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CNN Live Sunday

Bush Administration Concerned About Stock Markets

Aired July 21, 2002 - 17:01   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: The financial quake that has stocks tumbling on Wall Street is sending shockwaves down Pennsylvania Avenue as well. Members of Congress are proposing remedies and blaming each others' parties. CNN's White House Correspondent Suzanne Malveaux joins us with the Bush administration's take on this crisis of confidence. Hi, Suzanne, how are you?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hi, Fred. Well the White House is certainly nervous. Wall Street is nervous as well as investors, everybody looking to Monday morning when the stock market opens.

(BEGIN VIDEOTAPE)

MALVEAUX (voice-over): President Bush was greeted warmly upon his return from Camp David, but he continues to face tough questions from an increasingly nervous public. More than 50 percent of Americans are invested in the stock market and now everyone wants to know when it will bounce back.

After two weeks, the market is down more than 14 percent. The White House is nervous about what to expect when the markets open Monday. The administration's strategy, get Mr. Bush out there, focus on the positive economic indicators, low interest rates, low inflation, and new growth.

But financial analysts have seen little benefit from the presidential cheerleading, stocks plummeting after his rallies in Alabama and on Wall Street. Dick Grasso, Chairman of the New York Stock Exchange had hoped investors would, in his words, "react very confidently to Mr. Bush's message," but he has since toned down his expectations.

DICK GRASSO, CHAIRMAN & CEO, NEW YORK STOCK EXCHANGE: You can't expect one speech on one day, where in the course of three weeks the marketplace to turn. It's a long-term project. I think it's being successfully deployed.

MALVEAUX: What about Congress' pending legislation aimed at cracking down on corporate abuse and beefing up auditing regulations? Is it likely to bring back investors and make a difference? Financial Analyst Pablo Galarza says no.

PABLO GALARZA, MONEY MAGAZINE: There's nothing President Bush can do. There's nothing Congress can do to help this market. The only thing that could help this market is for investors to regain confidence in the stock market.

(END VIDEOTAPE)

MALVEAUX: Now, Fredricka, of course the big question is how do they regain confidence back in the stock market. Well analysts say it can be determined by so many different things. If there are further revelations of corporate scandal or abuse or events unfolding in the Middle East or even possibly another terrorist attack, but all the analysts say that they do think there's going to be a dip before it goes back up. Fred.

WHITFIELD: All right, by about how much? Are they making a forecast on how much that dip would be?

MALVEAUX: It's so hard to predict, but some analysts saying as much as ten percent, others saying about five percent. They don't want to predict but it could be much, much worse. They're saying that look, they think it's going to dip, that it has not bottomed out yet before it's going to get better, so still hold on. You're going to see some of those numbers dip. That's according to the analysts.

WHITFIELD: All right, thanks very much Suzanne Malveaux, appreciate it.

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