Bail-out ‘Vital’

24 09 2008

Americans must support a massive bail-out of financial markets to ease a “serious financial crisis”, US President George W Bush has said.

The entire economy was in danger, he said in a live TV speech, and failure to act now would cost more later.

He has invited presidential rivals John McCain and Barack Obama to the White House on Thursday to discuss the $700bn (£378bn) rescue package.

The rivals have disagreed on delaying a TV debate over the economic turmoil.

Mr McCain says he is suspending his campaign to help with the crisis, but Mr Obama says voters now need to hear from the candidates more than ever.





Bail-out ‘Vital’

24 09 2008

Americans must support a massive bail-out of financial markets to ease a “serious financial crisis”, US President George W Bush has said.

The entire economy was in danger, he said in a live TV speech, and failure to act now would cost more later.

He has invited presidential rivals John McCain and Barack Obama to the White House on Thursday to discuss the $700bn (£378bn) rescue package.

The rivals have disagreed on delaying a TV debate over the economic turmoil.

Mr McCain says he is suspending his campaign to help with the crisis, but Mr Obama says voters now need to hear from the candidates more than ever.





Bush Wants Ok to $700bil Spending

21 09 2008

President Bush asked Congress on Saturday for the authority to spend as much as $700 billion to purchase troubled mortgage assets and contain the financial crisis.

The legislative proposal – the centerpiece of what would be the most sweeping economic intervention by the government since the Great Depression – was sent by the White House overnight to lawmakers. (Read the text here.)

The plan matches the scope of the problem, Bush said.

“It is a big package because it’s a big problem,” Bush told reporters at a news conference. “The risk of doing nothing far outweighs the risk of the package.”

Treasury Secretary Henry Paulson, lawmakers and their aides are expected to work through the weekend in an effort to craft a bill swiftly. Democratic leaders on Capitol Hill said they expect the bill to go before a vote within days.

Paulson, Federal Reserve Chairman Ben Bernanke and other officials have said in recent days that the lack of easy credit between banks and other financial institutions threatens to inflict serious damage on the economy if not addressed immediately.

“This program is intended to fundamentally and comprehensively address the root cause of our financial system’s stresses,” according to a Treasury statement released Saturday. “As illiquid mortgage assets block the system, the clogging of our financial markets has the potential to significantly damage our financial system and our economy, undermining job creation and income growth.”





Bush Hails Financial Rescue Plan

20 09 2008

The US is set to take “unprecedented measures” to tackle the crisis gripping US financial markets, President George W Bush has said.

But he warned the moves, which include spending of billions of dollars to buy up bad debts, would risk “a significant amount” of taxpayers’ money.

Legislation for the plan will be pushed through as soon as possible, Treasury Secretary Henry Paulson said.

The US took action after a week of turmoil on global money markets.

Stock markets around the world have endured a roller-coaster week as traders and investors fretted about the fall-out from the current credit crisis:

  • Central banks around the world pumping billions of dollars of extra funding into money markets on Thursday and Friday to ease the liquidity crisis
  • The US announcing further measures to shore up the markets, including a ban on short-selling and guarantees to temporarily insure money market deposits
  • Stock markets around the world rallying after a dire week on news of the US rescue plans – with the UK’s FTSE 100 closing with its biggest one-day gain
  • Stock markets in Russia temporarily suspended again on Friday at the end of a week of wild swings and stop-go trading
  • Banking group Morgan Stanley reportedly looking for a partner amid concerns about its future

Recovery plans

A “bold” move was needed to restore the financial system’s health, Mr Paulson insisted.

He added the Bush administration was stepping in with a plan to remove so-called “toxic debts” from US banks’ balance sheets.

While he gave few details, he said federal lawmakers would meet over the weekend to thrash out legislation for the the programme which must be “large enough to have maximum impact”.

In the meantime, he said that the government would be stepping up action to increase the availability of capital for new home loans.

Once this difficult period was over, he said, the government’s next task would be to overhaul bank regulations.

President Bush said swift, politically bipartisan action was needed to keep the US economy from grinding to a halt as problems sparked by the credit crisis had begun to spread through the entire financial system – leaving jobs, pensions and companies under threat.

