"You're sitting here. And you're — you are laughing. You are laughing about some of these problems. Are people going to look at this and say, 'I mean, he's sitting there just making jokes about money —' How do you deal with — I mean: explain..." Kroft asked at one point.

"Are you punch-drunk?" Kroft said. "No, no. There's gotta be a little gallows humor to get you through the day," Obama said, with a laugh. Obama tried to inject some optimistic notes into the interview, saying he sees "flickers of hope" that the economy is beginning to turn the corner. He got in a few whacks of his own at Wall Street executives who contributed to the meltdown — referring to them ironically at one point as "the best and the brightest" — while being ever-mindful that he still needs their help to dig out of the crisis.

"If we did nothing, you could still have some big problems. There are certain institutions that are so big that if they fail, they bring a lot of other financial institutions down with them. And if all those financial institutions fail all at the same time, then you could see an even more destructive recession and potentially depression," Obama said. "I'm optimistic about that not happening," he quickly added, "because I think we did learn lessons from the Great Depression."

Obama also cited Wall Street's high-risk, high-reward culture as a main cause of the economic meltdown. He took aim at traders and executives in personal terms — saying they need to leave New York for North Dakota or Iowa to appreciate how out-of-whack their pay looks to the average American. "I mean there were a whole bunch of folks who, on paper, if you looked at quarterly reports, were wildly successful, selling derivatives that turned out to be... completely worthless," Obama said, with a chuckle.

He has already reached a deal with far-right leader Avigdor Lieberman and talks are planned with Labour, headed by Ehud Barak, and other small parties. He plans to build a broad based team, or failing that a coalition of right-wing and Jewish nationalist parties

Talks have so far not proved successful with the largest party in the 10 February election - Kadima - which insists Mr Netanyahu sign up to the two-state formula which has underpinned more than 15 years of Israeli-Palestinian peace efforts. Analysts say a right-wing coalition would be more susceptible to political extortion by small hard-line parties.

Last week Mr Netanyahu requested and received approval from President Shimon Peres for a two-week extension to build a national unity coalition. "The creation of such a government is all the more important in view of... the grave [security] threats and economic crisis," the president's office quoted Mr Netanyahu as saying. Mr Netanyahu has said Israel faces "great challenges" including the global economic crisis and what he said was Iran's wish to obtain nuclear weapons.

Informed of the reports yesterday, Pauls told the Irish Times that while he could not recall using "those exact words", he admitted that he had said "something along those lines" at the event. He said, "A second No would have horrific consequences for Ireland and I am not the first to say it. I don't think there is anything particularly new in that."

He also rejected suggestions his remarks could be considered undiplomatic. "They are not. I am simply conveying what my government thinks. That is my job." The paper also reports that Pauls ran into a similar controversy in 2007 when he said in a speech that Ireland's history is "sadder than Poland's".

In E!Sharp magazine, Liberal leader in the European Parliament Graham Watson says that, should the Irish deliver a second No vote, "The sky is not going to fall in. There is technically no reason why the Union should not proceed on the basis of the Treaty of Nice. Although of course then the Irish definitely lose their commissioner - somebody would lose a commissioner anyway."

He stated in one speech, "The corrupt Pope went on a tour in order to cover up the homosexuality of his priests. As you know, he made a tour from America to Australia, saying: 'We are sorry that our priests are paedophiles and homosexuals.' ...He paid three billion dollars in compensation to families whose little children were abused by priests in churches. But nobody sees what the Pope himself does in the Vatican. It's not clear who should apologize for the Pope's deeds."

In another speech, he took aim at the US, stating its values are "sex, violence and melancholy. WE DO NOT WANT TO COEXIST WITH AMERICA. WE WANT TO COMBAT AMERICA – not just America, but Zionism, England, and the leaders of global capitalism, who are exploiting the Muslims and the oppressed throughout the world," said Azghadi.

Speaking about the current economic crisis, Russian Prime Minister Vladimir Putin told the assembled glitterati: "In the 20th century, the Soviet Union made the state's role absolute. In the long run, this made the Soviet economy totally uncompetitive. This lesson cost us dearly. I am sure nobody wants to see it repeated. Nor should we turn a blind eye to the fact that the spirit of free enterprise, including the principle of personal responsibility of business-people, investors, and shareholders for their decisions, is being eroded in the last few months. There is no reason to believe that we can achieve better results by shifting responsibility onto the state."

This is mind-boggling. Putin sounded "more like Barry Goldwater than any Russian leader I ever heard of." But Putin went further, warning against the dangers of military expansionism as a means of solving economic woes. "Unfortunately, we are increasingly hearing the argument that the build-up of military spending could solve today's social and economic problems. The logic is simple enough. Additional military allocations create new jobs. At a glance, this sounds like a good way of fighting the crisis and unemployment."

