The crisis that started in the US subprime mortgage market spread this year to become a global economic and financial disaster. Governments around the world were forced to bailout some of the most recognisable names in the financial world as the credit markets seized-up and several high-profile companies including Bear Stearns and Lehman Brothers disappeared into history.

The S&P is down more than 40 per cent so far this year, its worst fall since the Great Depression. Most analysts expect that the more than year-long recession will get worse before it gets better and investors are bracing themselves for more pain in 2009.

Bright spots have been few and far between. Even the consumer staples sector is down by almost a fifth this year. The financial sector in particular has been decimated with the S&P Financials index down almost 60 per cent so far this year. Citigroup shares have lost 77 per cent, Morgan Stanley 72 per cent and Goldman Sachs 65 per cent over the course of a year that has redefined the fundamentals of the global financial markets.

Hours after the Pope spoke, Egyptian President Hosni Mubarak and Israeli foreign minister Tzipi Livni met to discuss growing violence between Israel and militants in Gaza. Top of the agenda was the end of the six-month ceasefire in Gaza, which the Egyptians have brokered.

Appealing for new efforts to end the cycle of violence in the Middle East, Pope Benedict urged people to pray that "hearts will be opened, so borders will be opened". The 81-year-old pontiff plans to visit Jordan, Israel and the Palestinian territories next May, although final details of his trip have yet to be worked out.

In his traditional Christmas Day "Urbi et Orbi" speech - Latin for "to the city and to the world" - from the balcony of St Peter's, Pope Benedict is expected to touch on current events and issues of concern to the Vatican.

From New Hampshire to California, the story is the same. More and more families are relying on faith-based groups and the federal government for food. "People think 'hunger' and they think of other countries, but it is right here in your neighborhood," said Caroline Vazquez, director of development for the non-profit Feeding America San Diego.

"EVERYBODY'S LIVES HAVE CHANGED WITH THE ECONOMY GOING DOWN," said Anna Martinez, a resident. In Louisiana, ravaged yet again by hurricanes this year, the number of people on food stamps jumped 234 percent in September compared to a year ago. In other parts of the country, the numbers are better, but still bad. Reliance of food stamps is up 24 percent in Idaho, nearly 24 percent in Florida, and more than 20 percent in Nevada and Texas.

Viktor Zubkov, who is Russian First Deputy Minister as well as Chairman of Gazprom, said: "We cannot rule out that the position of the Ukrainian side and certain steps, which are linked to gas transit through Ukrainian territory, COULD LEAD TO A DISRUPTION OF SUPPLY STABILITY TO EUROPE."

The BBC notes that ministers from the world's major gas-exporting countries have gathered in Moscow to discuss closer co-operation, leading to suggestions that they want to set up an organisation similar to the oil producers' cartel, Opec.

The Mail notes that Russia has also threatened to supply surface-to-air missiles to Iran, despite Western concerns over its nuclear ambitions. Meanwhile, the BBC reports that a bill to extend the presidential term from four to six years has been backed by Russia's upper house of parliament after regional assemblies endorsed it. The article notes that the bill is being seen as a sign Vladimir Putin may return to the presidency soon.

He did not give specific dates for the visit but earlier media reports suggest he could travel to Jordan, Israel and the West Bank in mid-May. He is expected to visit Nazareth and Bethlehem during the trip. While he is there the Pope will also meet the Palestinian Authority President Mahmoud Abbas.

The trip will be his first visit to the Middle East since his election as pontiff in 2005. Monsignor Fuad Twal, a senior Vatican representative in the Holy Land, gave the first official confirmation of the trip during his Christmas message. He said that Pope Benedict would, just like his immediate predecessors, be visiting Jerusalem as a pilgrim.

But after receiving billions in aid from U.S. taxpayers, the nation's largest banks say they can't track exactly how they're spending the money or they simply refuse to discuss it. "We've lent some of it. We've not lent some of it. We've not given any accounting of, 'Here's how we're doing it,'" said Thomas Kelly, a spokesman for JPMorgan Chase, which received $25 billion in emergency bailout money. "We have not disclosed that to the public. We're declining to."

The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions: How much has been spent? What was it spent on? How much is being held in savings, and what's the plan for the rest? None of the banks provided specific answers.

"We're not providing dollar-in, dollar-out tracking," said Barry Koling, a spokesman for Atlanta-based SunTrust Banks Inc, which got $3.5 billion in taxpayer dollars. SOME BANKS SAID THEY SIMPLY DIDN'T KNOW WHERE THE MONEY WAS GOING.

