In a complex set of transactions, Dubai is moving to acquire 19.9 percent of the Nasdaq in New York, placing the Arab government in an ownership position of the key U.S. stock exchange and raising concerns in Congress. As a result of the transaction, Dubai also will acquire 28 percent of the London Stock Exchange, one of the oldest and largest in the world.

The transaction is being made through Borse Dubai, a holding company 100-percent owned by the government of the Emirate of Dubai and controlled by Mohammed bin Rashid al-Maktoum, the head of the Dubai ruling family.

According to its website, Borse Dubai was created Aug. 6 as the holding company for Dubai Financial Market and Dubai International Financial Exchange in a move to consolidate the Dubai government's two stock exchanges "as well as current investments in other exchanges, expanding Dubai's position as a global capital market hub."

The announcement set off a firestorm of criticism in Washington, prompting President Bush to comment today in a news conference, "We're going to take a good look at it, as to whether or not it has any national security implications involved in the transaction. I'm comfortable with the process to go forward."

A storm moving into the Southland from British Columbia is bringing unseasonably cold temperatures, snow at high elevations and steady precipitation, a welcome sight for many on the heels of a 2006-07 weather year that was the driest on record in Los Angeles.

The cold front arrived in Northern California on Wednesday, months ahead of schedule, bringing temperatures 10 to 15 degrees below normal. Generally, average September temperatures hover at 74 degrees in downtown Los Angeles.

"The storm is pretty unusual. It's pretty much our first winter storm of the season, and it's barely fall," said Oxnard-based meteorologist Edan Lindaman of the National Weather Service. The last measurable rain in downtown Los Angeles was April 22.

Firefighters across Southern California have been hampered by extremely dry conditions. Los Angeles County Fire Department spokesman Tom Richards said rain was welcome during fire season. Rain is "always a benefit," Richards said.

"But on the converse side of that is: Too much rain in fire stricken areas can cause mudslides. Once an area is burned out, it has nothing to hold the soil in place. All the foliage is burned up, so all the moisture sinks right to the soil, which causes it to slide down the hills."

Signs of the plan are everywhere, here are just a few:

a.. FLOOR PLANS AND BLUEPRINTS FOR AMERICAN SCHOOLS have been found in al Qaeda safe houses in Iraq.

B.. OSAMA BIN LADEN RECEIVED RELIGIOUS PERMISSION TO KILL UP TO 2 MILLION AMERICAN CHILDREN.

C.. Chilling al Qaeda video footage showing their operatives TRAINING TO TAKE OVER MOCK AMERICAN SCHOOLS and issuing their commands in English have been uncovered in Afghanistan.

D.. SEVENTEEN SCHOOL BUSES HAVE BEEN STOLEN from the Houston area along with thousands of school bus radios in the Pacific Northwest.

THE LIST GOES ON AND ON, YET MOST AMERICANS KNOW NOTHING ABOUT IT. Sources in law enforcement, the military and intelligence circles think that when the attack comes it will look very much like the horrible school siege of Beslan, Russia -- except that it will happen in multiple schools at the same time across the country for maximum impact.

Experts I have spoken with believe that the attack will most likely happen in America's heartland; at a school where there will be a significant lag time between the 911 call being received and a tactical team getting to the site. It will also likely be at a school where the boys are too small to fight back.

The question I heard the most when I first started talking about this scenario was "why?" WHY WOULD THEY ATTACK THAT WHICH IS MOST PRECIOUS TO US: OUR CHILDREN? DON'T THEY KNOW THAT OUR RESPONSE WOULD BE OVER-WHELMING? YES, THEY DO. AND THAT IS EXACTLY WHAT THEY ARE COUNTING ON.

They want us to attack innocent, peace-loving Muslims in our communities and set fire to each and every mosque we can find. They want that imagery to be used overseas as propaganda, and THEY WANT IT SHOWN ON AL JAZEERA SO THAT 80 MILLION MUSLIMS ARE EXPOSED TO AMERICANS STARTING WHAT WILL INEVITABLY BE POSITIONED AS A HOLY WAR.

The terrorists will not negotiate with us. They are intent upon creating the most disturbing, horrific carnage possible. Even if we could have reached the 9/11 hijackers via radios, there is nothing anyone could have said to make them turn those planes around. It will be the same once they have launched an attack upon our children.

The terrorists have told us loud and clear what they plan to do. Beslan was their playbook. We know they are coming for our children and we know what they intend to do. Feigning ignorance in the aftermath to justify our lack of preparedness will not stand. We must act now, we must prepare -- and it must be for the worst.

(BRAD THOR, A NEW YORK TIMES BESTSELLING AUTHOR AND A FORMER MEMBER OF THE DEPARTMENT OF HOMELAND SECURITY'S RED CELL ANALYTIC PROGRAM.)

Syria's state-run SANA news agency boasted that the nation had already succeeded in putting Israel's nuclear arsenal on the conference's agenda. The item is entitled: "Israeli nuclear capabilities and threat." Iran is not referred to by name on the agenda.

