Airlines canceled hundreds of Sunday flights in the Northeast corridor, with more likely to come as the storm intensifies. Maryland, Virginia and North Carolina declared states of emergency early Sunday or Saturday night. As North Carolina road crews tried to clear snowy and icy highways, Mid-Atlantic officials spent Christmas Day preparing for up to a foot of snow, plunging temperatures and high winds.

"Our concern is tomorrow it's going to get significantly colder," Virginia Governor Bob McDonnell told The Weather Channel on Saturday evening. "Winds with gusts up to 45 miles per hour will cause blowing snow and that's going to cause the worst of it... and we're urging extreme caution in travel. Try to get home early and if you don't have to travel don't go."

A blizzard warning was issued for New York City for Sunday and Monday, with a forecast of 11 to 16 inches of snow and strong winds that will reduce visibility to near zero at times. As much as 18 inches could fall on the New Jersey shore with wind gusts over 40 mph. A blizzard warning was also in effect for Rhode Island and most of eastern Massachusetts including Boston, with forecasters predicting 15 to 20 inches of snow from noon Sunday to 6 pm Monday. A blizzard warning is issued when snow is accompanied by sustained winds or gusts over 35 mph.

Early Sunday, winter storm warnings covered northern Georgia, the Carolinas, Washington, Delaware, New Jersey, Rhode Island, Massachusetts and the eastern sections of Maryland, Virginia, Pennsylvania and New York. Winter weather advisories were in effect for eastern Tennessee and Kentucky, West Virginia and northwest Virginia.

The system gave the Carolinas its first white Christmas in decades. Columbia, South Carolina, had its first significant Christmas snow since weather records were first kept in 1887.

So say public opinion polls that ask Americans how they see the future, their's and their country's. One recent survey, by the respected Pew Research Center, found that depression era Americans were more optimistic about economic recovery in the near future than people questioned in a Pew poll this October, when only 35 percent said they expected better economic conditions in a year's time. In response to a similar question in 1936 and 1937, about half expected general business conditions to improve over the next six months.

The phrase "new normal" was coined by PIMCO, one of the world's biggest investment funds, and is shorthand for an American future that includes lowered living standards, slow growth and high unemployment. Joblessness now stands at 9.8 percent, up from 9.6 percent in October. Add workers who have given up looking for jobs and people forced to work part time and the rate climbs to 17 percent, a powerful reason for declining optimism.

But it's not the only one. A slew of studies, surveys and reports show that a growing number of Americans - some surveys say more than half - no longer believe that their country is a land of unlimited opportunity, where all it takes to rise to success is hard work and determination.

"The end of American optimism," as a headline over an opinion piece in the Wall Street Journal proclaimed this summer, has not quite arrived. But Americans increasingly believe that the rich just get richer and the poor just get poorer. They have good reason to think so. The rich-poor gap in the United States is wider than in any other developed country.

That has rarely been a matter of concern for most Americans but the recession that began in December 2007 turned inequality into a topic of public debate, on occasion with peculiar twists.

In November, a widely-read New York Times columnist, Nicholas Kristof, compared the United States to Latin American banana republics. To see countries where the richest one percent take home more than a fifth of the national income, he said, it was no longer necessary to leave the US.

Two weeks later, he followed up with a column reporting that the comparison had drawn protests from readers who deemed it glib and unfair. Latin Americans thought it hurtful and invidious. After checking into the matter, he came to the conclusion that "I may have wronged the banana republics."

Companies such as Kraft Food and Pepsi and some of the largest US banks benefited, the newspaper said. Most licenses were granted under a law allowing trade in humanitarian goods, even if that ended up including products as diverse as cigarettes and chewing gum. The story posted on the Times' website implies no illegal activity by administration officials or company personnel. Rather, it suggests the various deals for goods ranging from Louisiana hot sauce to body-building supplements undermine America's moral and diplomatic authority as the leading purveyor of tough sanctions on Iran, North Korea and other nations.

The newspaper said one American company was allowed to bid on a pipeline job to help Iran sell natural gas to Europe even though the US opposes such deals. Other American companies were permitted to deal with Iranian firms suspected of involvement in terrorism or weapons proliferation, the Times said.

In response, administration officials said decisions are made on a case-by-case basis and reflect the realities of import chains, which can link some companies unwittingly to others."I haven't seen any licenses that I thought we should have done differently," Adam Szubin, the director of the Treasury's Office of Foreign Assets Control, which grants the licenses, told the Times. But he conceded that US officials weren't fully investigating every importer.