"This policy might even be quite effective in the short term. But in the longer run, militarization won't solve the problem but will rather quell it temporarily. What it will do is squeeze huge financial and other resources from the economy instead of finding better and wiser uses for them."

A RUSSIAN LEADER NOW TELLING AMERICANS THAT THEIR TURN TOWARD STATISM AND MILITARISM IS HARMFUL BOTH TO THEMSELVES AND TO THE WORLD is a turn of events no one of my generation could possibly have imagined, certainly not anyone who values human liberty. It is a sad and telling commentary that no American leader of any stature, aside from Representative Ron Paul, has the courage to tell us what we need to hear.

Israel fought them off in 1948. And again in 1956. And then again in 1967. And once again in 1973. This strip of land, so coveted by the Arab world, amounts to less than one-sixth of one percent of the Muslim Middle East. While we're on the subject, does anybody remember what it was that spurred the Jews to return to their ancestral homeland in the first place? It was the Holocaust.

The Holocaust wasn't personally perpetrated by Adolf Hitler. Hitler never killed a single Jew. It was perpetrated by the Germans – aided by Frenchmen, Italians, Romanians, Ukrainians, Arabs, et al, while the Allies did their best not to notice. The Palestinian State that the rest of the world insists that Israel owes the Palestinians could have been theirs in 1947. They turned it down in favor of a war of annihilation. The reason that Israel is a pariah nation has absolutely nothing to do with Israeli policies. Israel was a pariah nation before it even had time to formulate national policies. As already noted, long before there was an Israel, the world tried to exterminate the Jews.

The Tribune quoted an unnamed diplomat who told them, "THE ADMINISTRATION IS SENDING A VERY CLEAR MESSAGE TO ISRAEL, AND THIS IS WE WANT TO TALK ABOUT PALESTINE AND NOT IRAN." When an Iranian-made atomic bomb hits the US, they may wish they had never said this. And Israel Today is reporting that the Obama administration is not just cool to Israel. It alleges THAT PRESIDENT OBAMA "IS ABOUT TO BREAK AMERICA'S LONG TIES OF FRIENDSHIP WITH ISRAEL, AND MAYBE EVEN TAKE STEPS TOWARD THE DISSOLUTION OF THE JEWISH STATE." If true, America is in even more serious trouble than even the most pessimistic assessment can reflect. "History teaches us that man learns nothing from history." That doesn't really apply today. This generation doesn't even know history – and the liberal media reports the news counting on that.

The study, conducted as part of the influential EU-funded European Social Survey, will be seen as an INDICATOR OF A SHIFT IN ATTITUDES AND VALUES. Professor David Voas, of Manchester University's Institute for Social Change, who led the project, said the UK was involved in a "long process of disestablishment", WITH CHRISTIANITY GRADUALLY BEING WRITTEN OUT OF LAWS AND POLITICAL INSTITUTIONS.

"CHRISTIAN FAITH WILL SOON HAVE NO ROLE AMONG OUR TRADITIONAL ESTABLISHMENTS OR LAWMAKERS," he said. "It remains to be seen for example, how much longer bishops will be allowed to sit in the House of Lords." He added: "FUZZY FAITH IS A STAGING POST ON THE ROAD TO NON-RELIGION. Adults still have childhood memories of being taken to church, and they maintain a nostalgic affection for Christianity but that is dying out.

"They still go along with the some kind of religious identity but they're not passing it on to the next generation, and people who aren't raised in a religion don't generally start one as adults." While "new wave" religions like Scientology, Kaballah or the Moonie faith, have received considerable media coverage because of their association with Tom Cruise, Madonna and other celebrities, the number of followers remains tiny. The survey, which questioned more than 30,000 people in 22 countries, found only five nations - Slovenia, Sweden, Norway, Holland and Belgium - reported lower levels of church membership than Britain.

PM Gordon Brown issued a warning that the public must remain "vigilant at all times" to the threat from al Qaida terrorists, who he said were "intent on inflicting mass casualties without warning, including through suicide bombings". Writing in The Observer, Mr Brown said: "Today, not only the police and security and intelligence officers and our armed forces, but also the emergency services, local councils, businesses and community groups are involved in state-of-the-art civil contingency planning."

He said there was a "duty on all of us" to stand up to people who advocate violence and preach hate. "Terrorism threatens the rights that all in this country should hold dear, including the most fundamental human right of all - the right to life," he said. "We know that terrorists will keep on trying to strike and that protecting Britain against this threat remains our most important job."

