By Eddie Evans
NEW YORK (Reuters) - Consumer confidence and new-home construction plummeted, in further signs of deepening world financial crisis ahead of a meeting between U.S. President George W. Bush and European leaders.
Bush said government interventions to stop the crisis needed time to take effect, while even calls by famed investor Warren Buffett that it was time to buy U.S. stocks went unheeded by Wall Street.
Bush said he would continue "close consultations" with Europe at a meeting on Saturday with French President Nicolas Sarkozy and European Commission President Jose Manuel Barroso.
"Our European partners are taking bold steps. They show the world that we're determined to overcome this challenge together. And they have the full support of the United States," Bush said in a speech at the U.S. Chamber of Commerce.
But he did not specifically mention calls by European leaders this week to reform the financial system that the world has been operating under since 1944 and White House spokeswoman Dana Perino said the U.S. focus was on the immediate crisis.
"I think the most important thing we can do is make sure that we stop the bleeding here before we move on to the next project," she told reporters.
Sarkozy and Barroso are expected to arrive at Camp David, the presidential retreat in Maryland, at about 4 p.m. (2000 GMT) and stay for about three hours, the White House said.
Writing in the Washington Post on Friday, British Prime Minister Gordon Brown said post-World War II financial institutions were out of date.
"They have to be rebuilt for a wholly new era in which there is global, not national, competition and open, not closed, economies," he wrote.
BUFFETT BUYS
A Reuters/University of Michigan survey said U.S. consumer confidence in October suffered its steepest monthly drop since the survey began in 1952. That followed a U.S. government report that construction starts on new homes fell to their slowest pace since January 1991.
The day after oil prices fell below $70 a barrel for the first time in 14 months, the world's biggest oilfield services company, Schlumberger Ltd said weaker drilling activity in North America and some emerging markets would hit its operations into next year.
Buffett, the world's richest man, wrote in the New York Times that he was buying U.S. stocks for his personal account, saying the market was likely to move higher before sentiment or the economy changed. "So if you wait for the robins, spring will be over," he wrote.
Wall Street were lower late morning after briefly turning positive in volatile trade.
The FTSEurofirst 300 index of top European shares was up 4 percent.
Interbank lending rates for dollars, euros and the pound fell, suggesting central banks' efforts to provide liquidity were beginning to thaw frozen money markets.
Ukraine said the International Monetary Fund was prepared to give it $14 billion in credit, while Hungary slashed its growth forecast after agreeing on a 5 billion-euro deal with the European Central Bank to keep euros flowing through its banking system.
Iceland, driven close to bankruptcy as frozen credit markets caused its banks to fail, will decide within a week whether to take an IMF loan.
A Ukraine presidential spokeswoman said: "President Viktor Yushchenko would hold a meeting with officials from the IMF, which is ready to give Ukraine credit of $14 billion for the stabilization of our country's financial sector."
In neighboring Russia, hit hard by the crisis and international wariness after Russia's brief war with former Soviet Georgia, Finance Minister Alexei Kudrin said investors had pulled $33 billion out of the country in August-September.
He said stocks would fall further.
A source said another Russian bank could be nationalized, bringing the total to four.
Hungary slashed its forecast for growth next year by almost two percentage points, showing its economy set to suffer even if it can quell market upheaval around its banks and finances.
ASIA STRUGGLES
In Asia, governments scrambled to find ways to shore up their banks and combat an economic slowdown.
Reflecting growing alarm over the widening credit crisis, a panel of Japan's ruling Liberal Democratic Party was considering ways to recapitalize big banks with government money, Kyodo news agency reported.
Japan's Nikkei index closed 2.78 percent higher.
In South Korea, authorities pledged action to stabilize markets. Media reports said the steps, to be announced on Sunday, could include funding for local banks struggling to find international banks willing to lend dollars.
Australia's prime minister held a summit with industry leaders, who said credit was drying up and smaller companies were collapsing despite assurances the economy was in good shape.
Singapore and Malaysia both said they would guarantee all bank deposits until 2010, following similar moves worldwide.
After world governments pledged $3.2 trillion to stabilize the financial sector, money markets have shown tentative signs of healing, though interbank lending is still tentative at best.
(Reporting by Reuters bureaus around the world; Editing by Brian Moss and Steve Orlofsky)