Since then, Nettie Banks, 68, a retired Prichard police and fire dispatcher, has filed for bankruptcy. Alfred Arnold, a 66-year-old retired fire captain, has gone back to work as a shopping mall security guard to try to keep his house. Eddie Ragland, 59, a retired police captain, accepted help from colleagues, bake sales and collection jars after he was shot by a robber, leaving him badly wounded and unable to get to his new job as a police officer at the regional airport.

Far worse was the retired fire marshal who died in June. Like many of the others, he was too young to collect Social Security. "When they found him, he had no electricity and no running water in his house," said David Anders, 58, a retired district fire chief. "He was a proud enough man that he wouldn't accept help."

The situation in Prichard is extremely unusual - the city has sought bankruptcy protection twice - but it proves that the unthinkable can, in fact, sometimes happen. And it stands as a warning to cities like Philadelphia and states like Illinois, whose pension funds are under great strain: if nothing changes, the money eventually does run out, and when that happens, misery and turmoil follow.

It is not just the pensioners who suffer when a pension fund runs dry. If a city tried to follow the law and pay its pensioners with money from its annual operating budget, it would probably have to adopt large tax increases, or make huge service cuts, to come up with the money. Current city workers could find themselves paying into a pension plan that will not be there for their own retirements. In Prichard, some older workers have delayed retiring, since they cannot afford to give up their paychecks if no pension checks will follow.

"This was not funded with earmarks and it was not a study about cow burps," said John Aber, an environmental scientist and provost of the University of New Hampshire. "It's not wasteful," he said. "It's important."

Senator Tom Coburn, Republican for Oklahoma, released on Monday his annual "Wastebook" report, a look at 100 projects that received federal funding which, he says, contributed to record deficits in the past year. Among those projects was a $700,000 grant from the Department of Agriculture to a team of environmental scientists at the University of New Hampshire to study greenhouse gas emissions - the chemicals associated with global warming - in the dairy industry.

Coburn's "Wastebook" quotes one of the project's researchers telling a local New Hampshire paper that "cows emit most of their methane through belching, only a small fraction from flatulence." Scientists at the University of New Hampshire say Coburn has cherry picked quotes and taken things out of context in an effort to undermine their research. They say the project's findings will not only help the environment, but also farmers and businesses involved in the dairy industry.

The pre-Christmas rally has propelled leading US and European shares to their biggest December gains in a decade and pushed London's benchmark FTSE 100 index through the 6,000 level on Thursday for the first time since June 2008. The FTSE All-World index rose to 216.73, up 0.2 per cent, its highest level since September 2008. Even as Fitch downgraded Portugal's sovereign debt, investors voiced optimism that stronger economic growth next year would lead to further gains. More money is pouring into equities than at any time in the last four years.

"We are now at the cusp of a change in expectations among investors, with asset allocators believing equities will return far more next year than credit or fixed income," said Mislav Matejka, equity strategist at JPMorgan. "The key to the rally is that fears of a double-dip global recession have turned around over the past three months."

However, some market analysts voiced caution pointing out that the latest market rally was in thin trading and that the global economic recovery was far from assured. "I've been doing this job long enough to recognise when the markets are entering a new phase of madness that leaves me scratching my head with bemusement," said Albert Edwards, global strategist at Societe Generale, in a recent note. "The notion that we are in a sustainable economic recovery is as ludicrous as it was in 2005-07."

The 50-year-old pilot, who lives outside Sacramento, asked that neither he nor his airline be identified. He has worked for the airline for more than a decade and was deputized by the TSA to carry a gun in the cockpit. He is also a helicopter test pilot in the Army Reserve and flew missions for the United Nations in Macedonia.

Three days after he posted a series of six video clips recorded with a cell phone camera at San Francisco International Airport, four federal air marshals and two sheriff's deputies arrived at his house to confiscate his federally-issued firearm. The pilot recorded that event as well and provided all the video to News10. At the same time as the federal marshals took the pilot's gun, a deputy sheriff asked him to surrender his state-issued permit to carry a concealed weapon. A follow-up letter from the sheriff's department said the CCW permit would be reevaluated following the outcome of the federal investigation.

The YouTube videos, posted November 28, show what the pilot calls the irony of flight crews being forced to go through TSA screening while ground crew who service the aircraft are able to access secure areas simply by swiping a card. "As you can see, airport security is kind of a farce. It's only smoke and mirrors so you people believe there is actually something going on here," the pilot narrates.

