While that level remains the second highest decennial rate, analysts say the US may never return to its mid-decade housing boom peak in which nearly 70 percent of occupied households were owned by their residents. The reason: a longer-term economic reality of tighter credit, prolonged job losses and reduced government involvement.

Unemployed young adults are least likely to own, delaying first-time home purchases to live with Mom and Dad. Middle-aged adults 35-64, mostly homeowners who were hit with mortgage foreclosures or bankruptcy after the housing bust in 2006, are at their lowest levels of ownership in decades. Measured by race, the homeownership gap between whites and blacks is now at its widest since 1960, wiping out more than 40 years of gains.

"The changes now taking place are mind-boggling: the housing market has completely crashed and attitudes toward housing are shifting from owning to renting," said Patrick Newport, economist with IHS Global Insight. "While 10 years ago owning a home was the American Dream, I'm not sure a lot of people still think that way."

However, the firm emphasised that the downgrades did not "reflect a deterioration in the financial strength of the banking system". Moody's also downgraded nine Portuguese banks, blaming financial weakness. Shares in RBS and Lloyds fell sharply at the start of trading, but then recovered. By early morning RBS shares were down 0.25% while Lloyds was 1% lower.

In a statement, Moody's said: "Moody's Investors Service has today downgraded the senior debt and deposit ratings of 12 UK financial institutions and confirmed the ratings of one institution. "The downgrades have been caused by Moody's reassessment of the support environment in the UK which has resulted in the removal of systemic support for seven smaller institutions and the reduction of systemic support... for five larger, more systemically important financial institutions."

The downgrades include a two-notch cut for government-controlled RBS, and a one-notch cut for Lloyds TSB, a division of part-nationalised Lloyds Banking Group. Spanish bank Santander had its UK business downgraded by one notch, while Nationwide Building Society suffered a two-notch reduction. RBS said it was "disappointed" that Moody's announcement did not reflect the "significant progress" the bank had made to restructure it finances. Nationwide said that Moody's announcement was part of an industry-wide review, and "not a reflection of Nationwide's business model". The building society said in a statement: "Nationwide remains one of the strongest and best capitalised financial organisations in the UK".

Credit rating: The assessment given to debts and borrowers by a ratings agency according to their safety from an investment standpoint - based on their creditworthiness, or the ability of the company or government that is borrowing to repay. Ratings range from AAA, the safest, down to D, a company that has already defaulted. Ratings of BBB- or higher are considered "investment grade". Below that level, they are considered "speculative grade" or more colloquially as junk.

Explaining the move Sir Mervyn told Sky News: "This is the most serious financial crisis we've seen at least since the 1930s, if not ever." The Bank has already pumped 200 billion pounds into the economy. It has done this by buying assets such as government bonds, in an attempt to boost lending by commercial banks. Sir Mervyn said: "We're having to deal with very unusual circumstances and to act calmly and do the right thing. The right thing at present is to create some more money to inject into the economy."

The Bank's Monetary Policy Committee has been split for months over whether the UK needs a boost to the economy through QE, an increase in interest rates to stave off inflation - which at 4.5% is well over double its target - or to leave things as they are. Sir Mervyn said the economic landscape was unfamiliar and the world had changed in the past three months and so had the policy response necessary.

He said the amount of money in the economy was not growing quickly enough. Sir Mervyn also said he could not rule out a further bout of QE.

"Operation Enduring Freedom" aimed to track down Osama Bin Laden after 9/11 and eliminate the Taliban. The UN says more than 10,000 civilians have died in the past five years alone. More than 2,500 international troops have been killed - most of them American. The conflict has already surpassed Vietnam to become the longest war in US history.

Speaking at the Council on Foreign Relations, General McChrystal, who commanded coalition forces in 2009-10 before being forced to resign after a magazine interview, said the US and Nato allies were "a little better than" half way to achieving their military goals. The most difficult task would be to create a legitimate government that ordinary Afghans could believe in and that would balance the influence of the Taliban, he said.

The war is said to have cost the Americans $120 billion, and the British 18 billion pounds. "Just think how, if that money had been judiciously and wisely invested here, it might have transformed everything," said John Simpson, BBC World Affairs editor in Kabul.

The group "prayed that the government would remove the decrees against Jews on the Temple Mount, and that this year we will merit to see the Mount restored to its days of glory as the center of the people of Israel's national home, with the Temple restored to its rightful place," said sources in the Temple Mount Heritage Institute, which led the tour.

