The only thing that can be known about them is that if they are rating bonds at S&P, they can't possibly be good at rating bonds. The bond market is a multi-trillion market that is immensely lucrative. Bond trading is a great way to make a buck because there are unlimited bucks to be made - if, and only if, you know something useful about whether the bond in question actually has a lower or higher risk inherent in it than the level implied in the market's current pricing.

So if you are any good at all at rating the riskiness of debt instruments, you will not be working for a couple hundred thousand a year at S&P, you will be working for yourself, or for the bond trading desk of an investment bank or a bond hedge fund making tens of millions of dollars per year - or a lot more if you are running the hedge fund. Only if you are incapable of knowing something useful about the true risk profile of bonds will you take a job rating bonds at S&P. Or alternatively you actually know something useful but have no confidence whatsoever that you know do so you won't put any personal financial risk behind your opinions. In either case, the output is clear: because of the position you occupy, you are someone to whom no one should listen.

S&P is a subsidiary of publicly-traded corporation McGraw-Hill. S&P is driven to help McGraw-Hill march its quarterly earnings ever forward lest bad things happen to both subsidiary and parent. This is hardly the environment in which we are likely to find a huge agglomeration of public servants.

And remember the business model of S&P: it makes its money from charging those it rates lots of money to rate them. Prior to the crash of 2008, it was an awesome business because the use of its product was legislatively driven. That is to say, most institutional investors have regulatory fiduciary requirements that necessitate the use of credit ratings as part of their daily business. They may think that S&P really has no useful insights, but they still need to use its ratings. So this business is pretty much like any business that is given a legislative right to serve - like your local electric or gas utility: it doesn't need to worry much about being any good because the customer doesn't have much choice.

This is all theoretical, you might argue. OK then, let's go empirical. What is S&P's recent track record on understanding and rating debt instruments in the USA? Answer: disastrously bad. Three years ago it could not have possibly been more wrong on its ratings of US mortgage debt instruments. Chimps throwing darts would have been infinitely better than these so-called experts were.

So the question has to be asked again: Why on earth do we pay any attention whatsoever to S&P's downgrade of US government debt? It has a horrible track record and in fact helped enormously to get the US government into the crisis for which it now condemns the handling. Their raters wouldn't be rating bonds if they actually were any good at it. It operates in a protected industry that insulates it from the usual consequences of incompetence. And its business model is one big conflict of interest.

The US provided $47 million in "development aid" to China in 2010, even though the nation is already a military and economic giant and the world's only other true superpower. The aid helped rural Chinese get on the Internet and improve public infrastructure - including metro train service in Guangzhou. Much of the aid is also channeled through the US National Institutes of Health. "Here we are sending money to a nation that we are diametrically opposed to in a time when America is broke," said Andrea Lafferty, of the Traditional Values Coalition. "People are losing their homes and jobs, so why are we giving money to China?"

The Traditional Values Coalition completed a lengthy analysis of NIH funding to China. It found US taxpayers foot the bill for Chinese students to study retirement in Beijing, reproduction in Shanghai and prostitution in the Yunnan Province. The NIH also gave American university professors' millions to study in China, from why children lie to why the Chinese smoke tobacco.

"We are calling for a moratorium for all behavioral science and foreign aid grants out of NIH until some adult can oversee what is going on and monitor the craziness out of there," said Lafferty. Webb and Senator James Inofe also say it is time to cut China off from the taxpayer gravy train. Both the United Kingdom and Australia announced earlier this year they would no longer provide direct assistance to China.

Angela Merkel, the chancellor, and her finance minister Wolfgang Schauble face a revolt among their own supporters in both the Christian Democratic Union and the Free Democratic Party, junior partner in the ruling coalition in Berlin, over the deal they agreed last month with their 16 eurozone partners in Brussels.

The complex political landscape means that Ms Merkel is determined to resist pressure from her partners, and from the European Commission, for any further measures - such as increasing the size of the 440 billion euros European Financial Stability Facility, or introducing eurozone bonds - for fear of losing her parliamentary majority. Some members of the CDU have already called for an emergency party conference to debate the government's entire eurozone strategy. They include new powers for the EFSF to buy eurozone government bonds in the secondary market, and to issue precautionary loans to countries with liquidity problems, and to recapitalise banks.

A separate move by dissidents in the FDP to call an emergency session of the Bundestag seems likely to be blocked, because the opposition Social Democrats (SPD) back the government line to wait for the parliament to reconvene in September. The German government is also facing a highly critical press in the wake of the weekend decision by the European Central Bank to buy Italian and Spanish bonds, a move that was welcomed by Berlin, although it is opposed by the Bundesbank, Germany's highly independent central bank, in Frankfurt.

