On the eve of a meeting of G20 leaders in Washington, Mr Bush was to deliver a keynote speech in the heart of New York's Wall Street. According to an advanced copy of his remarks, he appeared to be keen that this weekend's financial summit does not adopt too interventionist an approach to the banking meltdown. "The crisis was not a failure of the free market system and the answer is not to try to reinvent that system," Mr Bush will say. "Government intervention is not a cure-all."

Figures released today showed just what the policymakers are up against. MORE THAN 500,000 AMERICANS LOST THEIR JOBS LAST WEEK, representing the fastest rise in US unemployment since the terrorist attacks of 2001. Around 6.5 per cent of the American workforce are without a job and the new jobless claims data is likely to help propel that rate above 7 per cent by the New Year.

According to official statistics published by Washington's Labour Department, 516,000 Americans filed new claims for unemployment benefit last week, 32,000 more than the week before, and well above Wall Street expectations of 480,000. The numbers, which one Wall Street economist described as "awful" are the latest sign that AMERICA HAS BEEN TAKEN BY SURPRISE AT THE ASTONISHING SPEED THAT THE US RECESSION IS SPREADING ACROSS THE COUNTRY.

Boehner, in a prepared statement, also asked the Federal Reserve to comply with a Freedom of Information Act request seeking details about the loans. The Fed "should comply with this Freedom of Information Act request, and IN THE INTEREST OF FULL AND FAIR DISCLOSURE, THEY MUST BEGIN PROVIDING LAWMAKERS AND TAXPAYERS ALL INFORMATION ABOUT HOW THEY ARE USING FEDERAL TAX DOLLARS," Boehner said.

Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn't require approval by Congress, THERE IS LITTLE DISCLOSURE ABOUT HOW THE PROGRAMS ARE BEING IMPLEMENTED.

Senator John Cornyn of Texas, a member of the Republican leadership, said the lack of disclosure "should trouble taxpayers and policymakers alike. There cannot be accountability in government and in our financial institutions without transparency," he said. "MANY OF THE FINANCIAL PROBLEMS WE ARE FACING TODAY ARE THE DIRECT RESULT OF TOO MUCH SECRECY AND TOO LITTLE ACCOUNTABILITY."

Except these events have happened within the last three years in Ethiopia's Afar region. What's more, a matter of days ago there was more extreme volcanic activity there, with reports of the country's biggest eruption to date – and THE LARGEST RECORDED LAVA FLOW IN SCIENTIFIC HISTORY.

Satellite images show that this latest volcanic explosion spewed out lava across a huge area of 300 sq km, a record of its kind according to researchers. The eruption of molten rock also prompted a minor earthquake – though there were no reported casualties or major damage in the remote area, many of whose inhabitants are nomadic people. The same couldn't be said in 2005, when thousands were displaced by a catastrophic eruption that darkened the skies for days, while lava flows in 2007 forced further evacuations.

The Afar region is one of the hottest and harshest environments in the world. It's renowned for Erta Ale, the name describing both the chain of volcanoes responsible for these geological disturbances and its most active individual peak. One of only four volcanoes on the planet with a lava lake bubbling at its summit, Mount Erta Ale's crater is the popular image of a volcano – a bottomless cauldron of lava extending down into the Earth's mantle.

Scientists are busy studying these ruptures in the Earth's crust at Afar, which sits along the 3000 km-long East African Rift marked by mountain ranges dropping precipitously into deep-lying basins. The magma forcing its way up from thousands of kilometres beneath the surface here is gradually splitting the African continent in two. Be prepared to see more of this part of the world's explosive nature.

The dramatic scale of the cuts - mostly among agency and contract workers - came in a week which has already seen 5,000 jobs go in big businesses. Hi-tech industries have taken the brunt of the downturn, with Virgin Media, Yell and Vodafone all shedding jobs this week. Analysts said today that mass unemployment is now a key threat to the economy, with the total number of jobless increasing rapidly.

According to some predictions as many as three million could be out of work by next year. Dr Gerard Lyons, chief economist and head of global research at Standard Chartered bank, said: 'Clearly there will be more job losses to come. Our guestimate is that unemployment will rise to about 2.5 million. If you're running a company and you've got reduced sales, tighter cashflow and you're pessimistic about the future, of course you are going to shed staff.'

