"financial crisis will be resolved-BUSH"

President George W Bush insisted on Friday the raging global financial firestorm would be put out as panic-stricken markets suffered more staggering losses.

As stock exchanges from Tokyo to London to New York were sucked deeper into the turmoil, Bush blamed "uncertainty and fear" for much of the global financial meltdown but promised the crisis would be controlled.

"Anxiety can feed anxiety and that can make it hard to see all that is being done" to address the problem, he said in a White House statement. "We can solve this crisis, and we will," he promised.

Bush spoke ahead of a Washington meeting of finance ministers and central bank chiefs from the Group of Seven richest nations dominated by the crisis.

The chaos deepened as he spoke. Wall Street plunged in the first hour of trading, recovered its losses before again going into negative territory.

London's FTSE 100 index skirted close to a 10-percent loss before a slight pullback. The Paris CAC 40 dived 10.57 percent and there were similar losses in Frankfurt.

"We are drowning in a sea of red numbers," said Barclays Wealth analyst Henk Potts. "The reality is that most investors have been spooked by the sheer pressure that the credit crunch is putting on the global economy." Japan's Nikkei-225 index closed down 9.62 percent, Hong Kong lost 7.2 percent and Singapore 7.34. Tokyo briefly halted some trading in futures and options as the Nikkei saw its biggest fall since the crash of October 1987. A fresh injection of 45.5 billion dollars into Japanese money markets failed to stop the collapse as the crisis claimed its first Japanese victim, with Yamato Life Insurance filing for bankruptcy protection. Nowhere was immune from the rout. South America's largest stock market in Sao Paulo was suspended after the market slid more than 10 percent. Trading in Moscow was also halted. Shares around the world have crashed over the past two weeks since the collapse of Lehman Brothers in the United States put the focus on banks' disastrous lending on the US mortgage market. Central banks have since spent hundreds of billions of dollars trying to keep credit markets moving. The United States and Britain have spent massively to prop up their banking systems and Iceland is fighting national bankruptcy. Justin Urquhart-Stewart, marketing director at London-based Seven Investment Management, said the world now faces a "perfect storm" with a banking system in crisis and a dramatically slowing global economy. With oil prices falling below 80 dollars a barrel amid gloomy predictions for the world economy, pressure grew for more coordinated international action.

$Boopathi$, October 11, 2008