Video shot in the cockpit shows a medieval-looking rescue ax available on the flight deck after the pilots have gone through the metal detectors. "I would say a two-foot crash ax looks a lot more formidable than a box cutter," the pilot remarked.

In a day of rising tension, Seoul and Pyongyang traded strong rhetoric, with the South warning of a "powerful response" to any attack from the North. A month ago, the North fired on a Southern island, killing four people. Thursday's speech by Armed Forces Minister Kim Yong-chun marks the strongest statement from Pyongyang since the attack on Yeonpyeong island.

Analysts believe the hard-line stance might be timed to coincide with the 19th anniversary of North Korean leader Kim Jong-il taking control of the armed forces, which will be marked on Friday. "We've heard this language before," said Mr Crowley in an interview with BBC's News-hour. "Unfortunately sometimes that kind of language is followed by irresponsible actions, whether it's a missile test, a nuclear test or the shelling of South Korea, as occurred last month." He added that the North would get no reward for its "provocative actions".

China, the North's only major ally, also issued a statement asking both parties on the peninsula to remain calm.

Pyongyang is frequently accused of sabre-rattling in order to strengthen its hand in negotiations with other countries over its nuclear ambitions. But the North insists that it is the victim, and repeatedly accuses the South of preparing for war by holding military drills on the border.

Kim Yong-chun, quoted by state news agency KCNA, said the North was "getting fully prepared to launch a sacred war of justice", and also threatened to use a "nuclear deterrent". Despite possessing enough plutonium to create a bomb, the North is not thought to have succeeded in building a nuclear weapon.

Negotiations between the BBC and the Vatican went on for many months to enable the recording to take place. Gwyneth Williams, the controller of BBC Radio 4, has said she is "delighted Pope Benedict is sharing his Christmas message with the Radio 4 audience". Catherine Pepinster, the editor of Catholic newspaper The Tablet, said the broadcast was unusual. "This is an unprecedented thing for a Pope to do, to do a script for radio, particularly, you know in a country abroad in a language that is not his own so in that sense it's unprecedented, and I'm very impressed that the BBC persisted so assiduously and got it."

However, the decision has been criticised by the UK's National Secular Society (NSS). Its executive director, Keith Porteous Wood, told BBC Radio 4's Today programme the BBC had made a mistake in inviting the Pope to deliver the message. "I've no problem whatsoever with the message itself, which is a religious message. But I think it's an extraordinarily bad choice for the BBC, and I think it's actually a slap in the face to these tens and hundreds of thousands of child abuse victims."

"I think the problem is that the Pope, and indeed the Vatican, manages - because of its chameleon status between church and state - to kind of move to a position at any moment that accords it maximum power and the least amount of accountability. What we've been having, particularly with the Papal visit and again, indeed, with Thought For The Day, is the Pope pontificating his views and telling us everything and being totally unaccountable for the quite terrible things that the church has been responsible for."

Changes in the jet stream's path can cause massive changes in weather conditions across the globe and may be why Australians are now shivering their way through summer and the current freezing conditions in California. In a normal British winter - when conditions are mild and soggy - the jet stream lies over northern Europe, at an altitude of between 35,000 to 50,000 feet.

During these grey winters, Britain's prevailing winds come from the west and south west, and bring with them warm and moist air from the sub-tropical Atlantic. This year a high-pressure weather system over the Atlantic is blocking the jet stream's normal path and forcing it to the north and south of Europe. The areas of high pressure act like stones in a stream - blocking the normal flow of milder air from the west and instead forcing colder air from the north down across the UK.

In California more than 12 inches of rain has fallen in parts of the Santa Monica Mountains in the south and 13 feet of snow has accumulated at Mammoth Mountain ski resort. And Australians expecting to bask in early summer sun this Christmas are instead shivering as icy gusts sweeping up from the Southern Ocean have blanketed parts of east coast states New South Wales and Victoria with up to four inches of snow.

When the jet-stream is blocked by high pressure it dips southwards and lets freezing air flood in from the Arctic regions.

Experts are still unsure why this is but suspect it may be related to the EL Nino weather system as well as changes in sea temperatures and solar activity.

The drills are one of the largest in South Korea's history, and come a month after North Korea shelled a Southern island killing four people.

The US state department condemned the North's latest comments as returning to its "old belligerent tricks. We need constructive actions, not heated rhetoric," said spokesman Philip Crowley on his Twitter page, without specifying any actions.

South Korean President Lee Myung-bak has promised immediate retaliation to any further Northern attack. The BBC's John Sudworth says people on the Korean peninsula are used to fiery rhetoric from Pyongyang, but as the tension escalates, the danger is that one side will feel forced to act on its threats.