The greenback declined versus the majority of its most-traded peers as the Fed said growth was "considerably slower" than it expected and it's prepared to use a range of policy tools to boost the economy. The meeting came a day after economic weakening and a Standard & Poor's US credit-rating cut spurred a global stock rout. Commodity currencies recouped losses sustained just after the meeting. Stocks and gold surged.

"With the Fed saying they have tools available that they are willing to use and giving a more definitive time frame, that is overall going to be a dollar negative," said John Doyle, a strategist in Washington at the currency-trading firm Tempus Consulting Inc. "Swiss franc and gold have absolutely been the beneficiaries of uncertainty."

The dollar fell 4.5 percent to 72.09 Swiss centimes at 5 pm in New York, from 75.50 yesterday. It dropped as much as 6.3 percent, the most since the beginning of Bloomberg records in January 1971, touching a record low 70.71 centimes. The euro dropped 3.2 percent to 1.0364 after touching the record low 1.0075. The US currency depreciated 1.4 percent to $1.4376 per euro and fell 1 percent to 76.96 yen.

"The Swiss franc is a falling knife, and no one wants to catch it," said Vassili Serebriakov, a currency strategist at Wells Fargo & Co in New York. "It will take a policy action to stop and reverse the uptrend in the Swiss." Gold for December delivery reached a record $1,782.50 an ounce today. Central banks intervene in foreign-exchange markets by selling or buying currencies to influence prices.

GREAT BRITAIN - In late June, half the public schools in Britain were closed by a massive protest over public pensions cuts, including three major teachers' unions, customs and immigration officers, and air traffic controllers. Some 750,000 people took part in the protest. London's press has reported that discontent has been simmering among Britain's urban poor for years, in neighborhoods like Tottenham, where the riots started. But as one man told NBC News about an economic protest two months ago, "There was not a word in the press about our protests. Last night (Saturday) a bit of rioting and looting and now look around you."

ISRAEL - Some 250,000 people took to the streets of Tel Aviv, Israel, on Saturday over the rising cost of living. Demonstrations actually began last month when a few people set up tents in an expensive part of Tel Aviv to protest rising property prices. The protests have moved to other cities in Israel, where some 50,000 people rallied.

GREECE - In late June, riots broke out in Athens and other parts of Greece as the country's parliament voted to approve severe cutbacks in government spending. Greek lawmakers made the cuts in order to receive more bailout money from the International Monetary Fund and European Union - or run the risk of defaulting on their debts.

SPAIN - Thousands of people turned out in late May to protest the country's 21 percent unemployment rate.

They also demonstrated against government corruption and austerity measures to reign in the country's debt. Hundreds of people set up tents in a Madrid square and spent a week there in protest.

PORTUGAL - Saw massive strikes and protests last March in response to government spending cuts. At least 200,000 people gathered in Lisbon.

THE PHILIPPINES - Thousand of workers took to the streets throughout the country in May of this year to march for higher pay. They demanded better wages in light of rising inflation, including higher oil prices.

They called on the government of President Benigno Aquino III to do more to help protect jobs.

CHINA - Nearly 1,000 cab drivers in eastern China blocked traffic and protested on August 1 over rising fuel costs. It was the latest sign of discontent about the country's surging inflation. Inflation is hitting China hard, with food prices recently increasing 12 percent. Many Chinese officials are reportedly concerned that inflation, along with rising property prices, could lead to even more unrest.

SYRIA - In another legacy from the Arab Spring, protests and riots in Syria against the rule of President Bashar al-Assad have been going on for five months. Reports say at least 1,600 people have been killed by government forces. The demonstrations are a combination of calls for economic as well as political changes.

It begins with a few dry weeks strung out end on end, cloudless skies and hot weather. Lawns brown as if toasted, and river and lake levels drop, like puddles evaporating after the rain. Farmers worry over wilting crops as soil turns to useless dust. But for most of us, life goes on normally, the dry days in the background - until one moment we wake up and realize that we're living through a natural catastrophe. Weather experts like to call drought the "creeping disaster." Though it destroys no property, and yields no direct death toll, drought can cost billions of dollars, lasting for months and even years. The writer Alex Prud'homme - author of a great new book on water called The Ripple Effect - compares drought to a "python, which slowly and inexorably squeezes its prey to death."

