OIL PRICES FELL SHARPLY TO AROUND $63 A BARREL Friday amid weakening global demand for crude. OPEC's statement says prices have witnessed a dramatic collapse unprecedented in speed and magnitude. Iran's oil minister said yesterday OPEC should take 2 million barrels a day off the market when it meets. OPEC output is around 29 million barrels a day — about 40 percent of the world's supply.

Just as Americans are finally beginning to reap the benefits of plunging gasoline prices — including more money in their pockets — the 13-nation global oil cartel is getting ready to squeeze them once again by cutting production and driving up prices to refineries. Iran is a traditional OPEC hardliner on prices and production and is the second largest producer within the organization. In contrast, Saudi Arabia which leads OPEC production, is expected to act as the brakes on demands of deep cuts.

"THE ERA OF CHEAP OIL IS FINISHED," Iran's Oil Minister Gholamhossein Nozari boasted earlier this week. When asked what price Iran would want for its oil, Nozari declared, "The more the better." Iran's oil minister told Reuters he would push to cut production by up to 2.5 million barrels per day.

IN SEPTEMBER THE ENTIRE BANKING SYSTEM WAS ON THE BRINK OF TOTAL MELTDOWN, BECAUSE OF SEMI-RATIONAL FEARS THAT ALMOST NO BANK WAS SAFE FROM COLLAPSE. And now we're seeing a massive flight of capital out of economies perceived to have been living beyond their means - either because they have a substantial reliance on foreign borrowings, or because they are net importers of good and services, or both.

Commercial lenders to these economies - banks, hedge funds, mutual funds and so on - want their money back now. That's driving down their currencies, pushing up the cost of borrowing for their respective governments and undermining the strength of their respective banking systems. So they need financial help to tide them over - and with the global economy slowing down, those economies perceived as lacking the resources to cope on their own may need support for months and years.

Queuing up for the intensive care ward are Iceland, Hungary, Pakistan, Ukraine and Belarus, all of which are in discussions about accessing special loans from the International Monetary Fund, the emergency medical service for the global economy. But there has also been a substantial withdrawal of capital from South Africa, Argentina and - most worrying of all - South Korea.

However critics said Mr Greenspan could have boosted regulation of the markets to help prevent the crisis. Committee chairman Henry Waxman, a Democrat, suggested that Mr Greenspan had added to the problem by rejecting calls for the Fed to regulate the sub-prime sector and some complex, risky financial products.

"The list of regulatory mistakes and misjudgements is long," Mr Waxman said. "OUR REGULATORS BECAME ENABLERS RATHER THAN ENFORCERS. THEIR TRUST IN THE WISDOM OF THE MARKETS WAS INFINITE," he added, saying that the mantra became "government regulation is wrong". One of the main criticisms against Mr Greenspan was that he left interest rates too low for too long, thereby fuelling the housing boom - which later turned out to be unsustainable.

South Korea is one of a number of countries that has recently seen a substantial withdrawal of capital as worried investors take their money out. The phenomenon, which is also affecting other nations including Hungary, Iceland and Pakistan, represents a new and worrying phase of the financial crisis according to the BBC's business editor Robert Peston. He says that we are seeing a massive flight of capital out of economies perceived to have been living beyond their means - either because they have a substantial reliance on foreign borrowings or because they are net importers of goods and services, or both.

The House approved the financial rescue plan by a vote of 263-171, sending the measure to President George W. Bush and concluding two weeks of legislative haggling in Congress that had roiled and captivated global markets. Wells Fargo & Co stepped in to buy Wachovia Corp, a bank badly hobbled by the credit crisis, providing a rare bit of positive news for the financial sector and sending markets higher.

In new signs of spreading crisis, California said it was running out of money, France said the world stood on the "edge of the abyss" and European leaders were divided over their own response to the global crisis. Employers slashed payrolls by 159,000 in September, the most in more than five years, a worrisome sign that the economy is hurtling toward a deep recession.

The Labor Department's fresh snapshot, released Friday, also showed that the nation's unemployment rate held steady at 6.1% as hundreds of thousands of people streamed out of the work force for any number of reasons. The reduction in payrolls was much sharper than the 100,000 cuts economists were forecasting. They expected the jobless rate to be unchanged.

The Greek government has issued a blanket guarantee of all bank deposits after panic withdrawals by customers in Athens and Thessaloniki, creating an unstoppable stampede across Europe for an EU-wide bail out of the financial system. Greek officials said the state would cover "all bank deposits, whatever the amount."

