A cut on Friday extended six weeks of devaluations by Russia's central bank designed to offset the impact of the global economic crisis and falling oil prices as the country's main export commodity approached its lowest level since 2004. Mikhail Gorbachev, the former Soviet leader, warned Russia faced "unprecedentedly difficult and dangerous circumstances" and could be "heading into a black hole. It is not clear what the fate of our rouble will be or if society has sufficient financial and moral resources," he said.

After the depreciation, which was the eighth so far this month, the rouble declined as much as 1.2 per cent to Rbs29.06 versus the dollar on Friday, a four year low. The rouble has now lost nearly 20 per cent of its value against the US currency since August. Analysts at Barclays Capital said the best case scenario would see Russian policymakers, facing the mounting evidence of a recession, allowing a one-off depreciation of 10 per cent or more.

Mikhail Sukhodolsky, a deputy interior minister, warned on Christmas Eve that there could be further protests. "The situation may be exacerbated by a growth in frustration of workers over the non-payment of wages or those threatened with dismissal," he said.

The ongoing recession and global economic shock pummeled stocks this year, with the Dow Jones industrial average slumping 36.2 percent. That's the biggest drop since 1931 when the Great Depression sent stocks reeling 40.6 percent. The Standard & Poor's 500 index is set to record the biggest drop since its creation in 1957. The index of America's biggest companies is down 40.9 percent for the year.

With these statistics ready to play out this week, it is little wonder why investors are all too happy to close the books on 2008. Analysts are looking toward January as a crucial period for the market as it tries to recover some of the $7.3 trillion wiped from the Dow Jones Wilshire 5000 index, the broadest measure of U.S. stocks.

He said many analysts are jumping past this week and focusing on next month, especially with Barack Obama set to be sworn in as president on Jan. 20. There is hope that the new administration will deliver another stimulus package, which along with December's interest rate cuts, might help quell the financial crisis. Trading is expected to remain volatile with many market participants on the sidelines during the holiday-shortened week, but that doesn't mean investors won't be kept busy.

As this can be the warning of a much bigger quake - this situation needs watching. View details

Today, there is a danger of the same process repeating itself. Hizbullah is an Iranian creation. Hamas is not. But it has drawn itself increasingly into Iran's orbit. Much of its imported weaponry, and the expertise with which it now produces and refines its own rockets, have been provided by Iran. Dozens of its commanders have been trained in Iran in recent years, coming home and disseminating that "education" as Hamas has built an army in Gaza. And, increasingly too, Hamas has come to act in the service of Iran's aims. Iran is avowedly committed to Israel's destruction, and regards Hamas as a tool toward this goal.

The same Iran, via an emboldened Hizbullah, is now most of the way to achieving proxy control not merely of southern Lebanon, but all of Lebanon. The same Iran, already armed with missiles that can reach Israel, is extending its missile range to Europe and, it hopes, ultimately to North America. The same Iran is openly challenging not just the Middle East order but the world order, with President Mahmoud Ahmadinejad personifying that challenge, thoroughly backed by the entire Teheran regime.

And that same Iran is moving ever closer to the nuclear capability it intends to use in the service of its goals. The long-term deterrence of Hamas's capacity to threaten Israel would represent the long-term deterrence of one aspect of Iran's rapacious and far-reaching power drive.

Israeli Foreign Minister, Tzipi Livni, says the operation has been a success so far and the aim is to "change realities on the ground" in Gaza. Israel has threatened to launch a ground assault and is now calling up 6,500 army reservists. Palestinians say at least 280 people have died in the air raids.

A major tunnel bringing fuel into Gaza from Egypt was among three destroyed, Palestinians say. But Israel says its jets bombed more than 40 tunnels. Israel accuses Palestinian militants of using the tunnels to smuggle weapons into Gaza. At the UN, the Security Council called for an end to all violence in Gaza, including rocket attacks from Gaza. Israel says militants have fired 110 rockets into Israel since Saturday.

The first, on May 21, headed "Climate change threat to Alpine ski resorts", reported that the entire Alpine "winter sports industry" could soon "grind to a halt for lack of snow". The second, on December 19, headed "The Alps have best snow conditions in a generation", reported that this winter's Alpine snowfalls "look set to beat all records by New Year's Day".

Secondly, 2008 was the year when any pretence that there was a "scientific consensus" in favour of man-made global warming collapsed. At long last, as in the Manhattan Declaration last March, hundreds of proper scientists, including many of the world's most eminent climate experts, have been rallying to pour scorn on that "consensus" which was only a politically engineered artefact, based on ever more blatantly manipulated data and computer models programmed to produce no more than convenient fictions.

As 2009 dawns, it is time we in Britain faced up to the genuine crisis now fast approaching from the fact that – unless we get on very soon with building enough proper power stations to fill our looming "energy gap" - within a few years our lights will go out and what remains of our economy will judder to a halt. After years of infantile displacement activity, it is high time our politicians – along with those of the EU and President Obama's US – were brought back with A MIGHTY JOLT INTO CONTACT WITH THE REAL WORLD.

Investment bankers are preparing for a second round of capital raising by UK lenders on top of the £65bn already declared. Having rebuilt their balance sheets after toxic debt writedowns, the banks face an increasingly dire economic outlook that threatens to take ordinary loan impairments from individuals and businesses to levels not seen since the early 1990s.

Under those worst-case conditions, impairment charges at the domestic banks – Barclays, Royal Bank of Scotland and the combined Lloyds Banking Group – could hit £60bn next year, according to Credit Suisse analysts.