This summer, the python has gripped much of the South, from the burnt fringes of Arizona - singed by record-breaking wildfires - to usually swampy Georgia. Ground zero is Texas, which is suffering through the worst one-year drought on record, with the state receiving just six inches (15 cm) of rain since January. At the end of July, a record-breaking 12% of the continental US was in a state of "exceptional drought" - the most severe ranking given by the National Drought Mitigation Center.

More than 2 million acres of farmland in Texas have been abandoned, streets are cracking as trees desperately draw the remaining moisture from the ground, and ranchers whose pasture land has gone dry are selling off cattle by the thousands. "This historic drought has depleted water resources, leaving our state's farmers and ranches in a state of dire need," said Texas agriculture commissioner Todd Staples last week. "The damage to our economy is already measured in billions of dollars and continues to mount."

Addessing the social crises that exacerbate drought and adapting to the dry conditions that are unavoidable will help, but there might be limits to what we can do in the face of the creeping disaster - after all, we still can't make it rain. Churches in the South - and politicians like Texas Governor Rick Perry - have offered prayers for rain over the course of the drought. So far those pleas haven't been answered, but those in prayer would do well to remember the old saying: God helps those who help themselves.

- Fresh violence flares tonight in Birmingham, Wolverhampton, West Bromwich, Manchester and Salford

- 16,000 officers on London's streets to control violence

- Tense situation with yobs and riot police in Canning Town, east London

- Capital is on lockdown as shopkeepers boarded up businesses early to protect them

- Pubs, businesses and schools sent workers home early

- Prime Minister David Cameron will recall Parliament on Thursday

Sporadic disorder and looting have been reported in Birmingham, Wolverhampton, West Bromwich and Manchester tonight - although police appear to be containing the unrest so far. In Salford, the Central Housing office has been set alight while youths have smashed shop windows and looted businesses.

Fashion retailer Miss Selfridge in Market Street, Manchester has been set on fire and about 100 yobs have looted shops including Foot Asylum in the Arndale Centre. Windows have also been smashed at Marks and Spencer, Patisserie Valerie and Ugg in the city centre. Meanwhile, West Midlands Police said that there was some disorder in Wolverhampton, after yobs gathered in Queen Street, Dudley Street, Wulfruna Street, Princess Street and Market Street shortly after 4.30 pm.

David Cameron this morning warned rioters they would face the 'full force of the law' as shops were boarding up their windows across the capital amid fears of more violence. Businesses, pubs, schools and even medical centres were sending staff home early in a desperate bid to avoid the dramatic scenes that have rocked the capital since Saturday evening. Large swathes of London were on lockdown this afternoon as the city yet again braced itself for a fourth night of feared violence.

It is feared that gangs could descend on a string of town centres to embark on mindless rampages of destruction and looting.

Given the tumult of the Great Recession, this may be hard to believe. But the economy is much weaker than it was at the outset of the last recession in December 2007, with most major measures of economic health - including jobs, incomes, output and industrial production - worse today than they were back then. And growth has been so weak that almost no ground has been recouped, even though a recovery technically started in June 2009.

"It would be disastrous if we entered into a recession at this stage, given that we haven't yet made up for the last recession," said Conrad DeQuadros, senior economist at RDQ Economics. When the last downturn hit, the credit bubble left Americans with lots of fat to cut, but a new one would force families to cut from the bone. Making things worse, policy makers used most of the economic tools at their disposal to combat the last recession, and have few options available.

Anxiety and uncertainty have increased in the last few days after the decision by Standard & Poor's to downgrade the country's credit rating and as Europe continues its desperate attempt to stem its debt crisis. Unlike during the first downturn, there would be few policy remedies available if the economy were to revert back into recession.

Assad's five-month campaign against street protests has emerged as one of the bloodiest episodes of the wave of democratic revolutions sweeping the Arab world this year. Killings have worsened sharply in the past week after Assad ordered tank assaults on two cities.

Other Arab leaders had been cautious about criticizing one of their peers, but Saudi Arabia's King Abdullah broke the silence with a rare intervention overnight, demanding an end to the bloodshed and recalling the Saudi ambassador from Damascus. Hours later Kuwait and Bahrain recalled their envoys too. Syrian tanks and troops poured into the eastern Sunni city of Deir al-Zor in the latest stage of a campaign to crush centers of protest against 41 years of Assad family rule.

Later Monday Assad fired defense minister Ali Habib and replaced him with chief of staff General Daoud Rajha. The state news agency said Habib was ill. Habib had been added to an EU sanctions list last week for his role in crushing protests. Syria's military is effectively under the command of Assad's brother Maher. Many officers are from the Assad family's minority Alawite sect.