The Greek move puts fresh pressure on Germany to back the mounting calls for an EU lifeboat fund to shore up Europe's struggling banks, even though such plans are anathema to Berlin. Chancellor Angela Merkel warned that there would be no "blank cheques" for those who get into trouble. Berlin fears that any such fund is a Trojan Horse that could ultimately leave German taxpayers footing the bill for a massive bail-out of southern Europe as the region's booms turn to bust. Key ministers are now frantically trying to stop the idea gaining a serious head of steam.

The research shows that those who felt that many events were beyond their control were more likely to "see" images that were not there, to believe fictional characters were colluding against each other and to develop superstitions, like having "lucky" clothes. "THE LESS CONTROL PEOPLE HAVE OVER THEIR LIVES, THE MORE LIKELY THEY ARE TO TRY AND REGAIN CONTROL THROUGH MENTAL GYMNASTICS," said Professor Adam Galinsky, from Northwestern University in Illinois, one of the team who carried out the research.

"Feelings of control are so important to people that a lack of control is inherently threatening. While some misperceptions can be bad or lead one astray, they're extremely common and most likely satisfy a deep and enduring psychological need." THE SCIENTISTS BELIEVE THAT THE FINDINGS SHOW THAT PEOPLE TRICK THEMSELVES INTO SEEING OR BELIEVING THINGS THAT ARE NOT REAL BECAUSE OF A SEARCH FOR STRUCTURE TO THEIR LIVES.

The basic urge to limit uncertainty and be able to predict what will happen in the future causes them to rely on figments of their imagination, they claim. "People see false patterns in all types of data, imagining trends in stock markets, seeing faces in static, and detecting conspiracies between acquaintances. This suggests that lacking control leads to a visceral need for order – even imaginary order," said Professor Jennifer Whitson, from the University of Texas, who led the research.

"IT'S EXCITING - RESTORING PEOPLE'S SENSE OF CONTROL NORMALIZED THEIR PERCEPTIONS AND BEHAVIOUR," said Prof Galinsky. The research could even have implications even for the current financial crisis, according to the authors. "On a national level, when times are economically uncertain, superstitions increase," they write.

SOME SEE THIS AS A PIVOTAL MOMENT. The political philosopher John Gray, who recently retired as a professor at the London School of Economics, wrote in the London paper The Observer: "Here is a historic geopolitical shift, in which the balance of power in the world is being altered irrevocably.

"The era of American global leadership, reaching back to the Second World War, is over... The American free-market creed has self-destructed while countries that retained overall control of markets have been vindicated. In a change as far-reaching in its implications as the fall of the Soviet Union, an entire model of government and the economy has collapsed. How symbolic that Chinese astronauts take a spacewalk while the US Treasury Secretary is on his knees."

WITH THE US PRESIDENTIAL ELECTION LOOMING, IT WILL BE WORTH RETURNING TO THIS SUBJECT IN A YEAR'S TIME TO SEE HOW THE WORLD, AND THE AMERICAN PLACE IN IT, LOOKS THEN.

WE ARE LIVING IN AN ERA WITHOUT A SINGLE, DOMINANT WORLD POWER. The globe is beset by crises - climate change, resource scarcity, food and financial crises, nuclear proliferation, and failing states. No one country can devise solutions to address these kinds of problems. Even the United Nations is not up to the task. Indeed, as British Prime Minister Gordon Brown admitted at the Progressive Governance Conference in April in London, the international organizations founded in the wake of World War II no longer meet today's needs.

It was just 17 years ago that the American journalist Charles Krauthammer spoke of the dawning of a new era in which, for decades to come, the United States would serve as the epicenter of the world order. Only five years have passed since then-US Secretary of State Colin Powell told an audience at Davos that America claimed the right to initiate unilateral military action.

Alas, the Iraq war shattered the dream of an age of "liberal imperialism," in which America spreads its values and ideals by coercive means. The financial crisis of the last two years has further accelerated the displacement of power - from the United States and Europe toward India, China, and Russia, as well as the Arabian Gulf states.

Historians define this as one of the critical steps that led to the Great Depression — A TIPPING POINT when the world realized that partisan self-interest had trumped global leadership on Capitol Hill.

It's fair to ask whether America's lawmakers could do it again. The bursting of the debt-fueled property bubble and the crippling losses suffered by banks, together with the political dithering of recent days, have set in motion a chain reaction that, in the worst-case scenario, could lead to something like a 21st century version of the Depression — even if a bailout package does eventually get approved.

THE U.S. — NOT TO MENTION WESTERN EUROPE — IS IN THE GRIP OF A DOWNWARD SPIRAL THAT FINANCIAL EXPERTS CALL DELEVERAGING. Having accumulated debts beyond what's sustainable, households and financial institutions are being forced to reduce them. The pressure to do so results from a decline in the price of the assets they bought with the money they borrowed.

It's a vicious feedback loop. When families and banks tip into bankruptcy, more assets get dumped on the market, driving prices down further and necessitating more deleveraging. This process now has so much momentum that even $700 billion in taxpayers' money may not suffice to stop it.

