President Bush vows action on financial crisis

WASHINGTON -- With stock markets tumbling all over the world, President Bush issued a statement from the Rose Garden today promising aggressive action in concert with other nations to shore up banks and stabilize markets.

"We are a prosperous nation with immense resources and a wide range of tools at our disposal," he said in a nine-minute speech. "We can solve this crisis and we will."

With the credit crunch still threatening to choke world economies, Bush's words had little immediate impact on the Dow Jones, which continued to drop even as he spoke. In the past 10 days, since Congress gave final approval to a $700-billion rescue plan for the nation's financial services sector, Bush has issued six public statements while the market has continued to lose money.

Outlining a series of steps the U.S. government is taking to try to stanch the credit freeze and restore confidence that is battered after historic losses in stock value, Bush acknowledged that this is "an anxious time," but said the American people "can be confident. We know what the problems are, we have the tools to fix them and we're working swiftly to do so."

Calling the American people "innovative and resourceful," Bush also suggested that much of the "startling drop" in the stock market has been driven by fear. "The anxiety is understandable," he said, adding, "Anxiety can feed anxiety and that can make it hard to see all that's being done to solve the problem."

Bush's comments come as leaders of the world's leading industrial economies -- Britain, Canada, France, Germany, Italy, Japan and the United States -- are meeting in Washington to coordinate a concerted strategy.

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The financial crisis: China's role - and responsibilities?

The superpower of the East (ouch - they really don't like the sound of that phrase in Washington!) is so big and so rich that it's just about everywhere nowadays. As the cash-strapped U.S. government's second-largest creditor after Japan, it would seem that China would or should have some cards to play in the completely unpredictable game and drama of the still-unfolding, banking-and-credit-crunch crisis that started in the U.S. and has spread and spread and spread around the world. Now, apparently, it may be ready to play some of them.

The headquarters of China's central bank in Beijing: Will China buy up billions of dollars more of U.S. debt in order to help Washington combat the deepening financial crisis?

» Inter Press Service, in a report published in the Asia Times (Hong Kong), reports: "The Wall Street fire-sale has prompted economic pundits in China and elsewhere to call on Beijing to snap up stakes in United States financial institutions and further China's influence on global financial power." Chen Jie, an economics professor at Shanghai Fudan University, commented: "China cannot easily afford to pass up such an opportunity....We have been anxiously trying to find investment opportunities for our financial capital, but before the crisis, there existed a myriad of visible and invisible barriers for Chinese investment overseas, particularly in the United States."

An investor watched stock prices on an electronic board in Hubei province, China, earlier this week; on Monday, China's stock market fell sharply in response to sliding share prices overseas and fears of a global economic slowdown

However, so far, "China's response to expectations at home and abroad has been unassuming. Although fortified with great liquidity and large reserves, Chinese banks and government investors have preferred to sit on their hands rather than go on a shopping spree of tumbling Wall Street firms....Chinese bank officials have dismissed as groundless reports that China plans to buy up to $200 billion worth of U.S. Treasuries to help Washington combat the deepening financial crisis....Some of Beijing's conservatism stems from the fact that the global credit crisis has walloped the value of the Chinese government's initial batch of investments in U.S. financial institutions such as Morgan Stanley and Blackstone Group."

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