Bush Says White House In Control Of Financial Rout

By Cernig

It's becoming a competition between Bush and Cheney to see which can appear more disconnected from reality these days. Cheney is in Iraq today, and more on that later, but Bush saying that the administration was "on top of the situation" in respect to the financial meltdown occasioned by the Bear Stearns firesale simply takes the biscuit.

The banking giant sold at a paltry $2 per share, a 93 per cent discount on the Friday closing price, despite the Fed taking a $30 billion share of its bailout.

Rather than being on top of the situation, the administration is seen by analysts as swan-like...trying to appear calm on the surface while everything under the surface is flapping about wildly. They're trying to head off a bank run.

Dean Baker, the co-director of the Center for Economic and Policy Research...said he sensed a whiff of panic at the Fed and in the Treasury Department.

"The main thing is that they [Fed and Treasury] are really really scared. Telling us that everything is great is an insult to intelligence. They should own up to it and talk seriously to people," Baker said.

And as a consequence there's a serious flight away from the dollar into other currencies and commodities, with gold and oil both trading at record values.

But Bush says he's on top of the situation - so he's taking ownership of it, win or fail. Remember that when the inevitable 'no one could have anticipated" excuses get trotted out later.