In fact, temperatures over the next month or so are liable to average 6-10 degrees F below normal over the center part of the continent with the northwest coldest last, but still getting into the games. Intuitive with this is the likelihood of more than normal snow and ice. As the upper block backs west, arctic discharges from the north and east are liable to bring shots of severe cold back into England and with it enhanced snowfall.

While it has been "chilly" so far, WHAT IS ABOUT TO COME IS THE WORST IN MANY A WINTER, perhaps the sign that the warm AMO is reaching its maturity. The US winter has been much like those around 1950 which was the benchmark winter in the pac northwest of the US and was the warning shot that the warm cycle of the 30s 40s and 50s was starting its end game. It should be comforting to people worried that we are pushing our planet over the edge that things that happened before are happening again, though the discomfort caused by cold is a big problem.

I wish to point out, with no malice intended, that the two countries who have major scientific organizations that have been pushing the global warming idea, Britain and the UKMET and the US with NOAA have been burned by the cold that has developed here. NOAA had a December forecast for a warm central US for November that they were forced to revise and the UKMET forecast for a rather bland winter for Europe speaks for itself. Its anything but bland, whether it averages out near the average or not, because what is coming has not been seen in years.

The Pope was delivering his end-of-year address to senior Vatican staff. His words, later released to the media, EMPHASISED HIS TOTAL REJECTION OF GENDER THEORY. Pope Benedict XVI warned that gender theory blurs the distinction between male and female and could thus lead to the "self-destruction" of the human race.

Gender theory explores sexual orientation, the roles assigned by society to individuals according to their gender, and how people perceive their biological identity. Gay and transsexual groups, particularly in the United States, promote it as a key to understanding and tolerance, but the pope disagreed.

When the Roman Catholic Church defends God's Creation, "it does not only defend the earth, water and the air... but (it) also protects man from his own destruction," the Pope said. "If tropical forests deserve our protection, humankind... deserves it no less," the 81-year-old pontiff said, calling for "an ecology of the human being." It is not "outmoded metaphysics" to urge respect for the "nature of the human being as man and woman," he told scores of prelates gathered in the Vatican's sumptuous Clementine Hall. The Catholic Church opposes gay marriage. It teaches that while homosexuality is not sinful, homosexual acts are.

The general public will gradually become aware of the long-term aspect of this crisis in the coming three months and this situation will immediately trigger two tendencies carrying with them socio-economic instability: FEAR OF THE FUTURE AND ENHANCED CRITICISM TOWARDS LEADERS.

According to our team, at that period of the year, (March 2009) the general public will become aware of three major destabilizing processes at work in the global economy, ie:

• the length of the crisis
• the explosion of unemployment worldwide
• the risk of sudden collapse of all capital-based pension systems

All the trends described above are already at work. Their combination and the public becoming aware of the consequences they could entail, WILL RESULT IN THE GREAT COLLECTIVE PSYCHOLOGICAL TRAUMA OF SPRING 2009, when everyone will realize that we are all trapped into a crisis worse than in the 1930s and that there is NO POSSIBLE WAY OUT IN THE SHORT-TERM. The impact on the world's collective mentalities of people and policy-makers will be decisive and modify significantly the course of the crisis in its next stage. BASED ON GREATER DISILLUSION AND FEWER BELIEFS, SOCIAL AND POLITICAL INSTABILITY WILL SETTLE DOWN WORLDWIDE.

As a complement to our anticipations of the impact of the US economic recession for banks operating in the US, we find it useful to analyse here how much US official statistics have become totally surrealistic. For all those who cook and publish them, they are no longer meant to describe the reality but to preserve the credibility of a fiction concealing reality. On the other end of the country, the New York Times asks a question "Recession? What recession?", answering to it right after: "If it looks like a recession and feels like a recession..."

Well it is a real recession with massive job losses in nearly every sector, with a general impoverishment of the population because of the housing bubble burst and because of increasingly tighter credit restrictions (8), with a historic fall in house prices (9), with a fast and steady drop of currency value (10), with diminishing fiscal revenues on every level (local, national and federal) (11), with a stagnant household consumption (12)... According to Leap/E2020, OFFICIAL STATISTICS WILL NOT HIDE MUCH LONGER THE REALITY, as figures coming from other sources (companies, foundations, independent research centres...) point in the same direction: the recession is really here!

For large banks operating in the US, and in this field in particular for US banks, this is the fatal factor for their revenues and assets. With consumers and companies trapped in a recession, their entire business model collapses. Wall Street's financial sphere can no longer generate profits by lack of a real economy capable of marking up, by lack of operators capable of reimbursing their loans, by lack of companies capable to develop. Moreover the US Dollar drop will not compensate for this tendency; on the contrary, it will import inflation as explained in previous GEABs; another set of bad news for these banks' financial statements backed by mountains of loans.

