW YORK - Wall Street fell in temperamental trading Monday as investors grappled with news of JPMorgan Chase & Co. buying the stricken Bear Stearns & Co. in a deal backed by the government. The Dow Jones industrials, down nearly 200 points in the early going, fluctuated into positive territory and then sank again by more than 150 points, while broader indexes were more than 2 percent.

A buyout of Bear Stearns was certainly more appealing than the alternative: letting the investment bank collapse and causing huge losses for anyone linked to it. And some unprecedented moves by the Federal Reserve gave investors a bit of solace on what many predicted would be a day of precipitous losses in the stock market.

Besides supporting the buyout, the Fed lowered the rate it charges to loan directly to banks by a quarter-point on Sunday night — two days before its scheduled meeting Tuesday. The central bank also set up a lending option for firms, including many non-bank financial services firms, to secure short-term loans for a broad range of collateral.

"This removes the risk of further slides for these companies, the risk that a Bear Stearns incident would happen again," said Robert Pavlik, portfolio manager at Oaktree Asset Management.

The Fed appears to be pledging to do everything in its power to keep the credit crisis from destroying the financial industry and the economy. Policy makers at the central bank are expected to reduce the target fed funds rate — the rate banks charge each other for overnight loans — by at least a half-point on Tuesday, and perhaps even a full point.

Still, the market remained extremely volatile. The sale of Bear Stearns — and the fact that JPMorgan valued the fifth-largest Wall Street investment bank at a minuscule $2 a share, or $236 million — stirred fear among investors worldwide about other banks' exposure to the troubled credit markets.

"You're going to have some very weak players pushed out of business," said Joseph V. Battipaglia, chief investment officer at Ryan Beck & Co. He said JPMorgan's buy of Bear Stearns and Bank of America Corp.'s acquisition of mortgage lender Countrywide Financial Corp. are probably not the only rescues the industry will witness during this credit crisis.

The Dow fell 162.66, or 1.36 percent, to 11,788.43, after venturing into positive territory.

Broader indexes also dropped in choppy trading. The Standard & Poor's 500 index fell 29.40, or 2.28 percent, to 1,258.74, while the Nasdaq composite index fell 54.91, or 2.48 percent, to 2,157.58.

Dan Veru, co-chief investment officer at Palisade Capital Management in Fort Lee, N.J., was anticipating a "throw-the-baby-out-with-the-bathwater kind of day," he said. "But the markets have been remarkably resilient. This market has already taken a lot of body blows."

JPMorgan was by far the biggest gainer among the Dow components, rising $3.06, or 8.4 percent, to $40.60. The Fed essentially guaranteed JPMorgan that it would backstop any risk involved in taking over the 85-year-old Bear Stearns, which has 14,000 workers worldwide.

Bear Stearns shares fell 88 percent to $3.60 — still above the buyout price, implying that some shareholders believe the deal terms might change. About one-third of Bear Stearns stock is held by its employees.

The pain for stockholders in Bear Stearns, which succumbed to losing bets on souring mortgages for borrowers with poor credit, will be sizable. JPMorgan is buying Bear, including its midtown Manhattan headquarters, for about 1 percent of the investment bank's worth little more than two weeks ago. Bear Stearns' buyout arrives after a short-term bailout Friday that JPMorgan led and that the Fed backed.

Bond prices rose as stocks fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.34 percent from 3.44 percent late Friday.

The dollar sank to a record low against the euro and hit a 12 1/2 year low against the yen, while gold prices surged to another record high.

Light, sweet crude dropped $3.18 to $107.03 per barrel on the New York Mercantile Exchange, after rising to nearly $112 a barrel in premarket trading.

The market's concern wasn't limited to the Bear sale. DBS Group Holdings Ltd., a large bank based in Singapore, instructed traders via e-mail Monday to disregard an earlier e-mail barring new transactions with Lehman Brothers Holdings Inc., according to Dow Jones Newswires. Earlier Monday, DBS emailed traders and said not to engage in new transactions with Lehman or Bear, according to two people familiar with the situation, Dow Jones reported.

Lehman fell $11.15, or 28.4 percent, to $28.11.

This week, Lehman and other major investment banks are slated to report quarterly results. Investors will likely be focusing on comments from the companies for insights about their financial well-being.

While investors were focused on the financial sector, fresh economic news offered little solace. The Fed said output at the country's factories, mines and utilities fell by 0.5 percent in February, the biggest decline last October. Many analysts had been expecting a slight increase of one-tenth of one percent.

The Commerce Department also said Monday the broadest measure of foreign trade fell slightly in 2007 as stronger growth in U.S. exports helped make up for a spiking foreign oil bill. The deficit in the current account, which covers not only goods and services but also investment flows between the United States and other countries, dropped by 9 percent last year to $738.6 billion.