*Things are so bad in America that now Hallmark is actually offering a 6 card line of "job loss" greeting cards.

*Things are so bad in America that now gangster rappers are actually making rap videos about using food stamps.

*Things are so bad in America that the number of Americans that are submitting applications for temporary work visas in Canada has approximately doubled since 2008.

*Things are so bad in America that thieves are now stealing air conditioners, drain covers, hair extensions and even embalming fluid.

But things are especially bad for children.

The following are some jaw-dropping statistics about how children are faring in our declining economy...

*The poverty rate for children living in the United States increased to 22% in 2010. That means that tonight more than one out of every five US children is living in poverty.

*Right now, one out of every four American children is on food stamps.

*There are 314 counties in the United States where at least 30% of the children are facing food insecurity.

*In Washington DC, the "child food insecurity rate" is 32.3%.

*More than 20 million US children rely on school meal programs to keep from going hungry.

*Approximately one-third of the entire population of Alabama is now on food stamps.

*The number of Americans that are going to food pantries and soup kitchens has increased by 46% since 2006.

*It is being projected that approximately 50 percent of all US children will be on food stamps at some point in their lives before they reach the age of 18.

*Last year, the number of Americans living in poverty increased by an all-time record 2.6 million.

*It is estimated that up to half a million children may currently be homeless in the United States.

*More than 45 million Americans are now on food stamps. The number of Americans on food stamps has increased 74% since 2007.

Sometimes it is hard to believe that this is still the United States of America.

Aren't we supposed to be the most prosperous nation on the planet?

IT IS ALMOST AS IF WE ARE UNDER SOME SORT OF A CURSE.

But Mr Clarke accused her of 'misrepresenting' the judgment. Yesterday it was revealed that the Bolivian not only argued that he would suffer from being separated from his cat, but also that his pet's quality of life would be affected. It emerged that officials discovered he had arrived in Britain as a student in 2002 and overstayed his two-year visa only when he was arrested for shoplifting in 2007. He was never charged over the shoplifting allegations.

The fallout from the row continued yesterday as David Cameron, in his own Conference speech, publicly sided with Mrs May.

He also slapped down Mr Clarke and appeared to mock the Justice Secretary for being on the side of criminals. Immigration Judge James Devitte allowed the Bolivian to stay in this country under Article 8 of the Human Rights Act - the right to a private and family life.

The Chancellor has cleared the Bank to increase the scale of its quantitative easing (QE) programme from 200 billion pounds to 275 billion pounds due to the deterioration in the economic outlook. In his letter of authorisation to Sir Mervyn King, the Bank's Governor, George Osborne hinted that the Bank could consider using the funds to buy up to 50 billion pounds of "private sector assets", which would potentially transform the way QE has been operated.

Leaving rates on hold at 0.5%, Sir Mervyn said in his letter to the Chancellor: "The pace of global expansion has slackened, especially in the UK's main export markets. Vulnerabilities associated with the indebtedness of some euro-area sovereigns and banks have resulted in severe strains in banks funding markets and financial markets more generally. These tensions in the world economy threaten the UK recovery."

"The available indicators suggest that the underlying rate of growth has moderated. The squeeze on households' real incomes and the fiscal consolidation are likely to continue to weigh on domestic spending, while the strains in banks funding markets may also inhibit the availability of credit to consumers and businesses."

Foreign troops are starting to head home anyway, he argues, and the Taliban are tough enough to keep on fighting for years. "The only way to finish the fight against the Taliban is to bring them to power and get foreigners out," Muttawakil said in an interview at his Kabul home, perched on a mock tiger-skin sofa and dressed in a traditional white shalwar kameez baggy tunic and trousers.

Besides, he adds, corruption, insecurity and immorality have flourished since US-backed troops ousted the group from Kabul, and their return would end much of that. Other Afghans are not as enthusiastic about the reappearance in government of a group they remember as cruel and oppressive rulers. But as foreign troops start to head home with the war far from over, it is a future many are planning for.

Fox Television, a unit of News Corp, issued a tough statement after a report that it had threatened to end the subversive series unless the voice actors take a 45 percent pay cut. "We believe this brilliant series can and should continue, but we cannot produce future seasons under its current financial model," Fox said. "We are hopeful that we can reach an agreement with the voice cast that allows 'The Simpsons' to go on entertaining audiences with original episodes for many years to come," the statement added.