As an aghast world — from China to Chicago and Chihuahua — watches, THE CIRCUS-LIKE US POLITICAL SYSTEM SEEMS TO BE DECLINING INTO NEAR CHAOS. Through it all, stock and financial markets are paralyzed. The more the policy regime does, the worse the outlook gets. The multi-ringed spectacle raises a disturbing question in many minds: IS THIS THE END OF AMERICA?

The AIG bonus firestorm is a diversion from real issues, but it puts the ghastly political classes who make US law on display for what they are: ageing self-serving demagogues who have spent decades warping the US political system for their own ends. We see the system up close, law-making that is riddled with slapdash, incompetence and gamesmanship. America is at risk in other ways, especially in the technical business of setting and executing policy. THE PRESIDENCY OF BARACK OBAMA HAS SET OUT ON A COURSE THAT HAS NO PRECEDENT IN US HISTORY. The Obama administration is different in many ways, NOT LEAST IN ITS SUPREME SELF-CONFIDENCE IN ITS METHODS AND OBJECTIVES.

For the rest of the world, however, the worry is that AMERICA IS AT RISK OF BECOMING THE FOUNTAINHEAD OF A NEW INFLATIONARY OUTBURST. The US dollar is now in decline, gold is moving sharply higher, AND NEW GLOBAL CURRENCY TURMOIL IS ON THE HORIZON. It may not happen. A paper just published by the Federal Reserve Bank of St. Louis says that the Fed will have to be prepared to absorb all the excess money it has poured into the US economy. IT WILL BE A TECHNICAL AND POLITICAL CHALLENGE UNLIKE ANY CENTRAL BANK HAS EVER UNDERTAKEN. THE FUTURE OF AMERICA IS AT STAKE.

Professor Tim Lang said people needed to wake up to how much water farmers and food factories use in producing staple goods, particularly meat, coffee and milk, saying the threat to Britain's food chain from its water footprint is just as great as its carbon footprint. A return to rationing, though "almost unthinkable" in peace time, cannot be ruled out, he warns. While such direct Government intervention would be a very last resort, indirect "editing" of people's diets by supermarkets and central Government is essential, he said.

Professor Lang, who coined the term "food miles" more than a decade ago, now believes that overuse of water is the biggest threat facing Britain's food chain. "Huge amounts of water are being used as irrigation or fed directly to animals. It is a nightmare. Water stress is huge across huge swathes of the globe. We think that we are liberally supplied by God's water. But that's not true."

According to the World Wide Fund, the production of a simple pint of milk uses up more than 550 litres (968 pints) of water – the equivalent of running six full baths. A cut of coffee uses up 140 litres (246 pints), while a hamburger uses an astonishing 1,800 (3,168). These figures take into account the amount of water used from the start to the end of the food chain, including the irrigation on the farm, the processing of the food, such as washing the coffee beans, and the cooking of the product. Meat uses so much because of the water needed to irrigate the crops that end up as animal feed.

"We cannot carry on consuming the same amount of meat and dairy that we do currently. We are convinced about that now. It is absolutely madness." The UK has become the sixth largest net importer of water in the world, the environment group WWF estimates, with every consumer indirectly responsible for the use of thousands of litres a day. Only a third of the UK's total water use comes from its own resources; the rest depends on the water systems of other countries, some of which are already facing serious shortages.

While rationing, as experienced during and after the Second World War, is very unlikely, Professor Lang says supermarkets and the Government will need to "choice edit", the products on sale to reduce shoppers water footprint. "Don't think it doesn't already go on. It is a myth that consumers have free choice," he said, pointing out that food companies frequently change the formula of food to cut out salt or additives – under pressure from campaigners or legislation.

Mr Brown's hopes of unity in London have already been dented by a dispute over the need for more "fiscal stimulus" measures. EU states including France and Germany have given a cool response to British and American calls for more stimulus packages of tax cuts and public spending funded by borrowing.

Jose Manuel Barosso, the president of the European Commission, said despite the rift European and US leaders are at least "converging" on the need for a global standard for financial regulation. But he warned that resistance to more international co-operation on financial rules will come from other countries. "The main problem will come from other countries, like China, for example, that don't have the culture of a common setting of rules," Mr Barosso said at a European Union summit in Brussels.

Lord Malloch Brown, a Foreign Office minister, has said that MR BROWN "CANNOT AFFORD" TO HAVE THE LONDON SUMMIT FAIL, and warned that FINANCIAL MARKETS COULD PLUNGE if the meeting does not unite to produce a substantial recovery plan. The Prime Minister was quick to reject Mr Barosso's talk of Chinese resistance to his plans, insisting that his private talks with Beijing are proving successful.