Mervyn King will appear before a cross-party committee of MPs with his credibility on the line after an abrupt reversal of his strategy to quell market turmoil. The change of tactics, which left much of the City open-mouthed, led to angry attacks on his management in the Square Mile and at Westminster.

He was being criticised privately in Whitehall for staying silent as the Northern Rock affair unfolded last weekend, for apparently obstructing a potential rescue of the bank by Lloyds TSB, and for taking an excessively hard line with banks caught in the squeeze.

Some ministers were suggesting that he might not be reappointed for a second five-year term as governor when the present one runs out next year. In the City there were calls for his head as he adopted a policy of intervention that until recently he had resisted. Critics were unmoved. One very senior banker said: "I think Alistair Darling should resign and the Governor should go with him. It's a fiasco".

"At the end of the day, the Bank's only role is to prop up the banking system and give us confidence. But in the last week they've proved that they don't understand the situation at all." Criticism increased as sources close to Northern Rock said that if the Bank had taken yesterday's action several weeks ago - when the US did - the events that led to last week's run need not have taken place. Northern Rock could have continued to operate and fund its obligations, the sources said.

The Abbey loan, the biggest of its type ever offered to UK house buyers, is entirely secured on the property. This means borrowers could lose their home for missing a payment even on the portion of the loan beyond the property's value.

The scheme leaves Abbey open to accusations that it has failed to heed the lessons of the Northern Rock crisis and is snubbing the Government's call for a return to responsible lending. THE DEAL - BEING OFFERED TO FIRST-TIME BUYERS AND OTHERS ACROSS THE COUNTRY IN A PILOT SCHEME - HAS SOUNDED ALARM BELLS AMONG DEBT ADVICE EXPERTS, WHO SAY TAKING IT UP WOULD BE LUNACY.

The mortgage would immediately lock the buyer into huge negative equity --owing more than their property is worth. If property prices fall in some parts of the country over the next year, as many experts predict, this negative equity would balloon still further. In the event of an economic downturn, there is a good chance that some takers would find themselves adding to the 30 per cent rise in home repossessions that the industry reported earlier this year.

THE TIMING OF THE LAUNCH COULD NOT BE WORSE. The troubles of Northern Rock have highlighted concerns about irresponsible lending by banks. Keith Tondeur, director of the debt advice charity Credit Action, said: "There are real dangers. SOMEONE TAKING ON THIS LOAN WOULD HAVE TO BE INCREDIBLY BOLD OR INCREDIBLY STUPID.

Abbey defended the deal, insisting it would be useful to those buyers who need extra cash to furnish a property. A spokesman said the bank carries out personal finance checks on customers to ensure they can afford the repayments.

The spokesman made the remarks during his weekly press conference while commenting on the current visit to the occupied Palestine of the US Secretary of State Condoleezza Rice. Qods Day is held each year on the last Friday of Muslims fasting month of Ramadan after it was nominated by the late Founder of the Islamic Republic, Imam Khomeini, as a day to voice the protest of the Islamic Ummah against the Zionists.

The day falls on October 12 this year.

"The US loses all opportunities to cooperate with regional and other world states by trying to support a regime (the Zionist regime) which is now at its weakest political and social position," Elham said. He warned that Washington's insistence on its wrong policies and arrogant approaches would have no result "but further political disgrace" for itself.

Referring to the approaching World Qods Day, the spokesman stressed, "Supporters of the Zionist regime will definitely receive the final response for their support on that day."

The "enemy entity" designation is in part a legal device to buttress Israel's argument it does not have to fulfil requirements of international humanitarian law to supply electricity and fuel to Gaza. However, a senior United Nations official said cutting electricity would violate international law, and he urged Israel to reconsider its decision.

Israel pulled its troops and settlers out of Gaza two years ago and insists this brought an end to its occupation of the enclave, captured in 1967. But Israel continues to control the area's airspace, coastline and border crossings. The north of Gaza has served as a base for cross-border rocket attacks against Israel. Last week, a rocket wounded 69 soldiers at a military base, and attacks from the strip have disrupted daily life in the border town of Siderot.

Condoleezza Rice, the US secretary of state, speaking at a press conference in Tel Aviv with Tzipi Livni, Israel's foreign minister, voiced understanding for the Israeli decision but avoided questions about its legality. "Hamas is, indeed, a hostile entity in the view of the United States as well," she said. But she went on: "We will not abandon the innocent Palestinians in Gaza and we will continue to try to meet their humanitarian needs."

Ms Livni said: "All the needs of Gaza that are more than humanitarian will not be supplied to the Gaza Strip. We hope Palestinians understand that supporting these terrorists is not going to help them." A Hamas spokesman, said Israel's decision was "a declaration of all-out war for which the occupation [Israel] will bear all consequences in the security, economic and health fields". He predicted the move "will fail in the face of the steadfastness of the Palestinian people".

Most of Gaza's 200MW supply of electricity comes from Israel, and yesterday marked an intensification of Israeli and US policy aimed at turning people against Hamas by making living conditions in the impoverished enclave even more difficult.