Declining issues outnumbered advancers by 9 to 1 on the New York Stock Exchange, where volume came to 1.04 billion shares.

The Russell 2000 index of smaller companies fell 14.34, or 2.16 percent, to 648.56.

Overseas, Japan's Nikkei stock average fell 3.71 percent, while Hong Kong's Hang Seng index fell 5.18 percent. Britain's FTSE 100 fell 2.25 percent, Germany's DAX index dropped 3.09 percent, and France's CAC-40 lost 2.32 percent.

[Never Here]

Stunned Bear Stearns investors eye legal claims By Martha Graybow

7 minutes ago

NEW YORK (Reuters) - Angry Bear Stearns Co Inc shareholders have wasted no time in calling their lawyers to pursue possible legal claims over the company's $2-a-share fire sale to JPMorgan Chase & Co.

But while the deal may draw legal challenges from investors over its low price, it is unlikely the pact would be killed by the courts, legal experts say.

That's because the venerable investment bank, which agreed to the emergency deal under pressure from the U.S. Federal Reserve as the credit crunch widens, appears to have few other options short of filing for bankruptcy, legal experts say.

Shareholders "could move to enjoin the deal, but that's a tough hurdle," said Michael Kelly, a partner at law firm McCarter & English in Wilmington, Delaware, who specializes in defending corporations in litigation. "I'm sure the board is going to say this is the best option in our judgment."

Bear Stearns is being sold for just $236 million. The deal's value is more than 90 percent below the company's Friday closing share price of $30.85. But JPMorgan said the price tag would total about $6 billion to account for litigation and severance costs.

Shareholders hit by big losses on their Bear holdings are exploring all legal avenues, say class-action lawyers who specialize in bringing lawsuits against large companies. Possible plaintiffs include individual investors, institutions and company employees. The firm's 14,000 staff own about 30 percent of the company.

"I can't divulge privileged conversations, but shareholders don't contact me when they are happy with the way things are going with their investments," said Ira Press, a lawyer at New York-based class-action firm Kirby McInerney, which has spoken with dismayed Bear investors.

"This is a stock that has gone from $50 to $2 literally overnight, and I also know of people who had assumed that the worst had passed when it closed at $30," he said.

Shareholders might sue Bear and its executives and officers for securities fraud, contending they failed to disclose the company's true financial health, lawyers say.

Jeffrey Nobel, a partner at class-action law firm Schatz Nobel Izard in Hartford, Connecticut, said his firm had been contacted by both institutional and individual investors who bought the stock as recently as last week.

Some of these buyers, he said, took their positions after Bear CEO Alan Schwartz said in a televised interview on Wednesday that the company does not see any pressure on its liquidity and had about $17 billion in excess cash on its balance sheet.

"You have investors who are upset because they feel as though the company was not truthful in reporting its financial condition," Nobel said.

Separate suits may be brought by Bear employees who hold company shares that are now virtually worthless, lawyers said.

Another type of lawsuit would challenge the buyout pact itself, but it may be tough for investors to argue that the company ignored other avenues that are better for shareholders and that there is a better way to proceed, Press said.

"There is a possibility that investors will challenge the fairness of the deal, though I would suspect that at this point Bear Stearns must be in dire straits" and that's why it agreed to the buyout, he said.

Another class-action law firm, Bernstein Litowitz Berger & Grossmann in New York, is studying the situation and is in touch with Bear Stearns investors but has not yet made any decisions on filing a lawsuit, said partner Salvatore Graziano.

"It's a fluid situation," he said. "Clearly, we're very focused on it."

(Editing by Dave Zimmerman, Richard Chang)

[Bella-Angelique]

Hooverville - A crudely built camp put up usually on the edge of a town to house the dispossessed and destitute during the depression of the 1930s.

The New Hooverville's have started to fill in USA.

Video

[AROCES]

Believe it or not, it's possible to be financially comfortable and still care about the poor.

Believe it or not, you are free to give as much as you want, not as much as what YOU think everyone should give.

[AROCES]

Yeh right... as I said I love this socialism stuff as long as they privatize the gains and socialize the losses. For example this Northern Rock CEO, there was hardly a week he was not in some newspaper b****ing about him having to pay taxes ... now it is the government bailing out his company with other people's taxes....

So why do you blame Northen Rock and not the govt for trying to save jobs?

Edited March 17, 2008 by AROCES

[Caesar]

Hooverville - A crudely built camp put up usually on the edge of a town to house the dispossessed and destitute during the depression of the 1930s.

The New Hooverville's have started to fill in USA.

Video

I read alot on the insane and tb asylums during that time, they started to move the poor into those asylums aswell.