Bush backs Fed in 'challenging times' for market

Washington: US President George W. Bush on Monday assured that the US was "on top of the situation" after huddling with his top economic advisers on the financial crisis that is roiling global markets.

The US central bank, in a rare Sunday action to keep cash flowing in the financial system, lowered a key rate on direct loans to some financial institutions and created a special lending programme for securities firms caught in a cash squeeze stemming from the subprime, or high-risk, mortgage crisis.

"We're in challenging times," Bush said, voicing support for the Federal Reserve's rapid moves over the weekend to avert a fin-ancial meltdown. "The Federal Reserve has moved quickly to bring order to the financial markets," he said.

The actions were announced late Sunday as Asian financial markets were set to open and after a tumultuous week of trading in a mounting crisis of confidence over a global credit crunch that is causing tens of billions of dollars in losses.

Bush said that Treasury Secretary Henry Paulson had briefed him on the Fed moves, which had been taken in close cooperation with the Treasury. "Secretary Paulson ... is supportive of that action, as am I," he said.

He thanked Paulson for "working over the weekend" to deal with the crisis brought to a tipping point last week with the near-collapse of Wall Street investment bank Bear Stearns. "You've shown the country and the world that the United States is on top of the situation," the president said.

Oil: Cheney sees the reality

Crude oil prices exceeding $100 a barrel reflect the reality in the market place, US Vice-President Dick Cheney said yesterday.

Cheney, on a trip to the Middle East, said he did not see a lot of excess production capacity worldwide. Asked about the prospects for increased oil production in the region, Cheney told reporters in Baghdad: "One of the problems we've got now obviously is that there is not a lot of excess capacity worldwide."