Amid a global equities sell off, president George Bush says the the US is “on top” of the current economic crisis.

Investors have failed to respond to Bush’s optimism, however, focusing instead on the collapse of Bear Stearns, with markets from New York to Tokyo recording heavy losses.

According to BBC:

In New York the Dow Jones Industrials tumbled 194 points, more than 1.5%, in early trading before recovering.

London’s FTSE 100 index was down 2.7%, in Paris the Cac 40 slumped 2.9% and Frankfurt’s Dax fell 4.1%.

US and European banks were hammered; Lehman Brothers fell 30%, UBS lost 13% and Commerzbank fell 7.

Bush may believe the US — that is primarily the Fed — is on top of the current economic crisis. The problem with this optimism, according to Bill Bonner, is that “the science of modern central banking is largely humbug.”

“If Bernanke can rescue the U.S. economy, he will be a hero. If he messes up, he will be a schmuck.

“Our guess is that he will be a schmuck. Because the theory behind his intervention is as unsound as phrenology.”

All the Fed is achieving is the destruction of the dollar, says John Stepek.

“The Fed has been focusing on making more cheap money available to cushion the fall of the financial sector, but it’s not working. Banks need all the money they can get to shore up their balance sheets. They are no longer interested in lending it out, cheaply or otherwise.”