Bush says he’s worried about financial crisis

updated 5:23 p.m. ET Sept. 18, 2008

WASHINGTON - Eager to show that he feels people’s pain, President Bush told the country Thursday his administration is working feverishly to calm turmoil in the financial markets. With reports swirling of possibly imminent new government action, the president met with his treasury secretary and the head of the Federal Reserve.

Nothing was announced immediately after the 40-minute meeting at the White House, which included Securities and Exchange Commission Chairman Christopher Cox, along with Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke.

White House spokesman Tony Fratto would not comment on whether any decisions were made at the session, or whether any announcements would be forthcoming later Thursday. News reports said Paulson was considering having the government create an entity to take over banks’ bad debt.

“The president and his senior economic advisers had a very good discussion about the serious conditions in the financial markets,” Fratto said.

Bush was supposed to spend the day in Alabama and Florida raising money for Republicans and talking energy policy. He canceled his trip and sent Vice President Dick Cheney to sub for him at the fundraisers to focus on the worst financial meltdown since the Great Depression.

“The American people are concerned about the situation in our financial markets and our economy,” Bush said. “And I share their concerns.”

The tumult in financial markets and the disappearance of corporate giants have shaken people’s faith in the economy. On Wall Street, the fear is that more significant financial companies will fall, causing a spillover effect within the United States and on world markets.

According to preliminary calculations, the Dow closed up 410.03, or 3.86 percent, to 11,019.69, surging 560 points from its low of the day, 10,459.44. It was the Dow’s biggest percentage point gain since October 2002 but still leaves the index down about 400 points for the week after routs Monday and Wednesday.

Broader stock indicators also jumped. The Standard & Poor’s 500 index rose 50.12, or 4.33 percent, to 1,206.51, and the Nasdaq composite index advanced 100.25, or 4.78 percent, to 2,199.10.

In brief formal remarks outside the Oval Office, Bush sought to show that the administration is moving swiftly and aggressively by taking “extraordinary measures.”

Earlier this month, the administration took over mortgage giants Fannie Mae and Freddie Mac. At the start of this week, the Federal Reserve rescued American International Group Inc., an insurance giant, from bankruptcy by granting an emergency $85 billion loan that gives the government an 80 percent stake in the company.

On Wednesday, the Securities and Exchange Commission tightened rules on short selling, the practice of betting that a stock will fall.

And Thursday, the Federal Reserve pumped $55 billion in temporary reserves into the markets after coordinated action with the central banks of other nations.

The White House says the moves will help protect the broader economy and therefore everyday life. But the president used language that resonates more with market analysts than the public.

He promised that the “markets are adjusting” — a term suggesting the White House hopes that a temporary correction is under way, not a sustained slide.

“The American people can be sure we will continue to act to strengthen and stabilize our financial markets and improve investor confidence,” the president said.

MORE FROM STOCKS & ECONOMY

Stocks & economy Section Front

Stocks end day higher as dollar continues slide NYT: Under attack, Bernanke studies politics   Dollar stumbles to 15-month low Of bats and billions: Following stimulus funds As stimulus funds trickle down, debate heats up Geithner encouraged by policies in Asia World Bank: Job losses threaten U.S. economy Oil rises as China's economy rebounds FDIC: Big banks still aren't lending enough Job openings near record lows, and may linger Stocks & economy Section Front   Add Stocks & economy headlines to your news reader: