Already percolating in the riskiest corners of the corporate bond market MAY BE ANOTHER BUBBLE IN THE MAKING. At the bottom of the credit ratings ladder sit debt-laden companies at the highest risk of not making good on their obligations. The average annual default rate for CCC-rated companies is 25 percent, according to Fitch Ratings. At times of stress, that number can soar as high as 40 percent. Yet investors continue to snap up such debt, making CCC-rated debt among the best performers in July, and bringing total returns for the year to an astounding 56.5 percent, according to the Merrill Lynch Master II High Yield Index.

But the magnitude of the snapback in the riskiest part of the high-yield market suggests more than just pricing out Armageddon is at work. Though stimulus programs like "Cash for Clunkers" have prompted a number of economists to ratchet up their growth forecasts for the second half of the year, consumer weakness and rising joblessness make the outlook anything but certain. And then there's the little detail of the government's need to unwind eventually its massive intervention in the credit markets.

Its purchases of Treasuries and mortgage-related debt, coupled with lending facilities and debt guarantee programs, have left the market awash in liquidity meant to ensure that solidly rated businesses and consumers could still access credit. But it has also given risky companies a chance to stay afloat, even if they didn't deserve saving.

"CCCs are outperforming because we postponed defaults," said Jeffrey Rosenberg, head of credit strategy at Banc of America Securities. "THE BIG QUESTION IS, IF WE GOT ALL THIS BENEFIT WHEN THE FED PUT THE LIQUIDITY IN, WHAT'S GOING TO HAPPEN WHEN THEY TAKE IT OUT?" IF HISTORY IS ANY GUIDE, THERE WILL BE THE SOUND OF A POP FOLLOWED BY THE USUAL SHOCK — SHOCK THAT INVESTORS WOULD HAVE TAKEN ON SUCH RISK IN THE FIRST PLACE.

But it has said nothing about an even bigger element of high-frequency trading, known as co-location, even as the New York Stock Exchange (NYSE) is building two new facilities to house such traders. High-frequency trading is a catchall description of several different approaches to stock-trading that capitalize on the blinding speed of supercomputers in analyzing and responding to market data.

The owners of these supercomputers, investment firms such as Goldman Sachs and Citadel Investment in Chicago, employ special proprietary algorithms to interpret the data and execute transactions — all in less time than it takes a human to conjure a thought. ALREADY, VARIOUS FORMS OF HIGH-FREQUENCY TRADING, TAKEN TOGETHER, ACCOUNT FOR MORE THAN HALF OF ALL TRADING NOW TAKING PLACE IN THE US. Critics say the practice can raise the cost of trading for typical investors and contributes to market volatility.

One thing the exchange is not doing is telling the public just who it is that uses the exchange's special access to conduct high-frequency trades. THE NYSE PLANS TO KEEP SECRET THE SMALL GROUP OF INVESTMENT FIRMS that collectively make what could be billions of dollars a year off their special access. And while there has always been some level of special access at the NYSE in the form of trading members who could do more than other firms, the big difference is that that list is public. The NYSE's push to keep the list of firms using co-location services private continues to keep what some consider a shady practice even more in the shadows.

This winners' circle has been dominated by 81 S&P companies with unspectacular credit ratings of "BB" or lower, also categorized as high-yield "junk." The stock prices of these junk-rated companies have jumped on average by between 21 percent and 29.5 percent between July 10 and August 4.

In comparison, investment-grade companies rated "BBB" or above that have seen their shares rise between 9.50 and 19.25 percent, according to data from Bespoke Investment Group, a financial research firm based in Harrison, New York.

Jeff Shacket, vice president of corporate services at Thomson Reuters, added: "It seems to me that if investors are willing to put more money into companies with shaky finances, that's a good sign - not a bad one."

Home price declines will have their biggest impact on prime "conforming" loans that meet underwriting and size guidelines of Fannie Mae and Freddie Mac, the bank said in a report. Prime conforming loans make up two-thirds of mortgages, and are typically less risky because of stringent requirements. "We project THE NEXT PHASE OF THE HOUSING DECLINE WILL HAVE A FAR GREATER IMPACT ON PRIME BORROWERS," Deutsche analysts Karen Weaver and Ying Shen said in the report.

Of prime conforming loans, 41 percent will be "underwater" by the first quarter of 2011, up from 16 percent at the end of the first quarter 2009, it said. Forty-six percent of prime jumbo loans will be larger than their properties' value, up from 29 percent, it said.

Regions suffering the worst negative equity are areas in California, Florida, Arizona, Nevada, Ohio, Michigan, Illinois, Wisconsin, Massachusetts and West Virginia. Las Vegas and parts of Florida and California will see 90 percent or more of their loans underwater by 2011, it added. "FOR MANY, THE HOME HAS MORPHED FROM PIGGY BANK TO ALBATROSS," the analysts said.

After one of the calmest starts to the hurricane season in a decade, the experts from Colorado State University said the development of an EL NINO EFFECT IN THE PACIFIC had caused them to scale back their projections for the Atlantic. The El Nino phenomenon, which involves changes in atmospheric pressure in the southern Pacific, occurs every three to six years, disrupting global weather patterns.

In the Atlantic, El Nino events are associated with decreased levels of hurricane activity, said Philip Klotzbach and William Gray of Colorado State University. "We continue to call for a below-average Atlantic basin tropical cyclone season in 2009. We also anticipate a below-average probability of United States and Caribbean major hurricane landfall," they said. "THIS IS THE QUIETEST START FOR MORE THAN A DECADE. The last time a storm didn't form until August 5 was back in 1992," Klotzbach said.

He added, however, that "a quiet start of the season doesn't necessarily mean that the remainder of the season is going to be quiet. Obviously people in Florida need to be prepared for the hurricane season as every year. 1992 WAS A VERY QUIET HURRICANE SEASON BUT THEN HURRICANE ANDREW FORMED and did... tremendous damage," he said.

The sweeping decision by the owner of titles including The News of the World and The Australian to abandon the practice of giving away news in exchange for attracting a large audience for advertisers could embolden other publishers warily examining paid content models. "We intend to charge for all our news websites," Mr Murdoch said.

"If we're successful, we'll be followed by all media," he added, predicting "significant revenues" from charging for differentiated news online. He warned that "the big competition will be coming from the BBC," which offers online news for free, but said: "Our policy is to win."

In a speech in London, Financial Times Editor Lionel Barber said that within the next 12 months, news agencies will be charging access to their websites. The only thing that will be discussed, according to the editor, is whether they should charge per month or per article or possibly even both.

Federal funds for abortions are now restricted to cases involving rape, incest or danger to the life of the mother. Abortion opponents say those restrictions should carry over to any health insurance sold through a new marketplace envisioned under the legislation, an exchange where people would choose private coverage or the public plan.

Abortion rights supporters say that would have the effect of denying coverage for abortion to millions of women who now have it through workplace insurance and are expected to join the exchange. "We want to see people who have no health insurance get it, but this is a sticking point," said Richard Doerflinger, associate director of pro-life activities for the US Conference of Catholic Bishops. "We don't want health care reform to be the vehicle for mandating abortion. The church can't accept a public plan that covers abortion," he said.

"It's a sham," said Douglas Johnson, legislative director for National Right to Life. "It's a bookkeeping scheme. The plan pays for abortion, and the government subsidizes the plan."

Judge Ian Trigger was told yesterday that a disciplinary inquiry is to look at whether his criticisms of the links between crime, large-scale immigration and the welfare system were 'TOO POLITICAL'. The 65-year-old Crown Court judge, who has also served on immigration tribunals for just over a decade, made his remarks as he jailed an illegal immigrant and drug runner last month.