Deflation is sometimes likened to Dante's Inferno. "Abandon all hope" once you step into that Hellfire. We are not there yet but Mervyn King, the Governor of the Bank of England, says it is now "very likely" that the UK retail price index will turn negative next year. This is a drastic reversal of the oil and food spike that played such havoc with monetary policy over the summer. "THE WORLD CHANGED IN SEPTEMBER," said the Governor.

The Bank's fan charts point to zero inflation at current interest rates of 3pc, but the startling new feature is that price falls could gather pace. This is a clear signal that the MONETARY POLICY COMMITTEE WILL CUT RATES AGAIN IN DECEMBER – PERHAPS BY A FULL POINT TO THE HISTORIC LOW OF 2PC, LAST SEEN IN THE GREAT DEPRESSION. Mr King let slip yesterday that there is "obviously" a risk of deflation, although he remains sure it can be averted by a pre-emptive monetary blitz. Let us hope he is right.

THE MODERN WARNING TO US ALL IS THE "LOST DECADE" IN JAPAN, a loose term for the on-again, off-again slump that ultimately led to zero interest rates and – when that failed – to the printing of money. After 18 years, THE NIKKEI STOCK INDEX IS NOW TRADING AT 8,700 – DOWN FROM A PEAK OF NEARLY 40,000. House prices have fallen by half. Yet after all the stimulus, the country is once again tipping back into deflation. Governor King said Britain was likely to avoid this fate. "We've taken action much earlier than was the case in Japan," he said.

Albert Edwards, global strategist at Société Générale, has long warned that CENTRAL BANKS IN THE ANGLO-SAXON COUNTRIES have stored up trouble by stoking credit booms, and may find it harder than they think to engineer a soft-landing. "This could easily go the way of Japan. It is true that Bank of England has moved faster, but Japan was a local bubble. This time it is the 'great unwind' on a global scale with leverage spaghetti everywhere," he said. "THE MONETARY AUTHORITIES DON'T HAVE FOGGIEST IDEA THEMSELVES WHETHER THIS IS GOING TO WORK. THEY'RE CROSSING THEIR FINGERS AND HOPING," HE SAID.

The reasons go deeper than the belief that consumers would shun a vehicle being sold by a bankrupt automaker. Some leading experts said that GM would find it exceedingly difficult to raise the billions in financing it would need to stay in business during a bankruptcy reorganization. The bottom line: Unlike the experience of United, Delta and Northwest airlines, A GM BANKRUPTCY COULD SPELL A QUICK END TO THE COMPANY'S OPERATIONS. The question of whether GM can survive is crucial to the growing debate in Washington over whether the government should put up $25 billion or more to bail out automakers.

Bailout advocates, including President-elect Barack Obama and the Democratic leaders of the House and Senate, argue that the collapse of a major automaker would be too great a shock for an already struggling U.S. economy to absorb. IT IS ESTIMATED THAT A GM BANKRUPTCY ALONE WOULD CASCADE WIDELY THROUGHOUT THE ECONOMY AND COST AS MANY AS 2.5 MILLION JOBS.

Some critics of a bailout have suggested that the automakers would be better off filing for bankruptcy to get out of obligations and contracts they can't afford and become competitive again without putting taxpayer dollars at risk.

As government and industry scrambled to stem the housing crisis, another 84,868 homes were lost to foreclosure in October, according to a report released Thursday. Last month 279,561 STRUGGLING BORROWERS RECEIVED FORECLOSURE FILINGS, including default notices, notices of auction sales and bank repossessions, according to RealtyTrac, an online marketplace for foreclosures. That's a 5% increase from September, and up 25% from October 2007.

"October marks the 34th consecutive month where U.S. foreclosure activity has increased compared to the prior year," said James J. Saccacio, chief executive officer of RealtyTrac, in a statement. "The really sobering reality for us is that despite these various state programs that are artificially keeping the numbers down, we are still up 25% from a year ago," said Rick Sharga, senior vice president of RealtyTrac. Making matters worse is THE RAPIDLY DETERIORATING ECONOMY, says Global Insight economist Pat Newport.

The election of Nir Barkat, a colourful hi-tech tycoon and multimillionaire, promises a change of emphasis in a city which had been controlled by senior figures in the Haredi orthodox community. His victory reflected a strong sense of resentment felt by many secular Jews in the city that their orthodox neighbours enjoyed overly generous tax breaks, housing allowances and other benefits.

