Given the past divergences between the forecasts of president George W. Bush and the actual development of affairs investors should dive for cover. Bush today said he expects a that markets would work their way through safely and achieve a soft landing, the International Herald Tribune reports. Wall Street stocks turned around on his remarks published just before the markets' close and rallied to end more than 1% higher.
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Bush struck a reassuring tone Wednesday about recent turbulence on Wall Street, saying he believes the markets will work their way through safely and achieve a "soft landing."
Bush, in his most extensive remarks on a gyrating stock market, expressed confidence that investors would eventually calm down. The president said he expects investors to smoothly reassess their risk and begin to focus more on the economy's fundamentals, which he said are solid and sound.
Investors are worried about a worsening housing slump and possibly a widening credit crunch - an uneasiness of recent weeks that has permeated the financial system and the national economy.
"The underpinnings of our economy are strong," Bush told a small group of reporters Wednesday. He said such conditions should help the markets make their way through the current problems.
"So the conditions for a - you know - for the marketplace working through these issues are good, and that's how I look at it, " Bush said.
As signs of housing turmoil mount, Bush seeks to calm fears. Bush noted that the economy is growing modestly and generating jobs, despite the ill effects of the sour housing market.
After nearly stalling in the first three months of this year, the economy rebounded in the April-to-June quarter, growing at a solid 3.4 percent pace, the best in more than a year. The nation's unemployment rate edged up to 4.6 percent in July yet remains low by historical standards. Inflation - outside a recent burst in energy and food prices - has shown signs of improving.
However, stocks have been swinging wildly.
The president indicated he was not overly worried. He said the market has gone through periods of ups and downs before. "It's the nature of the markets," he said.
On Wall Street, the Dow rebounded to finish up more than 150 points Wednesday.
Although Bush insisted his economic policies have helped the economy grow and his tax cut let workers keep more of their own money, the president has been coping with weak public-approval ratings for his economic stewardship. Only 37 percent approve of his performance, close to a record low, a recent AP-Ipsos poll indicated.
"I do understand there is disquiet out there," Bush said.
On one hand, he blamed the war. "I happen to believe the war has clouded a lot of peoples' sense of optimism," Bush said. On the other hand, he noted that consumer confidence, as measured by the Conference Board, soared to a six-year high. He said there have been conflicting measures about Americans' moods and their feelings about the economy.
Looking ahead to the Democratic-controlled Congress' return in September, Bush made his case anew for keeping taxes low and restraining spending. He also urged policymakers to avoid protectionist trade measures.
Lawmakers and some Americans are losing patience with China, which they blame for the loss of millions of factory jobs, unfair trade competition and a flood of harmful food, toys and other products flowing into the United States. The U.S. trade deficit with China last year swelled to $233 billion (€168.9 billion), the highest with any single country.
The president acknowledged China "is on a lot of Americans' minds" these days. He said the administration is working to protect Americans from unsafe goods and deal with trade problems. Bush said one of his big concerns is the rampant piracy of U.S. movies, computer software and other intellectual property rights. The administration is also working to curb that and wants to make sure "people don't steal our ideas," he said.
It is notable that the president does not see any problems with the lack of fiscal discipline that has roughly doubled US debt during his reign.
But maybe he has watched developments in Zimbabwe, where dictator Robert Mugabe recently was happy to see his budgetary problems solved by printing more money. Ahem, it did not work.