"There's no question about it. Wall Street got drunk," Bush said at a private event in Houston on Friday. "It got drunk and now it's got a hangover. The question is, how long will it sober up and not try to do all these fancy financial instruments?"

Bush's comments were recorded on a cellular telephone camera and posted to the YouTube Internet site on Tuesday.

He was in Houston to raise money for Republican congressional candidate Pete Olson, who is challenging incumbent Democratic Rep. Nick Lampson.

"He has said before that Wall Street was dealing with very complex financial instruments and that the markets didn't fully understand the risks that those instruments posed to the system," White House spokeswoman Dana Perino said.

"It is certainly a more colorful way of saying what he said before, but he's described it that way before in terms of his observations of what happened to the market," she said.

The video shows Bush joking with a friendly crowd and musing about his life when he leaves the White House in January.

"We've got a housing issue," Bush said. "Not in Houston, evidently not in Dallas, because Laura's over there trying to buy a house today."

Bush explained that his wife no longer wished to live in rural Crawford, Texas, and preferred Dallas where the Bush presidential library will be located.

"I like Crawford, unfortunately after eight years of asking her to sacrifice, I am no longer the decision maker," he said. "I did tell her, 'Honey, we've been on government pay now for 14 years, go slow.'"

Photo Copyright Getty Images

Copyright 2008 Reuters. click for restrictions

NEW YORK (Reuters) - The deepening plight of the American consumer has started to take a big bite out of corporate earnings.

A number of major companies who rely on consumer spending warned about their results on Monday evening, including credit card company American Express Co, Macintosh computer and iPod maker Apple Inc and cruise ship operator Royal Caribbean Cruises Ltd.

The breadth of the warnings, which also came from makers of chips and carpets, may signal that the credit crisis is quickly moving beyond housing and banks and into mainstream Corporate America.

"It's understandable that the U.S. consumer would be apprehensive with the circumstances -- weakness in housing, gasoline is up, the stock market is down and job insecurity," said Brian Gendreau, an investment strategist in New York for ING Investment Management Americas. "We may actually have a consumer-led recession -- which is rare."

The wrath of the credit crunch and housing collapse of the past year has largely been felt by middle- or lower-income people. But Monday's results reflected a broadening of fears.

American Express executives said that even customers with solid credit scores were facing difficulties and even the very affluent have in some cases cut back discretionary spending.

Monday's bad news came from a wide swath of sectors and raised concerns about how strong two of the major consumer events will be this year -- back-to-school season and year-end holiday spending.

"If you look at energy prices and things like that, it's not any big surprise the consumer has been cautious," said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto. "It's a splash of cold water on the theory that earnings will bounce back quickly."

ISSUES AT AMEX

The biggest disappointment on Monday came from American Express, whose quarterly profit fell 38 percent as it set aside more money to cover credit losses, sending its shares down more than 11 percent.

The company said it was no longer on track to boost earnings per share by 4 percent to 6 percent this year because the U.S. economy has slowed, particularly in June.

"While we have been able to generate substantial earnings and returns relative to many in the financial sector, we do not expect to meet or exceed our long-term financial targets until we see improvements in the economy," Kenneth Chenault, chairman and chief executive, said in a statement.

American Express customers tend to be wealthier than the average credit card user. If its customers are slowing down spending and increasingly delinquent on paying, the news could be worse for the less-prosperous customers of other lenders.

"What's getting people nervous is seeing this downturn affect their top super-prime customers," said Paul Hickey, co-founder of Bespoke Investment Group LLC in Mamaroneck, New York. "While it is not surprising that no one is insulated from the crisis, everyone is really concentrating on how even the best of the best aren't doing so hot."

SOUR APPLE AND TEXAS TROUBLES

On the technology side, Apple provided one of the biggest downers when it warned current-quarter earnings would miss Wall Street targets despite a better-than-expected third quarter.

Apple sold more than 11 million iPods, a 12 percent increase from a year ago and ahead of forecasts of up to 10.5 million. Sales of iPhones also topped forecasts. Apple sold 717,000 iPhones during the quarter, more than double the amount sold a year ago when the device was first launched.

While Apple has a reputation for giving conservative guidance, its view for the fiscal fourth quarter undercut analysts' expectations to a deeper degree than usual and its stock lost 9 percent after the market closed.

"It's a reaction to Apple's typical conservative guidance," Chris Whitmore of Deutsche Bank said. "Investors are likely to focus on the rationale for the conservative guidance."

Also in the tech world, Texas Instruments Inc scared away the bulls with a weak current-quarter outlook and disappointing past results, sending its shares down 7 percent.

TI is a key technology and consumer indicator, as it makes analog chips for everything from cell phones to industrial equipment.

It forecast earnings of 41 to 47 cents per share on revenue of $3.26 billion to $3.54 billion for the third quarter versus Wall Street's call for 51 cents on revenue of $3.57 billion.

The third quarter is often a strong one for TI due to back-to-school sales and as demand increases ahead of year-end holiday-season shopping.

"It's very worrying for TI and the semiconductor industry," Charter Equity Research analyst John Dryden said. "The outlook was as poor as the report."

Dryden said that while slowing wireless demand could only mean softness at a few companies, weakness in analog chips reflected badly on multiple industries. "When you're talking analog you're talking thousands and thousands of customers."

SINKING SHIPS?

As for higher-end discretionary spending, Royal Caribbean reported a narrower quarterly profit due to a doubling of fuel costs, and laid out a plan to save $125 million a year.

"Too much of our profitability is being eroded by the increase in fuel prices. This is unacceptable and we are evaluating everything we do to find ways to do it more efficiently and effectively," said Richard Fain, chairman and chief executive of the world's number-two cruise operator.

Royal Caribbean said net income was $84.7 million, or 40 cents per share, down from $128.7 million, or 60 cents, for the comparable year-ago period. Its fuel prices rose 55 percent.

As part of its cost-cutting, the company said it would eliminate about 400 shore-side positions.

Photo Copyright Mario Tama

Copyright 2008 Reuters. click for restrictions

(UPI) – Many economists are expressing general skepticism regarding Washington political leaders' consideration of a second economic stimulus package in 2008.

Some argue it's a good idea if done differently from the first time but others are doubtful that money will circulate through the economy quickly enough or that recipients will spend the checks rather than deposit them in savings, The Christian Science Monitor reported Monday.

 "The downside risks are significant. Another well-timed and targeted stimulus package would be helpful," Mark Zandi, chief economist at Moody's Economy. com, told the Monitor.

But University of Michigan economist Joel Slemrod has been studying what taxpayers have done with their first rebate checks.

"So far, we're finding that 20 percent of the people say the rebate led them to spend more," says Slemrod, noting that in May, the personal savings rate also soared to 5 percent, up from 0.4 percent the month before.

He told the Monitor he has a wait-and-see attitude about a second stimulus package.
"I'm not sure we would want to do a second dose the same (way) as the first dose, he says."