The official investigation has been ordered by the Lord Chief Justice, Lord Judge, who has the power, along with Justice Secretary Jack Straw, to dismiss judges who speak out of turn. But the decision to put the case before the Office for Judicial Complaints (OJC) was attacked yesterday, WITH SOME CRITICS CLAIMING IT THREATENS THE RIGHT OF ANYONE TO SPEAK OUT ABOUT IMMIGRATION. Sir Andrew Green, chairman of the Migrationwatch pressure group, said: 'There is a great deal of concern, privately expressed, in many parts of the judiciary, about the number of failed asylum-seekers.'

'There ought to be some way in which those concerns can be expressed without infringing judicial guidelines.' Robert Whelan, of the Civitas think-tank, said: 'This reinforces the view that there are certain things that may not be expressed in this country any more. THERE ARE GREAT FEARS FOR FREEDOM OF SPEECH.'

They will be monitored to ensure that children attend school, go to bed on time and eat proper meals. Private security guards will also be sent round to carry out home checks, while parents will be given help to combat drug and alcohol addiction. Around 2,000 families have gone through these Family Intervention Projects so far. But ministers want to target 20,000 more in the next two years, with each costing between £5,000 and £20,000 – a potential total bill of £400million.

Pamela Geller/Atlasshrugs comments:- "GEORGE ORWELL'S 1984 FEATURED TELESCREENS THAT OPERATED AS WINDOWS INTO THE HOMES OF THE SUBJECTS OF THE TOTALITARIAN GOVERNMENT. Privacy had become a thing of the past. The long and the short of it: George Orwell was right — about Great Britian, at least. He just had the date off by a quarter century. One can only wonder how long it will be before the Department of Homeland Security proposes something like that in the United States — to monitor "RIGHTWING EXTREMISM," of course."

The slump is the biggest since the Bank of England's data began in 1997, and shows manufacturing, construction and retail businesses are among the worst hit. The figures confirm what business lobby groups have been saying for months. Firms have increasingly despaired that THE BANKS WILL NOT LISTEN TO THEIR PLEAS FOR FUNDING, with hundreds of businesses going to the wall every week as a result. They have also struggled to access Government schemes such as the Enterprise Finance Guarantee, which was designed to help them through the recession.

The figures show lending has collapsed despite taxpayers pouring billions of pounds into Britain's banks WHILE BANKERS ARE SET TO POCKET A RECORD £4BILLION IN BONUSES, less than a year after bringing the economy to the brink of meltdown. Lenders have also put up their rates despite interest rates being at historically low levels, making it even more difficult for consumers to get mortgages and for businesses to get the loans they need.

Last night, Liberal Democrat Treasury spokesman Vince Cable described the figures as 'scandalous' at a time when several banks 'owe their very survival' to the taxpayer. 'This is clear evidence that many businesses are being starved of credit and are struggling as a result,' he said. 'People will rightly be angry that, while some banks are reporting bumper profits, many businesses continue to suffer as they cannot access affordable loans.'

But the largest slabs of meat on the racks are not beef, lamb or even kangaroo, but camel. Garry Dann, who owns the business, describes camel meat as "beautiful, healthy and organic" and says demand for the product is growing every month. Mr Dann, who sells camel sausages, mince and steaks to restaurants across Australia, is at the forefront of a movement that wants to turn a "camel plague" in the outback into a lucrative and environmentally sustainable industry.

The animals, which now number more than one million, are destroying fragile ecosystems and trampling all over indigenous sacred sites. They foul ancient water holes and chomp through the boughs of endangered native trees. Travelling in large, aggressive packs, they prevent Aboriginal women from venturing into the countryside, for fear of being attacked or trampled.

The situation is expected to get worse, with the camel population predicted to double every eight to 10 years unless action is taken.

Among the green foliage of the healthy spruce are the orange-red needles of the sick and the dead, victims of a beetle infestation closely related to one that has already laid waste to millions of acres (hectares) of pine forest in North America. "THE GRAVITY OF THE SITUATION IS VERY REAL," said Rolf Skar, a forest campaigner with Greenpeace. The plague has cost billions of dollars in lost timber.

