Recordpub.com - Bush, allies try to calm investors Pledge to work together to solve financial crisis

Associated Press

WASHINGTON -- President Bush and the world's financial leaders staged repeated displays of unity Saturday to combat an unfolding credit crisis, hoping to calm investors whose panic has spread despite bold and accelerating government action.

While there were no concrete offers of new moves made on Saturday, Bush pledged anew that his administration was doing everything possible to halt the biggest market disruptions since the Great Depression and the finance ministers spoke in unusually somber terms about the need for action.

Bush, who had started the day shortly after daybreak with a Rose Garden appearance with finance ministers from the world's richest countries, made an unexpected late day visit to the headquarters of the 185-nation International Monetary Fund. With Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, he participated in an evening discussion with the Group of 20, which includes rich countries and major developing nations such as China, Brazil and India.

Brazilian Finance Minister Guido Mantega said that the president had stressed the seriousness of the current situation and told the finance ministers that he was doing all he could to involve other countries in efforts to resolve the crisis.

In response, the G-20 countries issued a joint statement in which the finance officials pledged to work together "to overcome the financial turmoil and to deepen cooperation to improve the regulation, supervision and the overall functioning of the world's financial markets."

The financial turmoil dominated discussions at the annual meetings of the IMF and World Bank over the weekend. The IMF strongly endorsed a five-point plan put together by the G-7 nations the day before that pledged to use all means possible to prevent major financial institutions from failing and to keep pumping money into the banking system to unfreeze lending and get credit -- the lifeblood of the economy -- flowing again.

"The depth and systemic nature of the crisis call for exceptional vigilance, coordination and readiness to take bold action," the IMF said in its joint statement. That statement, in an unusual move, repeated verbatim all of the commitments made in the G-7 statement that had been released on Friday.

"There is a resolve that this crisis will be resolved, that no tools will be spared to address this issue," Egypt's finance minister, Youssef Boutros Ghali, chairman of the IMF's policy panel, told a news conference late Saturday.

In his Rose Garden appearance, Bush made a plea for nations work together to address the crisis, avoiding the go-it-alone protectionist trade strategies that worsened conditions during the Great Depression.

"In an interconnected world, no nation will gain by driving down the fortunes of another. We are in this together. We will come through it together," Bush said. "There have been moments of crisis in the past when powerful nations turned their energies against each other or sought to wall themselves off from the world. This time is different."

White House spokesman Tony Fratto said Bush's commitment to collaborative action was repeated and agreed to by every official and minister who took part in a private White House meeting before the statement. Participating in that session with the president were top officials from the Group of Seven powers -- the United States, Japan, Germany, France, Britain, Italy and Canada -- as well as from the European Union, World Bank and International Monetary Fund.

Bush did not mention any specific action that prompted his call. But Ireland recently moved to guarantee all bank deposits, triggering similar actions in Germany and other countries concerned that nervous depositors would move their bank accounts to Ireland.

In his White House remarks, the president barely noted a significant new step from his administration -- partial nationalization of some banks. After days of speculation this move was coming, Paulson announced late Friday night that the government would buy part ownership in an array of American banks.

President Hoover tried something like that in 1932 during the Great Depression. No detail was provided about how the Bush administration's approach would work, only that it was similar to Britain's move to pour cash into its troubled banks in exchange for a stake in them. The U.S. government would use an unspecified portion of the $700 billion approved by Congress a week ago to purchase stocks in a wide variety of banks and other financial institutions.

The rescue program originally was sold to Congress and the public as a plan to buy mortgage-related loans from financial institutions. The goal was to remove troubled assets from those institutions' books and inspire them to restart more normal lending operations.

Congress passed the massive and hard-fought legislation, and Bush signed it. The government raised the amount of bank deposits it insured. Billions of dollars of reserves have gone into banking systems in the U.S. and other countries. Yet credit, the economy's lifeblood, has remained virtually frozen.