“These are risks the US cannot afford to take. We must act now to protect economic health from serious risk,” he added.

The US is facing “unprecedented challenges and we’re responding with unprecedented action”, he said.

Rescue moves

Earlier in the day, the government announced plans to guarantee US money market funds – mutual funds that typically invest in low-risk credit such as government bonds and are often used by pension funds – up to a value of $50bn, in a move to further restore confidence.

Meanwhile, the Securities and Exchange Commission temporarily banned “short-selling” in the stocks of 799 companies. Short-selling is a form of trading which effectively bets that the value of a company’s shares will fall.

Reaction to the announcements was swift on money markets across the world, with Wall Street closing in positive territory while the London market ended the session with its biggest one day gain.

“The Treasury and the Fed have finally realised the depth and systemic nature of the crisis,” said John Ryding, an economist at RDQ Economics

“We believe that these actions will constitute the wider firebreak that will contain the crisis.”

Criticism

However, the proposals did draw criticism from Republican presidential nominee John McCain.

“The Federal Reserve should get back to its core business of responsibly managing our money supply and inflation,” he told reporters.

Meanwhile, Democratic rival Barack Obama gave his backing to plans to give the Treasury department “broad authority” to deal with the crisis.

According to President Bush action will restore confidence to the US system, and “confidence is essential to the smooth operation of our economy”.

Mounting fears that the credit crisis is beginning to spread out through the financial system have rocked shares and companies recently.

Investment giant Lehman Brothers collapsed this week, rival Merrill Lynch was bought out by Bank of America, and the US government has bailed out insurer AIG with an $85bn rescue package and state-backed mortgage lenders Fannie Mae and Freddie Mac.





Gustav Keeps White House Away

1 09 2008

Faced with the prospect of a monster storm hitting the U.S. Gulf Coast this week, President George W. Bush and Vice President Dick Cheney are not attending the Republican National Convention, the White House has announced.

The two men will not travel to St. Paul, Minn., today for the start of the four-day convention to anoint Republican presidential candidate John McCain because that’s when Hurricane Gustav is expected to strike Louisiana and other Gulf Coast states, the White House said Sunday.

Bush called state leaders in Louisiana, Mississippi, Alabama and Texas in the early morning from the White House, spokesman Scott Stanzel said. Those states are in the path of the hurricane, which swept through the Caribbean last week, killing about 80 people.

Gustav is a Category 3 hurricane on the Saffir-Simpson Scale. Forecasters believe its centre will make landfall just west of New Orleans on Monday. By then, it could be a Category 4 or even reach the top of the five-category scale.

There are fears the storm surge could break through the same levees that failed three years ago and swamp the city, repeating the disastrous conditions left by Hurricane Katrina.

McCain told Fox News on Sunday there might be changes to the tone of the four-day party gathering, which gets underway Monday, because of the approaching storm.

“It just wouldn’t be appropriate to have a festive occasion while a near-tragedy or a terrible challenge is presented in the form of a natural disaster, so we’re monitoring it from day to day and I’m saying a few prayers, too,” he said.

McCain and his running mate, Sarah Palin, were travelling to Mississippi on Sunday to observe storm preparations.





Endangered Species Act Overhaul?

12 08 2008

The Bush Administration wants federal agencies to decide for themselves whether highways, dams, mines and other construction projects might harm endangered animals and plants.

New regulations, which don’t require the approval of Congress, would reduce the mandatory, independent reviews government scientists have been performing for 35 years, according to a draft first obtained by The Associated Press.

Interior Secretary Dirk Kempthorne said late Monday the changes were needed to ensure that the Endangered Species Act would not be used as a “back door” to regulate the gases blamed for global warming. In May, the polar bear became the first species declared as threatened because of climate change. Warming temperatures are expected to melt the sea ice the bear depends on for survival.

The draft rules would bar federal agencies from assessing the emissions from projects that contribute to global warming and its effect on species and habitats.





Bush Attempts End To Offshore Oil Drilling

20 06 2008

President Bush, reversing a longstanding position, will call on Congress on Wednesday to end a federal ban on offshore oil drilling, according to White House officials who say Mr. Bush now wants to work with states to determine where drilling should occur.








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