Bush Aims to Pacify Investors, Touts Economy
WASHINGTON -- President Bush shrugged off concerns about stock- market turmoil, saying Wall Street is adjusting to a flood of liquidity and is beginning to "readjust its assessment of risk."</br></br>Mr. Bush, seeking to reassure jittery investors who have watched the market gyrate wildly, said the volatility is natural but the economy is strong and there is enough liquidity to absorb the ups and downs.</br></br>"If markets are given a chance, they will adjust in a way that is a necessary reaction to a flood of liquidity that came into the market over the last couple of years," the president said during a briefing with reporters at the Treasury Department.</br></br>Investors have been spooked as they try to discern whether a shakeout in the market for risky mortgages will lead to credit tightening throughout the economy. The flood of credit to which Mr. Bush was referring fueled a boom on Wall Street, providing loans for homeowners, including some with poor finances, and sparking a wave of corporate takeovers financed with debt. There is concern that a tightening in lending standards could hurt the broader economy.</br></br>Asked whether he was concerned that the shakeout could spread, Mr. Bush said it "all depends on if you're a glass-half-full or a glass- half-empty kind of guy." He said the U.S. economy is strong and that Wall Street will "look at the fundamentals of the economy," such as low unemployment and low inflation. He added that the correction in the housing market appeared to be heading for a "soft landing."