This paralysis in the credit markets has translated into intense turmoil in the stock markets. The Dow Jones industrial average just completed its worst week in history, plummeting more than 18 percent. Over the past year, people in the U.S. have watched $8.4 trillion drain from investment accounts and retirement savings.

So the administration decided to use the bailout bill to pump equity directly into the banks -- an idea never mentioned during the congressional debate. The administration says it is authorized by an obscure provision of the 400-page legislation.

Officials are not saying how long it will take to get this program under way -- just as is the case with the even more complicated effort to buy mortgage-backed securities.

Bush seemed to acknowledge that the lag is feeding anxiety on Wall Street. "These extraordinary efforts are being implemented as quickly and as effectively as possible," Bush said. "The benefits will not be realized overnight."

The White House session with Bush followed a three-hour meeting Friday night of G-7 finance ministers. The president largely echoed their terse statement, saying the nations have pledged to "do what it takes to resolve this crisis."

Among their promises are preventing the failure of major banks, unfreezing credit markets, bolstering deposit insurance programs, getting the battered mortgage financing system to operate more normally and working with poorer but fast-growing nations that also are feeling the pinch.

Officials in Europe prepared for a meeting Sunday of the leaders of the 15 nations using the euro currency. German Chancellor Angela Merkel and French President Nicolas Sarkozy said Saturday they opposed to the creation of a common financial rescue fund for Europe.

For Bush, it was the 22nd day in the past 27 he had spoken about the financial crisis, since evidence first arose that the year-old subprime mortgage mess was evolving into a broader and more calamitous meltdown.

Bush also addressed the crisis in his weekly radio address, as did Democratic vice presidential candidate Joe Biden in delivering his party's response. Democratic presidential candidate Barack Obama, in a series of Philadelphia rallies, also focused on words of calm.

"I know these are difficult times. I know folks are worried," he said. "But I also know that now is not the time for fear or panic. Now is the time for resolve and steady leadership. Because I know we can steer ourselves out of this crisis."

2.	Posted by caring citizen October 12, 2008
	why does Bush care! he is out of office in a few months, and back to to oil company's where he has made billions, gauging the American public, and blaming it on everything but where the blame is due. When his dad was president, gas prices went up, not to the point that they have now. Washington needs to be controlled better. I know a secret service person that was in charge of Clinton and he told of many wasteful dollars spent when he was president. Example, Clinton tried to show he was a physical fit person by runiing the streets of washington with his secret service guys. When it was brought to peoples attention that this was not safe the tax payers paid to have a track built at the white house which he used maybe 2 times. This goes on and on. Why do we let it. Bush, should be fining the oil companies, but by now for all they have made it would be like wiping a feather across their wrists. Not even a slap. I think that we should be getting some of the oil from Iraq for all the money that we have paid for that war and all the young kids killed and maimed. What are we getting out of it? Just alot of fatherless kids. When and if we leave the middle east , there will be many to take suddams place. Using the oil profits to build more palaces and terrorizing the people they felt helped the American's, and all the others in the war against terrorism. What happened to us looking for Obana. Please excuse my spelling. Its as if our priorities have changed. Bush and the other countries give amunity to boarding countries for harboring the terrorists that fled. They don't want to upset them. It's bull crap. Things will never be at peace over there in the Middle East. We think different then they do, and we can't keep trying to force our ways on them. What they know is all they have ever known. It would be like them coming over here and doing the same to us. We only know what we know and we think that is the only right way to think and do things. We pay off other countries by giving them free aid to get a base in their countires and have "Paid for allies" if you have to buy friends are they truly your friends. Come on the US Govenment, when are you ever going to learn. I think some of these third world countires are just laughing at us. Where are they getting their weapona and technology from. Think about it.We are paying and allowing arms dealers to maim and kill our own. They have their set of war rules and we have ours. Unfortuneatley all goes with them. They go hid ein their cementaries and houses of worship and we are not allowed to touch them. Can you see the irony in this. GO to this buy out, and to save the banks. Let them fail, if it will effect the wealthy. They have been protected for too long. Why isn't this money going toward the people who are losing their houses, because these banks were greedy and took chances to lend money to some they should've have. Save the people and let them have a place to live, food to eat, a warm place in the winter and a cool place in the summer. If you would use the money to help those and teach them ways to manyage there money, help them from their companies closing and losing their jobs. This would help out economy so much. Instead you are greddy give the jobs to the lowest paying countires and now you see its coming back to haunt us. All the lead in products from china and the tainted babay food. I'm sure there will be more to come. Wake up Americans, buying cheap and importing only hurts our country in the long run. You only get what you pay for. I know we need to watch out pennies, but for what cost? Who is watching to make sure these products our safe. There is just to much polictical cover up aand corruption going on. Lets start here in Portage County and stop the unecessary spending and corruption. The old bus garage was ok for others now its not ok now because they are finding poisons in there. I wonder how long the commisioners and other knew of that. No wonder they didn't want some people moving in there and others it was ok.Now the economy is so bad and you want us tax payers again to bail the economy out. YOU HAVE NO PROBLEMS SPENDING OUR MONEY. Remember voters, go out and vote! Don't just vote rebublican because your rebublican or visa versa. Know what the candidtates are doing. VOTE NO to reellect Smeiles, he let the corruption go on at Woodlands when he was warned and told about what was going on. Linda Faulkner, people questioned her. See what is being investigated now. All these politicaians have been double dipping, like Jones and he gets away with such a light sentence. If you or I would have done have of what these people have done we would be put away for years not months and have to pay restition. Jones have the balls to ask to be placed in a prison close to his family. Come on, get real. WHO is watching what the politicians are really spending and do we really need it. There are so many vacant buildings in portage county that could be used instead of people like the commissioners wanting to spend millions to build a new building for their offices. Say no to that . Use the money to help the homeless and, feed the hungry. Get real, vote these losers and users out.

1.	Posted by an immature person October 12, 2008
	I find the timing of this crisis very convenient for Wall Street. Get it done quickly before the election so you don't have to get a lame duck congress to act. And what squirrel could be blinder than George W. Bush, yet America trusts him to find an acorn? What prophet could be falser, yet the world bothers to listen to him? We are counseled by countless politicians that now is not the time for fear and panic, yet their own actions are driven by the extremes of both. We are in serious trouble. Congress and President Bush have just transferred their duties to an unelected official, despite Supreme Court rulings that struck down prior attempts to do the same. One such ruling related to portions of the Gramm-Rudman-Hollings (GRH) act. Yet there has been no question of the constitutionality of the transfer of duties and powers from Congress, who serves at the will of the people, to the Secretary of the Treasury, who serves at the will of the President. The difference between GRH and the current situation is that GRH was intended to cut spending while the bailout, perhaps better called the "Beast Enabling Act (BEA)", is intended to facilitate spending. It is hard to imagine who will raise the Constitutional issues involved and if it is possible to obtain relief before it becomes fait accompli. It is clear that Congress and the President passed the BEA to hasten the process of doling out $700 billion. Yet the Supreme Court has ruled time and again that the Constitution does not allow that. The following is from INS v. CHADHA, 462 U.S. 919 (1983) which is cited in BOWSHER v. SYNAR, 478 U.S. 714 (1986). The choices we discern as having been made in the Constitutional Convention impose burdens on governmental processes that often seem clumsy, inefficient, even unworkable, but those hard choices were consciously made by men who had lived under a form of government that permitted arbitrary governmental acts to go unchecked. There is no support in the Constitution or decisions of this Court (Supreme Court of the United States) for the proposition that the cumbersomeness and delays often encountered in complying with explicit constitutional standards may be avoided, either by the Congress or by the President. (Citation deleted) With all the obvious flaws of delay, untidiness, and potential for abuse, we have not yet found a better way to preserve freedom than by making the exercise of power subject to the carefully crafted restraints spelled out in the Constitution.