In Colorado, aerial surveys show that from 1996 to 2008 Colorado lost almost 2.5 million acres (1 million hectares) of pine forest to the beetle outbreak, Wyoming 677,000 acres and South Dakota 354,000 acres. Over the same period of time, the spruce beetle, which has also ravaged forests as far north as Alaska, took out 374,000 acres of spruce trees in Colorado and 340,000 in Wyoming.

That cumulative total of over 6 million acres (2.5 million hectares) is an area larger than Israel or South Africa's Kruger National Park. Farther north in Canada, the pine beetle has attacked trees over an area of about 39 million acres (14.5 million hectares) in British Columbia since the 1990s.

Israel has the political will and the military muscle to execute an attack against Iran's nuclear facilities. The range may be beyond anything attempted by the Israeli Air Force, but Iran's conventional forces are outdated and defences weak. It is assumed that Arab states, whose airspace Israeli bombers and fighters would have to fly through to reach Iran, would secretly cooperate on a mission to blunt the Persian threat.

THAT IS WHY TEHRAN IS INVESTING SO HEAVILY IN ITS LEBANESE PROXY HEZBOLLAH. The Shia Muslim militia has rebuilt and strengthened its arsenal since the bloody war it fought with the Israelis in 2006. It has amassed tens of thousands of rockets and missiles capable of bombarding half the country.

Israeli planners have no doubt that should they make the fateful decision to attack Iran, they will provoke massive retaliation on an unprecedented scale. The most densely populated areas of the country would come under Hezbollah range, INCLUDING TEL AVIV, HAIFA AND BEN GURION, ISRAEL'S ONLY INTERNATIONAL AIRPORT.

According to Israeli, United Nations and Hezbollah officials, the Shia Muslim militia is today stronger than it was in 2006 when it took on the might of the Israeli army in a war that cost the lives of 1,191 Lebanese and 43 Israeli civilians. Hezbollah has stockpiled up to 40,000 rockets and is training its forces to use ground-to-ground missiles CAPABLE OF HITTING TEL AVIV AND ANTI-AIRCRAFT MISSILES THAT COULD CHALLENGE ISRAEL'S DOMINANCE OF THE SKIES OVER LEBANON.

Brigadier-General Alon Friedman, the deputy head of Israel's Northern Command, told The Times from his headquarters overlooking the Israeli-Lebanese border that the current stability was "in danger". He added that the peace, which has reigned over the rolling Biblical landscape for the past three years, could "EXPLODE AT ANY MINUTE".

His concerns were partly due to threats from Hezbollah's leadership. Last month, Sheikh Hassan Nasrallah, Hezbollah's leader, warned that if the southern suburbs of Beirut were bombed as they were in the last war, he would strike back against Tel Aviv, Israel's largest city. "We have changed the equation that had existed previously," he said. "Now the southern suburbs versus Tel Aviv, and not Beirut versus Tel Aviv."

Circuit Judge Joseph L Boohaker ruled that leaders in Jefferson County — now trying to head off a municipal bankruptcy filing of historic proportions — could go ahead with plans to slash $4.1 million from the budget of Sheriff Mike Hale, who had filed a lawsuit that temporarily blocked spending cuts for his office.

About 1,000 county workers already are on unpaid leave because courts threw out a key county tax, and Hale has warned that reductions to his budget would mean fewer patrols by deputies and decreased courthouse security. A spokesman for Hale, Randy Christian, said the sheriff told Governor Bob Riley after the ruling that state assistance may be needed to perform basic law enforcement tasks once the department's current funding is exhausted in early September.

"We will certainly be looking at calling in the National Guard," said Christian. Hale may have to cut as many as 188 deputies and almost 300 civilian workers out of more than 700 employees total because of Boohaker's ruling, Christian said. That would leave just enough workers to staff the county's two jails, which hold about 1,000 prisoners on average.