As Wall Street reels, Bush welcomes money from abroad
Headshot of Barrie McKenna
December 21, 2007
WASHINGTON -- George W. Bush has opened the door wide for foreign companies, including Chinese-owned ones, to help rescue U.S. banks from the subprime mortgage mess.
"I'm fine with capital coming in from overseas to help bolster financial institutions," the U.S. President said yesterday, a day after a Chinese government agency agreed to invest $5-billion (U.S.) in troubled broker Morgan Stanley.
"I think the world that is open for investment and trade is a world that will lead to overall prosperity."
Mr. Bush added that he's looking at "all options" to keep the United States from slipping into a recession.
The world's largest economy expanded at an impressive 4.9 per cent annualized clip in the third quarter, according to a final U.S. Commerce Department estimate. But economists said a severe housing slump, a continuing freeze-up in parts of the credit market and growing consumer angst is already weighing heavily on the economy.
Most economists aren't forecasting an outright recession - defined as two consecutives quarters of economic contraction - for the United States.
During what is likely his last news conference of 2007, Mr. Bush similarly insisted the economy is fundamentally healthy, in spite of the housing downturn and the spike in energy costs.
"My view of the economy is that the fundamentals are strong," Mr. Bush told reporters at the White House. "Like many Americans, I'm concerned about the fact that Americans see their costs going up. I know Americans are concerned about whether or not their neighbour may stay in their house."
Mr. Bush's apparent invitation to foreign investors isn't a complete surprise. Recent investments by sovereign wealth funds in Citigroup and Bear Stearns have been greeted with surprisingly little fuss in Washington.
That wasn't the case in 2005, when state-run China National Offshore Oil Corp. abandoned a takeover of California oil firm Unocal amid protestations from key members of Congress and the administration.
There was also a political backlash in 2006 when Dubai Port World, a United Arab Emirates-owned company, acquired several key U.S. seaports.'