The sudden withdrawal of ambassadors of Gulf Arab states leaves Assad with few diplomatic friends. Western states have imposed sanctions on top Syrian officials and countries with close ties to Damascus such as Russia and Turkey have warned Assad he is running out of time.

Then, flanked by dozens of law enforcement and community leaders, he spelled out a substantive (though temporary) change in the city's curfew for two key areas - Center City and University City - on Friday and Saturday nights. Anyone under 18 in those areas must now be off the streets by 9 pm. And when parents come to pick up curfew violators, the mayor said, they'll be told to keep track of the child. "If you don't even bother to pick up your child, we are immediately calling the Department of Human Services, and you can then be taken to court for other violations including neglect of your child," he warned.

The latest 'mob' cut right through the heart of Center City and now the Mayor is promising changes on how the city handles the problem. The sudden, random violence of these mobs we've seen in the city and Upper Darby make them hard to predict and even harder to prevent. In all, 59 people were beaten and briefly hospitalized.

"I'm anxious to see what the Mayor's plan is and see where he takes it from there. Hopefully they can stop them from having this happen again, because it is not something you want to come across," said Center City resident Alex Grace. Police say the group, numbering between 20 and 40, rampaged through Center City around 9 pm. Four people were arrested in connection to Friday's "flash mob." An 11-year-old boy, along with a group of teenagers ranging from 16 to 19 years old were arrested.

Mayor Nutter released a statement Monday saying "We do not tolerate violence by any individuals in our city, and we will continue to respond with the full force or our city's justice system to kids who disrespect their city."

In less than three weeks, there have been 14 major water line breaks in Kemp, but the mayor says things weren't perfect before. "Some of the problem is we've just got some outdated water lines and we do. It's not a surprise to anybody here in the city." With all the pipe bursts, Kemp lost approximately 2,000,000 gallons of water. According to Mayor Kile, workers are busy making repairs and trying to refill the water towers. "We are in the process of getting the water back up and back going by 4 o'clock tomorrow [Tuesday] afternoon," he said.

The mayor went on to stress that getting the water on was the responsibility of the city, keeping it on would require help from residents. "When we get the water back up we are asking everybody to be very conservative with the water," urged Kile. "Don't be foolish with it, because if people are foolish with the water we're gonna be back in the same situation we are in right now and it's just gonna prolong the situation even more."

Chris Williamson, Labour MP for Derby North, suggested the Government's austerity drive was to blame. On Twitter, he said: 'The Tories are back alright. Why is it the Tories never take responsibility for the consequences of their party's disastrous policies. #tottenham' . Minutes earlier he had endorsed the comment of another Twitter user who said: 'Riots. Protests. Cuts. Unemployment. Disaffected Youth. Strikes. Recession. Police Brutality.'

Swift to jump on the bandwagon was Lee Jasper, a former adviser on policing to Ken Livingstone when he was Mayor of London. He blamed the 'economic violence' of the government for the riots and expressed no sympathy for businesses that were smashed up. He claimed some were attacked because they do not help create projects for under-privileged youths and was quoted as asking: 'When did Curry's build a school?' In another interview, Mr Jasper appeared to blame the police for the violence, saying the authorities had failed to take account of the level of suspicion among people in Tottenham when it responded to the death of alleged drug dealer Mark Duggan.

Mr Livingstone and his acolytes came under fire from furious Tories, who pointed out that he of all people should know that vast investment has been piled into Tottenham, Hackney and Lewisham over the last three decades. Mike Freer, Conservative MP for Finchley and Golders Green, said: 'It's complete nonsense. These riots are about vandalism. If Labour politicians want to ride on the back of the rioters in order to obtain some spurious political advantage they should be ashamed of themselves. To the best of my knowledge, we talked about cuts but most of them have not bitten yet. If Labour politicians really believe that, let's have a list of cuts that they think justified people turning to violence. Even the local MP David Lammy has rejected that approach.'

Mark Field, MP for the City and Westminster, added: This is opportunistic criminality. The events in Tottenham need investigating but these copycat riots in Lewisham and Brixton are nothing to do with the cuts. 'It is reprehensible to make any such parallel.'