"Any suggestion that China does not want to see a positive outcome from the G20 discussions is wrong," he said. The London meeting, he said, will produce "very specific and precise" measures to improve the regulation of the financial sector and prevent banks and institutions like hedge funds taking dangerous risks. "The significance of the G20 is that all the major economies are coming together. They all have the same problems. We have a common interest."

At the flick of a switch, the RAF Reaper device's deadly arsenal of laser-guided 500lb bombs and hellfire missiles can destroy an enemy stronghold in seconds. Reaper's array of sensors can detect improvised explosive devices, eavesdrop on mobile phones and monitor Taliban activity in virtually all weathers, by day and night. Unlike other RAF aircraft operating in Afghanistan, however, the Reaper MQ-9 is "flown" from 8,000 miles away in darkened control rooms at the United States' Creech Air Force Base in the desert in Nevada, United States. It is, quite simply, the most risk-free form of combat to have been invented – and it is a growing element of modern warfare.

For the British crews who fly the aircraft, the most dangerous part of their day is the drive between the air-force base and their homes in the suburbs of Las Vegas. "There is no risk to any of my crews at all," said Wing Commander Andy Jeffrey, the head of the RAF's 39 Squadron – the Reaper unit. "But that does not mean they are emotionally detached from what is happening on the ground. When troops are in contact, you can hear the guns firing, and the stress in the voices of the British soldiers [on the ground]. We know the risks they are taking and we know if we make mistakes, lives can be lost. Every day we fly operations over Helmand – flying the Reaper is not a soft option."

Squadron Leader Steve Smith, 40, who previously flew Tornado jets, admits to suffering a "sense of humour failure" when comparisons are made with video games. "I hate the Xbox generation comparison. The Reaper is the size of a Harrier ground-attack aircraft. You need to be an experienced pilot to fly this thing. It's not a high-performance aircraft like a fast jet, you don't get involved in dog fights, but you need to know how the air environment works."

He said: "In the way we deploy weapons you actually see the delivery of the bomb to the bitter end. You see the weapon go all the way and you can see the look on the faces of the enemy as the bomb hits. We can also see the aftermath, so we are definitely emotionally involved."

The Office of the United Nations High Commissioner for Refugees (UNHCR) classifies THE SITUATION IN 26 OF AFGHANISTAN'S 34 PROVINCES AS "INSECURE." But this is not exclusively the doing of terrorists. The world is too quick to lump all those standing in the way of positive development in Afghanistan together under the term "Taliban." In fact, THE TALIBAN IS ONLY ONE OF MANY GROUPS struggling for political and military power in the country.

The radicals of the Hezb-e-Islami militant group are no less active, nor are the Hakkani and al-Qaida terrorist networks any less dangerous. Chechen and Yemeni fighters, possibly diverted from Iraq, are already being picked up in the country. Complicit in their acts of terror are all sorts of criminals, local warlords, tribal leaders and their militias, regional governors and their corrupt police forces, drug barons and their henchmen, who systematically subjugate the people in the regions they control. Murder and murder threats, torture, kidnappings and rape are the tools in this confusing war, one in which clear fronts disappeared long ago, and in which everyone seems to be fighting everyone else.

US generals say that they are seeing a "significant challenge from insurgents" in Wardak, and their commander-in-chief, President Barack Obama, recently responded with a simple "no" to the question of whether the United States and its allies are currently winning the war in Afghanistan.

The news sparked a run on the bank, with many investors queuing to withdraw savings from Northern Rock branches. The government calmed the panic by guaranteeing deposits and in February 2008 was forced to nationalize Northern Rock, which had grown rapidly by lending aggressively to home buyers.

A report by the National Audit Office (NAO), said Northern Rock had continued to write controversial loans for up to 125 percent of a property's value for months after seeking help from the Bank of England. Such high loans, now unobtainable, are widely seen as symptomatic of a housing market bubble before the credit crunch.

Northern Rock's "Together" mortgage included a secured loan of 95 percent of the value of a property together with an unsecured loan, which could be used for any purpose, of up to 30 percent of the property's value. Between September 2007 and February 2008, when Northern Rock was nationalized, more than 1.8 billion pounds of "Together" loans were written, the NAO said.

Sacramento Mayor Kevin Johnson promised to first make alternative shelter space available for the estimated 150 men and women who inhabit the squalid encampment near the American River, at the edge of the city's downtown. Johnson, who toured the area with California Governor Arnold Schwarzenegger a day earlier, said he hoped to have the ramshackle settlement cleared of tents and debris in the next two to three weeks.

"We want to move as quickly as we can," he told a news conference, insisting the city was determined to treat the tent dwellers with compassion. "They are people out there. We have to do whatever we can do," he said. "We as a city are not going to shy away from it. We're going to tackle it head-on."