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Archive for Sunday, March 15, 2009

Obama says U.S. economy sound, reassures investors

March 15, 2009

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— President Barack Obama on Saturday downplayed divisions between the U.S. and Europe over how to tackle the world’s financial crisis and said China should have “absolute confidence” that its sizable investments in the United States are safe.

In a conversation focused heavily on the economy, Obama met in the Oval Office with Brazilian President Luiz Inacio Lula da Silva. It was the latest in a series of talks the president has had with his counterparts around the world before a pair of international meetings where the economic crisis will dominate.

Both leaders will attend the Group of 20 countries summit in London on April 2, and the Summit of the Americas in Trinidad in mid-April.

Obama said the notion that the U.S. and Europe are already taking sides, with America pushing for more stimulus spending and European nations favoring tighter regulation of the financial industry, is a “phony debate.”

“I can’t be clearer in saying that there are no sides,” Obama told reporters after the meeting. He said a full range of approaches, including stimulus spending such as his own recently enacted $787 billion package, and financial regulation, are needed to help revive the global economy.

Financial regulation “is front and center” among the issues he wants to deal with, he said.

“In my mind, at least, there is no conflict or contradiction between the positions of the G-20 countries and how we’re going to be moving forward,” Obama said, adding that differences in details were being worked out. “I expect to have a productive meeting.”

Treasury Secretary Timothy Geithner, who had pushed for Europe to match Washington’s $787 billion package of spending and tax cuts, said Saturday that there was “broad consensus globally on the need to act aggressively to restore growth to the global economy. Geithner spoke in London at a preparatory meeting of finance officials from the rich and developing G-20 countries.

At home, Obama also sought to assure China that its investments in the U.S. are safe.

Chinese Premier Wen Jiabao said Friday he was concerned about the safety of the estimated $1 trillion his country has invested in U.S. government debt. China is Washington’s biggest foreign creditor, and Obama’s administration is counting on the Chinese to help pay for the $787 billion economic stimulus package by buying U.S. bonds.

“Of course we are concerned about the safety of our assets. To be honest, I’m a little bit worried,” Wen said. “I would like to call on the United States to honor its words, stay a credible nation and ensure the safety of Chinese assets.”

Wen — and other investors — needn’t worry, Obama said.

“There’s a reason why even in the midst of this economic crisis you’ve seen actual increases in investment flows here into the United States,” Obama said. “I think it’s a recognition that the stability not only of our economic system, but also our political system, is extraordinary.

“I think that not just the Chinese government, but every investor, can have absolute confidence in the soundness of investments in the United States,” he added.

Comments

Flap Doodle 5 years, 9 months ago

"Not long ago, after a string of especially bad days for the Obama administration, a veteran Democratic pol approached me with a pained look on his face and asked, "Do you think they know what they're doing?"..." Read the rest at: http://www.nydailynews.com/opinions/2009/03/15/2009-03-15_more_than_a_bad_day_worries_grow_that_ba.html

Godot 5 years, 9 months ago

Wow! A miracle happened! In just two week's time, Obama has gone from describing the state of the US economy as the worst catastrophe in over 100 years, a disaster so terrible that we might never recover, to assuring the world the economy is "fundamentally sound."

Didn't he heap ridicule on McCain and Bush when they said the same thing back last fall? And that was before the economy had lost 2,000,000 jobs.

The Chinese have Obama running scared.

staff04 5 years, 9 months ago

I think Barry screwed this one up. Just like McCain did.

The economy wasn't sound when McCain said it, and it isn't sound now. The only difference I see is that at least there is a plan in place that has been implemented, but that's the only reason I see to be less than pessimistic.

Godot 5 years, 9 months ago

A plan? A Plan?!? Geithner does not have a plan. He cannot figure out what to do about those toxic assets. Poor wittle guy is scared. Just like Obama.

Godot 5 years, 9 months ago

The serious question is, what will Obama do if the Chinese do not relent on their demand for a guarantee? What can provide a guarantee that the US Treasury cannot? We could be faced with having to provide collateral to the Chinese for their treasuries. Question is, what do we have that they want?

Flap Doodle 5 years, 9 months ago

"...Obama is trying to make it better for everyone..." I LOLed so hard I hurt an ab muscle.

danemary 5 years, 9 months ago

It is difficult to be confident in our economy when most Americans have very little confidence in O bama. After all his wife did say she hated America, and their pastor even went so far as saying he wanted God to damn us!

Flap Doodle 5 years, 9 months ago

By the middle of the week, Axelrod will have spun the dial of "Crisis of the Moment" again & the O'dude will be off in a new direction.

Godot 5 years, 9 months ago

Maybe we lack confidence in Obama because he continually lies:

Wen — and other investors — needn’t worry, Obama said.

“There’s a reason why even in the midst of this economic crisis you’ve seen actual increases in investment flows here into the United States,” Obama said. “I think it’s a recognition that the stability not only of our economic system, but also our political system, is extraordinary."

Really? Why would Obama say that when his own Treasury dept was preparing a report that says this:

"March 16, 2009 TG-57

Treasury International Capital (TIC) Data for January

Washington —The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for January 2009. The next release, which will report on data for February 2009, is scheduled for April 15, 2009.

Net foreign purchases of long-term securities were negative $43.0 billion.

Net foreign purchases of long-term U.S. securities were negative $18.8 billion. Of this, net purchases by private foreign investors were negative $10.2 billion, and net purchases by foreign official institutions were negative $8.5 billion. U.S. residents purchased a net $24.2 billion of long-term foreign securities. Net foreign acquisition of long-term securities, taking into account adjustments, is estimated to have been negative $60.9 billion.

Foreign holdings of dollar-denominated short-term U.S. securities, including Treasury bills, and other custody liabilities increased $30.9 billion. Foreign holdings of Treasury bills decreased $15.4 billion.

Banks’ own net dollar-denominated liabilities to foreign residents decreased $118.9 billion.

Monthly net TIC flows were negative $148.9 billion. Of this, net foreign private flows were negative $158.1 billion, and net foreign official flows were $9.2 billion. .

Complete data is available on the Treasury website at www.treas.gov/tic."

Foreigners' holding of US assets fell a net $148.9 Billion in January. For those of you who believe in Obama-math, allow me to translate: That is a negative $148.9 Billion. Negative, not positive.

Obama owes the world an apology for his feeble attempt at pulling a con job on the worlds' investors. They are smarter than that. He needs to realize that he is president now, not just a street organizer. Words really do have meaning.

jafs 5 years, 9 months ago

Ok, this is certainly a tough thing to defend Obama for, and I won't try to do that.

But it seems obvious that he has to try to reassure the Chinese so they don't change their support of our system, given that they own so much of our debt.

The whole question of whether our economy is fundamentally sound or not seems to have turned into a political question. When a politician has something to gain or lose by the answer, it shifts accordingly.

This is disturbing to me, regardless of who's doing it.

Finally, though, Obama's only been in office for about 2 months - don't you think it will take a little longer to see whether his policies will help or not? Let's give him at least 6 months or so before rushing to judgment. After all, the mess we're in took 8-16 years to create, as far as I can see.

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