If granted loans from the fund, COUNTRIES WOULD BE REQUIRED TO PROVIDE 120% IN COLLATERAL IN THE FORM OF GOLD RESERVES, STAKES IN COMPANIES, OR REVENUE RIGHTS, the newspaper said. The fund would also be able to buy existing European government bonds, freeing the ECB from this task.

Reuters quotes the Ministry's paper saying that Germany will affirm its "national interest" rests in maintaining the single currency. The Euro, however, must "orientate itself on German stability interests" as a "concession to Germany, as the largest economy in the Euro zone, serving as an anchor of stability." According to Sueddeutsche, the new fund would in principle have access to "unlimited refinancing" in order to secure the health of the single currency.

The Ministry confirmed the existence of the paper but said it had not approved the proposal, nor had the German government.

They hope the campaign will help 'destroy Christmas' in this country and lead to Britons converting to Islam instead.

The placards, which have already appeared in parts of London, feature an apparently festive scene with an image of the Star of Bethlehem over a Christmas tree. But under a banner announcing 'the evils of Christmas' it features a message mocking the song the 12 Days of Christmas.

It reads: 'On the first day of Christmas my true love gave to me an STD (sexually transmitted disease). On the second day debt, on the third rape, the fourth teenage pregnancies and then there was abortion.' According to the posters, Christmas is also to responsible for paganism, domestic violence, homelessness, vandalism, alcohol and drugs.

Another offence of Christmas, it proclaims, is 'claiming God has a son'. The bottom of the poster declares: 'In Islam we are protected from all of these evils. We have marriage, family, honour, dignity, security, rights for man, woman and child.'

Mr Rumaysah, the campaign's organiser, told the Mail that he was unconcerned about offending Christians. He said: 'Christmas is a lie and as Muslims it is our duty to attack it. But our main attack is on the fruits of Christmas, things like alcohol abuse and promiscuity that increase during Christmas and all the other evils these lead to such as abortion, domestic violence and crime. We hope that our campaign will make people realise that Islam is the only way to avoid this and convert.'

Sister Christine Frost, founder of the East London Neighbours in Poplar charity, said: 'The more posters I saw, the more angry I got. Someone is stirring hatred which leaves the road open to revenge attacks or petrol bombs through letter-boxes. I told the Mayor we are all scared. If we said such things about Muslims, we'd all be hanging from lamp-posts.'

And it is a scandal that goes back to 2006, when the Labour government stood idly by while a little-known, family-controlled Spanish construction group called Ferrovial was allowed to buy all of Britain's airports at the knockdown price of 10.3 billion pounds. What's more, the purchase was made despite the firm already having huge debts.

This was just the latest squalid example of a British government selling key parts of this country's infrastructure to foreign buyers. For example, control of our ports passed from one of the nation's great historic companies, P&O, into the hands of Dubai World; and most of our power utilities have been sold to continental giants EDF of France and E.ON of Germany.

The problem with our airports is that the Government is powerless to force the foreign owners to ensure there are the necessary systems to prevent flights being grounded in bad weather. While sensible investment is made in other countries' airports, ministers have been unable to get BAA to buy adequate snow-clearing and de-icing equipment.

Equally culpable is the regulator, the Civil Aviation Authority, which has been supine in its refusal to raise any serious objections over Ferrovial's behaviour.

The truth is that the Spanish owners of BAA and its main asset, Heathrow (with annual passenger numbers of more than 66 million) had no experience of running airports, or indeed consumer-orientated businesses, and was only interested in taking advantage of easy credit conditions in order to make quick profits.

"We hope people are aware that interest rates at some point will go up again and that they will head back to a normalised position," he said. Confirming that "normalised" rates would be "around" 5 per cent, he added: "What we need to do is to trigger the mindset in people that that's where rates will eventually go back to."

Mr Fisher's warning follows a stark Bank research paper indicating that more than 7 million homeowners are at risk of rate rises. Two thirds of mortgage borrowers are currently on variable rates, it found, compared with roughly half in a typical year. On current wages, if rates were at 5 per cent, households would be spending more of their disposable income on debt interest than at any time in the past 20 years, the Bank's analysis showed.

According to separate Bank data, variable rate homeowners are paying interest of 3.28 per cent on average compared with 4.34 per cent for those on fixed rates - equating to a 1,600 pounds annual saving on a 150,000 pounds mortgage. Household debt in the UK is 1.45 trillion pounds, of which 1.2 trillion pounds is mortgage borrowing.