Meltdown sees ANOTHER 46 billion pounds wiped off shares - and there may be worse to come

- FTSE 100 closes down 178 points or -3.4 per cent

- Total wiped off companies since Friday hits 210 billion pounds

- Dow Jones closes down 5.55 per cent in response to rating downgrade, the fifth-largest daily fall in its history

- Asian markets fall as global shares crisis deepens

- Chancellor Osborne calls France, Germany and America to act but remains on holiday in the US

- US warned it could be downgraded again if aggressive cuts are not made

- European Central Bank set to spend billions on buying Italian and Spanish bonds as it moves to stem sovereign debt

The FTSE sank 178 points to a 13-month low of 5068.95 on another day of panic selling as the bleak mood in the financial markets darkened. It was the seventh session of losses on the trot amid a crisis of confidence in the ability of world leaders to get to grips with the ballooning debt mountain in America and the eurozone. The scale of the catastrophe on global markets was underlined last night in New York where the Dow Jones dropped 635 points or 5.55 per cent in the fifth largest points fall in history.

The biggest drops came after President Obama went on TV to assure the American people that the US remains creditworthy despite the downgrade of its debt by ratings agency Standard & Poor's. 'Markets will rise and fall, but this is the United States of America,' he said. 'No matter what some agency may say, we have always been and always will be a triple-A country.' The fall in share prices on Wall Street so far this month was the steepest August drop in stocks since 1896.

The latest market falls mean that the wealth of every family in Britain has been pillaged. Workers and pensioners have seen the value of their retirement pots plummet and millions of small investors are nursing heavy losses. Experts said the stock market turmoil will hit confidence among households and businesses - and could tip Britain back into recession. Fears are mounting that the global economy is on the verge of a new slump at a time when America and the eurozone are drowning under a tidal wave of debt.

That was despite the fact that hundreds of youths, with no connection to events in Tottenham, had since run riot across the capital. Theresa May, the Home Secretary, Boris Johnson, the Mayor of London, and police have all condemned the youths as "criminals" whose behaviour is "utterly appalling". Yet senior BBC presenters and reporters on the ground yesterday continued to describe those behind the violence as "protesters".

The move sparked a wave of anger from members of the public on Twitter. Duncan Barkes wrote on the micro-blogging website: "Hello BBC. They are not protesters, are they? Rioters better description. I mean, what's the cause for the protest?" Dee Modha said: "This hackney BBC reporter needs to stop calling them protesters. Thugs, hooligans and opportunists are better words."

Jo Suherman added: "Wish the BBC would stop referring to rioters as 'protesters'. For BBC protest synonymous with violence and looting." User Soneni Nkomo accused the corporation of "political correctness", while a user called Craig added: "The BBC are still calling these thugs protesters! The liberal elite cannot see that it's pure criminality."

The BBC was criticised in 2005 when it emerged that an edict was sent around to staff in the wake of the 7/7 terror attacks ordering them not to use the word "terrorist". The guidelines on language said "the word 'terrorist' itself can be a barrier rather than an aid to understanding". The memo was sent within hours of the atrocities, which left 52 innocent people dead, by Helen Boaden, the head of news.

Some local people told journalists of their resentment towards the police. One student said: "The police never talk to us, they ignore us, they don't think we're human in this area." A youth worker claimed: "The way the police treat black people is like we're nothing." And a retired accountant who has lived locally for 30 years reported that some of the police "behave in an arrogant manner that puts people's backs up".

Did the police inflame the initially peaceful crowd protesting about the shooting last Thursday of Mark Duggan? It will be impossible to answer that question until the independent inquiry is complete. But what should we make of another theory, that the police handled the rioters with kid gloves because they were paralysed by fear of being called racist?

Anyone in touch with police leaders will know that most are fully signed-up supporters of the doctrine that the police should use force only as a last resort. As one of the famous "nine principles of policing", published in 1829 at the very founding of the Metropolitan Police, puts it, the police should "use physical force only when the exercise of persuasion, advice and warning is found to be insufficient... and to use only the minimum degree of physical force which is necessary on any particular occasion".

Since the Macpherson report of 1999 the police have been hyper-sensitive about race. This attitude has now become so paradoxical that they find themselves standing aside when members of ethnic minorities are being harmed. The people who ran shops, or who lived in the flats above, were not given the protection they deserved.

Being reluctant to use force can be admirable. But when events have got out of control, the fullest use of police powers is justified. The present generation of police leaders gained promotion by mastering the art of talking about "issues around" racism or bearing down on hate crime "going forward". Learning the management buzz words of the last few years has not produced leaders able to command men in a riot. The injuries sustained by officers show that we have plenty of men and women prepared to be brave when needed, but they are lions led by donkeys who listened a bit too intently to the sociology lectures about "hate crime" at Bramshill police college.