Ohio Rep. Steven LaTourette said 23 Republican lawmakers will seek an amendment that would lower the amount the Treasury Department could spend on the bailout to $250 billion.

The declines came a day after the Senate overwhelmingly approved the rescue package. The bill now goes to the House of Representatives for an expected vote Friday; House lawmakers stunned investors Monday by rejecting the bailout plan, although Senators added $100 billion in tax breaks and other sweeteners in a bid to win over enough dissenting House votes.

Even if the plan wins approval, oil market traders are skeptical that it will steady the teetering U.S. economy and reverse flagging demand for energy in the world's largest consumer. The plan would remove billions of dollars in bad mortgages and other toxic debt from the books of banks and other financial firms, though critics argue it doesn't go far enough to help ordinary Americans struggling with soaring costs for food and fuel and falling home prices.

"I THINK THE OIL MARKET BELIEVES THAT NO SIZE OF A RESCUE PLAN IS GOING TO BE ENOUGH TO STAVE OFF A RECESSION," said Addison Armstrong, director of market research at Tradition Energy in Stamford, Conn.

"Modern man needs the Church precisely because he is a disoriented man: he doesn't know where he comes from or where he is going," said Archbishop Fisichella. "He continues to wonder about the reason for pain and death." The university rector said the currents of thought in vogue today and the tendency to reduce all questions to matters of science and technology isn't providing the answers man needs.

The Church, on the other hand, is "an expert in humanity, and knows the great questions that are in man's heart," continued the prelate. Archbishop Fisichella said the Church proposes "the question of truth, that is, of the meaning of life. There is no genuine liberty without truth or love," he added. He then made reference to Christ's crucifixion, where he said love "reached its summit."

"We are living, perhaps, through the most critical phase of Western culture," continued Archbishop Fisichella, "in which there is a lack of profound respect for Christianity, which is the very root of Western civilization itself. It is as if a child repudiated his own mother. Given that we make up only one body, the wounds and death of other Christians touch us personally, as if we ourselves were martyred."

The head of the Vatican gendarme, Domenico Giani, announced in a celebration Saturday at Castel Gandolfo that the corps is set to become part of the international force. The Interpol general assembly will confirm the membership when it meets early next month in Russia. At that time, the secretary-general of the governorate of Vatican City State, Bishop Renato Boccardo, will sign the agreement.

Benedict XVI addressed representatives of the corps Saturday, offering a brief greeting in which he expressed his "sincere gratitude for the competence and dedication" with which they serve the Church. Giani also announced that an "agreement of cooperation with Italian police," due to the "upsurge in criminal activity," is being studied, Vatican Radio reported.

As the world held its breath on the fate of America's $700 billion bank bailout plan, President Sarkozy was seeking the backing of European leaders for his own lifeboat.

Mr Brown also faced demands for action from British banks, furious that the Irish Republic's unilateral guarantee of all bank savings on Tuesday was robbing them of precious deposits. The British Bankers' Association, which represents high street banks, said that the move was anti-competitive and that it was raising the issue with Dublin. Some banks would like to see the UK respond with its own explicit guarantee.

Mr Sarkozy, whose country holds the European presidency, is seeking Mr Brown's support before an emergency summit, scheduled tentatively for Saturday, with Silvio Berlusconi, the Italian Prime Minister, and Angela Merkel, the German Chancellor. His proposal was greeted with scepticism in Britain and outright hostility in Germany. It appears to involve the creation of a Europe-wide emergency fund that would be used to prop up banks when national governments are unable to intervene. Ms Merkel said that Germany could not and would not issue a blank cheque for all banks, "regardless of whether they behave in a responsible manner or not".

After an intense weekend of negotiations, the draft of the bailout legislation before Congress had swelled to 42 pages. The following Friday, after almost a week of marathon talks between Treasury Secretary Henry Paulson and key lawmakers in both parties, the working version was up to 102 pages.

It went down to defeat Monday in the House, mostly at the hands of Republicans. Once the Senate was finished adding sweeteners Wednesday to entice reluctant House Republicans to change their minds and vote for the bailout, the bill heading for passage had grown to 451 pages. It was unclear whether it would expand still more as House leaders hunted for the votes needed to clear the bill.

It includes tax breaks for families and businesses, among other measures designed to win over sceptics. The plan will now go before the House of Representatives, which narrowly rejected a similar bill on Monday.

President George W Bush praised Senate leaders for making "vital improvements to the rescue package" and urged the House to approve the measures. News of the Senate vote had little effect on the Asian markets - Japan's main Nikkei index was down by 1.2% in afternoon trading in Tokyo, and Australian stocks had given up 1%.