But the depth of the divisions in the city were reflected by the failure of his party, Jerusalem Shall Succeed, to win a clear majority as well as a boycott of the poll by the city's 250,000 Arab residents. For his party to rule it will have to forge a coalition, possibly involving orthodox groups.

Mr Barkat's elevation does little to enhance international peace efforts to end the Israeli-Palestinian conflict. With Palestinians demanding control over at least part of the city Mr Barkat belongs to the hardline wing of the opposite camp, REFUSING ANY ARAB CONTROL WHATSOEVER INSISTING JERUSALEM IS AN ENTIRELY JEWISH CITY.

HE THEN WENT ON TO DESCRIBE JERUSALEM AS THE ETERNAL AND UNDIVIDED CAPITAL OF ISRAEL, SOMETHING THAT IS AN ANATHEMA TO PALESTINIANS WHO LAY CLAIM TO AT LEAST PART OF THE CITY.

"The U.S. might really have to look at a default on the bankruptcy reorganization of the present financial system" AND THE BANKRUPTCY OF THE GOVERNMENT IS NOT OUT OF THE REALM OF POSSIBILITY, Hennecke said. "In the United States there is already a funding crisis, and they will have to sell a lot more bonds next year to fund the bailout packages that have already been signed off," Hennecke told CNBC.

In order to solve or stem the economic slowdown, Hennecke suggested THE US WOULD HAVE TO RADICALLY REDUCE SPENDING ACROSS ALL SECTORS AND RECALL ALL ITS TROOPS FROM AROUND THE WORLD. As for a stimulus package, THERE IS NOT MUCH OF AN INDUSTRY LEFT TO STIMULATE BACK INTO LIFE, Hennecke said.

The pound fell below $1.50 to its lowest level for more than six years against the greenback, reaching $1.489 at one point. The rout continued against the euro as the pound breached the 1.20 level to hit a record low of 1.188. The currency's tumble is bad news for holidaymakers but could eventually give some respite to UK exporters facing a sharp slowdown in demand. IN NOVEMBER LAST YEAR - WHEN UK RATES WERE STILL AT 5.75 PER CENT - ONE POUND BOUGHT $2.11. STERLING WAS ALSO TRADING AT 1.40 AGAINST THE EURO.

CMC Markets analyst James Hughes said: 'Anything that points towards yet more cuts at the start of next month will have the potential to heap yet more pressure on the pound.' The BoE's quarterly report showed UK inflation falling to just below 1 per cent in two years, marking a sharp contrast with current consumer prices of 5.2 per cent.

In addition, BoE Governor Mervyn King said THE BANK WOULD BE PREPARED TO CUT RATES AGAIN IF NEEDED after last week's 1.5 per cent interest rate cut that took benchmark rates to three per cent. 'IF YOU ARE A UK POLICYMAKER RIGHT NOW IT'S HARD TO FIND ANYTHING POSITIVE TO TALK ABOUT,' said Audrey-Childe Freeman, senior FX strategist at Brown Brothers Harriman in London.

He warned Britain's economy could shrink by at least 2 per cent during 2009, pushing inflation into negative territory for the first time in almost half a century. A worst-case scenario could see a slump of more than 3 per cent in gross. Former Tory Chancellor Ken Clarke, who led Britain's recovery from Black Wednesday, warned the economy was heading for a 'CATASTROPHIC CRISIS' far worse than 'anything that has occurred in my lifetime'.

The Bank of England yesterday warned there is a 20 per cent chance THE UK COULD SPIRAL INTO DEFLATION in 2010. Deflation is the inverse of inflation, and is seen as one of the worst economic diseases a country can catch. It involves a massive squeeze on lending, which leads to sustained falls in prices on the High Street.

For those with large debts, the consequences are disastrous. During inflation, debts become easier to service over time as the value of money is eroded. But with deflation the opposite happens, resulting in rocketing debt defaults and more trouble for the banking sector. THIS LAST STRUCK THE U.S. AND EUROPEAN ECONOMIES DURING THE GREAT DEPRESSION OF THE 1930S.