"The Simpsons" is the longest-running comedy series on US television and is currently in its 23rd season on Fox. The show also generates billions of dollars through global syndication, as well as DVD and merchandise sales. "The Simpsons" is broadcast in more than 100 countries and 50 languages and has become a staple of American culture, with the family earning a star on the Hollywood Walk of Fame.

Lily will be revealed in a one-hour Sesame Street primetime special, Growing Hope Against Hunger, which is being sponsored by Walmart. The special will star country singer Brad Paisley and his wife Kimberly Williams Paisley, as well as the Sesame Street Muppets.

"Food insecurity is a growing and difficult issue for adults to discuss, much less children," said the Paisleys in a statement. "We are honored that Sesame Street, with its long history of tackling difficult issues with sensitivity, caring and warmth asked us to be a part of this important project."

The special will share the stories of real-life families to raise awareness of hunger issues in the United States, as well as strategies that have helped these families find food. The United States Department of Agriculture estimates that 17 million American children - nearly 1 in 4 - have limited or uncertain access to affordable and nutritious food. Walmart is sponsoring the show as part of a $1.5 million grant toward the initiative and holding screenings in select communities.

The special is set to air nationwide on October 9.

Families were more dependent on government programs than ever last year. The share of people relying on government benefits has reached a historic high, in large part from the deep recession and meager recovery, but also because of the expansion of government programs over the years.

Means-tested programs, designed to help the needy, accounted for the largest share of recipients last year. Some 34.2% of Americans lived in a household that received benefits such as food stamps, subsidized housing, cash welfare or Medicaid (the federal-state health care program for the poor). Another 14.5% lived in homes where someone was on Medicare (the health care program for the elderly). Nearly 16% lived in households receiving Social Security.

High unemployment and increased reliance on government programs has also shrunk the nation's share of taxpayers. Some 46.4% of households will pay no federal income tax this year, according to the nonpartisan Tax Policy Center. That's up from 39.9% in 2007, the year the recession began.

The late-day "melt-up" that pushed the S&P 500 index out of bear-market territory might be construed as good news. But it brings back echoes of the "flash crash" that saw markets dive by several hundred points in a matter of minutes, and it's a big reason many are staying away from the market.

"Everyone is scared in both ways - the shorts are scared, the longs are scared, everyone is scared. The high-net-worth investor is very, very scared," said Stephen Solaka, managing partner at Belmont Capital Group in Los Angeles, which manages money for independent wealth advisers and family offices.

Tuesday's move was the latest example of an erratic, high-octane stock market increasingly driven by levered exchange traded funds and complicated hedging and options strategies that unwind with dizzying speed. It's a far cry from when the US stock market was viewed as a place for capital-raising by businesses seeking to expand and a place for investors looking to put their savings to work.

The IMF also warned that a recession in Europe in 2012 could not be ruled out. Separately, a Markit PMI study said the eurozone's service sector shrank for the first time in two years last month. The IMF's warning came in its latest 100-page report on the economic outlook for Europe."Finding a durable solution to the euro area sovereign crisis has become more than overdue," the IMF said in its report.

"(This) will require some difficult decisions to improve crisis management and a demonstration of unity behind the project of economic and monetary union that will convince markets. The pursuit of nominal deficit targets should not come at the expense of risking a widespread contraction in economic activity," the IMF said.

"If (economic) activity were to undershoot current expectations and risk a period of stagnation or contraction, countries that face historically low yields (for example, Germany and the UK) should also consider delaying some of their planned consolidation."

It also emerged there are three times more senior officers than Apache attack helicopters, which play a vital role in Afghanistan. The disturbing imbalances were discovered by Frank Ledwidge, who served on the frontline in Iraq, Bosnia and Kosovo. 'Our priorities are hugely skewed,' he said. 'The British Army is over-burdened and over-staffed with senior ranks. We need to think about cutting top brass and the focus now should be on our conflicts rather than promotion.'

He believes retaining so many one-star generals and above earning £100,000-a-year plus while cutting spending is devastating morale in the Armed Forces. One tank officer said: 'When the MoD is making large cuts to equipment and personnel, the troops are rightly going to question why we need to retain so many well-paid senior officers living a good life.' The Royal Navy is suffering a similar plight with more admirals than active warships, according to an 2008 study. Following the recent defence cuts, the senior service now has just 20 fighting surface ships, which are destroyers and frigates.