"There could be a second credit crunch for banks, with a whole new round of writedowns late in 2009 as the economy filters back to banks," a senior investment banker said. "They have so far only provisioned for the credit crunch – so they will need to undertake a whole new round of capital raising."

Professor Lang lists a series of "new fundamentals", which he outlined during a speech he made as the president-elect of charity Garden Organic, which will shape future food production, including:

OIL AND ENERGY: "We have an entirely oil-based food economy, and yet oil is running out. The impact of that on agriculture is one of the drivers of the volatility in the world food commodity markets."

WATER SCARCITY: "One of the key things that I have been pushing is to get the UK government to start auditing food by water," Professor Lang said, adding that 50% of the UK's vegetables are imported, many from water-stressed nations.

BIODIVERSITY: "Biodiversity must not just be protected, it must be replaced and enhanced; but that is going to require a very different way of growing food and using the land."

URBANISATION: "Probably the most important thing within the social sphere. More people now live in towns than in the countryside. In which case, where do they get their food?"

Most of those killed were policemen in the Hamas militant movement, which controls Gaza, but women and children also died, the Gaza officials said. About 700 others were wounded, as missiles struck security compounds and militant bases, the officials added.

Israeli PM Ehud Olmert said the operation "may take some time"- but he pledged to avoid a humanitarian crisis. "It's not going to last a few days," he said in a televised statement, flanked by Israeli Defence Minister Ehud Barak and Foreign Minister Tzipi Livni. Israel said it was responding to an escalation in rocket attacks from Gaza and would bomb "as long as necessary".

UPDATE - news.sky.com - The exiled leader of Hamas has called for suicide bombings in response to Israeli airstrikes in Gaza that have killed at least 227 people - over 700 wounded!

Buoyed by the soaring yen, Japanese businesses have also been put off the United Kingdom as a hub of their operations by Britain's decision not to join the euro. A further black mark has been the sense of the UK's "geographical isolation" from the rest of the continent.

Top of the list of reasons for firms' departure for Germany is transport links in the south-east. Businesses in Japan assume that trains and planes will arrive on time, be clean and not prohibitively expensive, and first-time visitors are shocked to find that the same does not hold true in London.

Many companies are setting up in Düsseldorf, where 168 companies are members of the Japanese Business Association, or Frankfurt because of its good access to markets across Europe. Also the home of the European Central Bank, some 210 Japanese companies – including Honda, Mitsubishi, Suzuki and Canon – are now operating in the Frankfurt area, which is home to more than 4,000 Japanese nationals.

The warning marked a dramatic rise in tension between the nuclear-armed neighbours after last month's attack on Mumbai, in which 179 people were killed and which India has blamed on Islamist militants based in Pakistan.

It followed media reports in Pakistan and India that "several" Indian nationals had been arrested in the last two days after bombings in the Pakistani cities of Lahore and Multan

"Indian citizens are therefore advised that it would be unsafe for them to travel (to) or be in Pakistan," India's Foreign Ministry spokesman said in a statement. Another Foreign Ministry official contacted by Reuters said the warning referred to all travel to Pakistan.

The move represents a sharp escalation in the standoff between the nuclear-armed neighbors and will hurt Pakistan's US backed campaign against al-Qaida and Taliban taking place near Afghanistan's border.

Two intelligence officials said the army's 14th Division was being redeployed to Kasur and Sialkot, close to the Indian border. They said some 20,000 troops were on the move. Earlier Friday, a security official said that all troop leave had been cancelled.

The officials spoke on condition of anonymity because of the sensitivity of the situation.

During Midnight Mass at the Church of the Nativity in Bethlehem, Archbishop Fouad Twal affirmed that some 2,000 years ago God designated Bethlehem "his home and his meeting place with men." Archbishop Twal called Bethlehem a "city of peace, of divine love and of reconciliation," and affirmed that "peace is a right for all men."

"It is also the solution for all conflicts and differences," he continued. "War does not produce peace, prisons do not guarantee stability. The highest of walls do not assure security. Neither the aggressor nor the aggressed enjoy peace. Peace is a gift of God and only God can give that peace."

The Pope decried instability in the Democratic Republic of Congo (DRC), Sudan and Somalia, and lamented the plight of ordinary Zimbabweans. He also called for solidarity in the face of an ever more uncertain future. "If people look only to their own interests, our world will certainly fall apart," he told tens of thousands of worshippers gathered in St Peter's Square.

Pope Benedict plans to visit Cameroon and Angola in March, and then Israel, the Palestinian territories and Jordan next May in order to see for himself the Middle East situation and encourage peaceful solutions to conflict there, our correspondent says. "May the divine light of Bethlehem radiate throughout the Holy Land," the Pope said.

His remarks echoed those of his earlier Midnight Mass, in which he called for an end to "hatred and violence" in the Middle East.

The closing days of 2008 may be marked by floods, terrorism and global financial collapse - but Pope Benedict XVI has assured believers that the end of the world is not nigh.

Speaking at a ceremony at which he blessed figures of the infant Jesus for Rome Nativity cribs, the Pope said there had been "alarmism" about the end of the world since the days of St Paul, who in his Letter to the Philippians had told early Christians to rejoice because "The Lord is at hand" (Phil. 4:4-5). This had been wrongly taken to mean the imminent approach of the Last Judgement.

Last year the Pope dismissed recurring "Messianical" predictions of the imminent end the world, saying "history is ongoing, and involves human tragedies and natural calamities." He added, echoing Pope John Paul II, his predecessor, "Do not be afraid".