According to CreditSights, a research firm in New York and London, THE U.S. GOVERNMENT HAS PUT ITSELF ON THE HOOK FOR SOME $5 TRILLION, SO FAR, in an attempt to arrest a collapse of the financial system. The estimate includes many of the various solutions cooked up by Paulson and his counterparts Ben Bernanke at the Federal Reserve and Sheila Bair at the Federal Deposit Insurance Corp., as the credit crisis continues to plague banks and the broader markets.

The Fed has taken on much of that total, including lending a cumulative $1 trillion in overnight or short-term loans since March to primary dealers through its emergency discount window and making a cumulative $1.8 trillion available through its term auction facility, a series of short-term transactions it began making available twice a month in January. It should be noted that a portion of the funds lent in these programs has been repaid and that the totals represent what has been made available.

David Hendler, an analyst at CreditSights, says it looks as if government is left holding the bag, and of course that translates into everyone. "THE LOSSES HAVE TO BE TAKEN, BUT NO ONE WANTS TO TAKE THEM," Hendler said at a conference Wednesday, speaking about the banks and their handling of troubled assets. "IT SEEMS LIKE THE TAXPAYERS ARE GOING TO BE TAKING A GOOD PORTION OF THAT."

The price of insuring Russian debt soared as credit market sentiment turned dramatically against Russia and some of its leading companies. RUSSIA'S RTS STOCK EXCHANGE INDEX FELL 12.5 PER CENT IN THE FIRST THREE HOURS OF THE SESSION BEFORE TRADING WAS SUSPENDED FOR THE REST OF THE DAY. Trading was halted on the more liquid Micex stock exchange on Tuesday following a steep slide and it remained closed on Wednesday. Both exchanges are scheduled to reopen on Thursday.

Finance Minister Alexei Kudrin told Russia's upper house of parliament that the government would be announcing more measures to support the economy, on top of a $200bn bail-out plan already announced. "You will see more support measures for the economy this week. I think we will need to work hard for at least another year," he said. The Russian economy has been badly hit by the falling price of oil, Russia's chief export, which has caused a loss of confidence in the rouble.

The Dow Jones industrials dropped more than 410 points, and all the major indexes lost more than 4 percent. THE STOCK MARKET HAS LOST ABOUT $1 TRILLION OVER THE PAST THREE DAYS, according to the Dow Jones Wilshire 5000 index, which reflects the value of nearly all U.S. stocks.

"THERE JUST DOESN'T APPEAR TO BE AN END IN SIGHT TO THE BAD NEWS," said Anton Schutz, portfolio manager of the Burnham Financial Industries Fund and the Burnham Financial Services Fund. "THE SELLING IS RELENTLESS."

Overseas, Japan's Nikkei closed down 1.29 percent and Hong Kong Hang Seng fell 0.73 percent. In Europe, London's FTSE 100 fell 1.52 percent, Germany's DAX fell 2.96 percent, and France's CAC-40 dropped 3.07 percent.

A "tall black man" commanding "the strongest army on earth" will take power "in the west." He will carry "a clear sign" from the third imam, Hussein. Ali says of the tall black man: "Shiites should have no doubt that he is with us." Barack Hussein in Arabic means "the blessing of Hussein." In Persian, Obama translates as "He [is] with us." Thus does the name of the presumptive American president-elect, when combined with his physical attributes and geography, SUGGEST THAT THE END OF TIMES IS NIGH – precisely what Iranian president Mahmoud Ahmadinejad has been predicting.

Back down on earth, the Muslim reaction to Obama's victory is more mixed than one might expect. American Islamists are delighted; an umbrella group, the American Muslim Taskforce on Civil Rights and Election, opined that, with Obama's election, "Our nation has … risen to new majestic heights."

Hamas, and Islamist movements in Egypt, Jordan, Iraq, India, Indonesia and the Philippines delighted in Obama's election. Robert Spencer of Jihad Watch generalizes that jihadists and Islamic supremacists worldwide showed "unalloyed joy." The New York Times finds public reaction in the Middle East mostly "EUPHORIC." John Esposito of Georgetown University emphasizes the Muslim world's welcome to Obama as an "INTERNATIONALIST PRESIDENT."

Iran's hardliners also favored a McCain victory (according to Iran's former Vice President Mohammad Ali Abtahi) "BECAUSE THEY BENEFIT MORE FROM ENMITY WITH THE U.S., which allows them to rally the Islamic world behind their policies and at the same time suppress dissent at home."