"After few years of talks with Russia... now the S-300 system is being delivered to Iran," IRNA quoted Ismail Kosari, deputy head of parliament's Foreign Affairs and National Security committee, as saying. Kosari did not say when the deliveries began and Iran's Foreign Ministry declined to comment on the report. He added that the system would be deployed throughout Iran and would "meaningfully strengthen" the country.

Last week Major-General Amos Gilad, head of the Israeli Defence Ministry's Security-Diplomatic Bureau, visited Moscow and expressed Israel's opposition to the deal. Gilad urged Russia on Friday not to sell the S-300 to Iran. "The deliveries of dangerous armaments to our enemies won't serve the interests of peace and, for instance, can help Iran wipe Israel off the face of earth," Gilad was quoted as saying. "So we expect Russia to demonstrate responsibility on the issue."

The S-300 is a multi-target anti-aircraft-missile system with a reported ability to track up to 100 targets simultaneously while engaging up to 12 at the same time. It has a range of about 200 kilometres and can hit targets at altitudes of 90,000 feet.

Former French Europe Minister Jean-Pierre Jouyet has declared in Libération that, with regards to the Czech Presidency, "France and other countries will take initiatives: no one can prevent member states from meeting, notably at the level of the eurozone."

A leader in the FT argues that "At times of crisis, it certainly helps to have a heavyweight in the EU presidency." It continues, "Thanks to the present system of rotation, however, the Czech Republic must now take the chair. Many in Brussels fear business will grind to a halt." The article concludes that the "[Lisbon] treaty may well have the answer in replacing rotation with a semi-permanent president." Likewise, a leader in Saturday's Guardian argued that the French EU Presidency "has been a success" and that Nicolas Sarkozy "provided the best possible argument for replacing the current rotating presidency with an elected president."

AFP reports that Czech PM Mirek Topolanek said that "The Lisbon Treaty is not expressly one of the priorities of our presidency".

News of the lavish rewards will sicken tens of millions of taxpayers in Britain and the U.S. who are bankrolling a bail-out of the industry. To add insult to injury, it emerged last night that bankers have released a record mocking taxpayers' plight. The single by the City Boyz, available from iTunes, is entitled Credit Crunch Christmas and features the chorus: 'Sorry we ****** up your Christmas, but really we don't give a ****.'

Banks justify their huge bonuses on the grounds that they have to pay their best performers top salaries, or risk seeing them defect to rivals. However, with the banking industry in crisis few major institutions are hiring staff on big wages. Wall Street giant Goldman Sachs, nicknamed 'Goldmine Sachs', has set aside around £1.7billion for year-end bonuses, even though it plunged to a £1.4billion loss in the fourth quarter. The 5,400 bankers who work at its opulent Fleet Street office are likely to receive AVERAGE BONUSES OF OVER £50,000, with many taking home much more. In contrast, the average salary for a British worker is £25,000.

The two frontrunners in the race to become prime minister after a snap election in February both vowed to topple Hamas, which has run Gaza since violently seizing power there in June 2007. Militant rocket and mortar fire continued on Sunday, the Israeli army said, reporting that one person was slightly wounded. A Palestinian medic said a woman had been injured in northern Gaza by shrapnel from a tank shell but the military denied firing in the area.

"ISRAEL MUST TOPPLE THE HAMAS RULE IN GAZA and a government under my command will do just that," Foreign Minister Tzipi Livni, leader of the governing Kadima party, was quoted as saying by Israeli media. "Israel must react when it is fired upon, must re-establish its force of dissuasion and stop the rockets."

Our forecasts are already very dark but they will be even darker if not enough fiscal stimulus is implemented," Dominique Strauss-Kahn told BBC radio. "WE SEE 2009 AS REALLY BEING A BAD YEAR, with recession for most advanced economies and growth decreasing for emerging economies."

The IMF has called for global fiscal stimulus of about two percent of GDP, equivalent to some 1.2 trillion dollars. He added that he feared recent initiatives, including that announced by the G20 in Washington last month, may not go far enough. "I can see that some measures have been announced, but I'm afraid it won't go far enough," he said.

Strauss-Kahn said he understood Germany's "reluctant" attitude to the steps announced by some countries including Britain but added it would be best if all countries act together to "face the recession". "I respect the traditional view of the Germans but nevertheless I think we are at a time when we should be a bit more imaginative than we have been in the past," the French former finance minister said.