A WORLD Bank report this week described the economic situation in Gaza as "acute". Gaza's main border crossings have been closed to all but humanitarian supplies, prompting the suspension of up to 90 per cent of industrial operations. "The impacts will become more difficult to reverse," said the bank. It estimated unemployment could reach 44 per cent.

Despite the embargo, Israeli and outside officials say Hamas has been able to bring in tens of millions of dollars to fund its military and social programmes.

"This is a very dangerous situation for the dollar," said Hans Redeker, currency chief at BNP Paribas. Saudi Arabia has $800bn (£400bn) in their future generation fund, and the entire region has $3,500bn under management. THEY FACE AN INFLATIONARY THREAT AND DO NOT WANT TO IMPORT AN INTEREST RATE POLICY SET FOR THE RECESSIONARY CONDITIONS IN THE UNITED STATES," he said.

The Saudi central bank said today that it would take "appropriate measures" to halt huge capital inflows into the country, but analysts say this policy is unsustainable and will inevitably lead to the collapse of the dollar peg. As a close ally of the US, Riyadh has so far tried to stick to the peg, but the link is now destabilising its own economy.

The Fed's dramatic half point cut to 4.75pc yesterday has already caused a plunge in the world dollar index to a fifteen year low, touching with weakest level ever against the mighty euro at just under $1.40. THERE IS NOW A GROWING DANGER THAT GLOBAL INVESTORS WILL START TO SHUN THE US BOND MARKETS. The latest US government data on foreign holdings released this week show a collapse in purchases of US bonds from $97bn to just $19bn in July, with outright net sales of US Treasuries.

The danger is that this could now accelerate as the yield gap between the United States and the rest of the world narrows rapidly, leaving America starved of foreign capital flows needed to cover its current account deficit -- expected to reach $850bn this year, or 6.5pc of GDP. Mr Redeker said foreign investors have been gradually pulling out of the long-term US debt markets, leaving the dollar dependent on short-term funding. Foreigners have funded 25pc to 30pc of America's credit and short-term paper markets over the last two years.

"They were willing to provide the money when rates were paying nicely, but why bear the risk in these dramatically changed circumstances? We think that a fall in dollar to $1.50 against the euro is not out of the question at all by the first quarter of 2008," he said. "THIS IS NOTHING LIKE THE SITUATION IN 1998 WHEN THE CRISIS WAS IN ASIA, BUT THE US WAS BOOMING. THIS TIME THE US ITSELF IS THE PROBLEM," HE SAID.

For the third time in less than 10 years, the U.S. Federal Reserve suddenly changed the course of monetary policy, slashing borrowing costs by 50 basis points on Tuesday in response to unexpected stresses in the global banking and financial system.

Just six weeks ago it was saying the predominant policy concern was keeping a lid on inflation. The European Central Bank and the Bank of England may not yet have followed suit, but both have effectively put planned rate rises on ice and injected emergency funds into the financial system as a result of the global credit seizure. Traders are now betting on a UK rate cut at least by January.

Analysts say such sudden policy switches are laced with moral hazard that stoke long-term risks in the global system. Some reckon the Fed was left with a stark choice between the half percentage point cut it made in its key lending rates, or the risk that doing nothing could see a major bank failure after six weeks of financial market credit crunch.

The Iranian mission to the U.N. made the request to the New York City Police Department and the Secret Service, which will jointly oversee security during the leader's two-day visit. Mr. Ahmadinejad is scheduled to arrive September 24 to speak to the U.N. General Assembly as the Security Council decides whether to increase sanctions against his country for its uranium enrichment program.

Mr. Kelly said Mr. Ahmadinejad had not indicated why he wants to visit the site of the terrorist attacks of September 11, 2001.

Senior Vatican sources told the BBC the Pope does not normally receive politicians on his annual holiday at the Castelgandolfo residence near Rome. But one leading Italian newspaper said it was an evident snub by the Vatican towards the Bush administration.

Instead of meeting the Pope, Ms Rice had to make do with a telephone conversation with the Vatican's number two, Cardinal Tarcisio Bertone, who was visiting the US during August on other business.

The country's fifth biggest mortgage lender, seen as a probable takeover target since being engulfed by a funding and customer confidence crisis on Friday, may struggle to attract a suitor given damage to its brand, tough capital markets and the stated aims of potential buyers to diversify away from mortgages, industry sources said.

The shares ended down 16 percent at 257 pence, after falling to 246.25 pence, the lowest level since the bank floated almost exactly 10 years ago. THE DROP VALUED THE BANK AT JUST OVER 1 BILLION POUNDS, DOWN 78 PERCENT THIS YEAR.

"I can't see why anyone would pay a big price when they know the trouble Northern Rock is in," said Colin Morton at Rensburg Fund Management, who sold his stake in the bank on Friday. "There is still risk -- this is a company that needs a lot of funding in the wholesale market," he said, adding that the UK housing market also looks like slowing.

The crisis at the bank was sparked on Friday when the Bank of England stepped in with an emergency funding facility, after it was unable to raise funds in wholesale markets.

UK ARGUES FOR A DELAY BEFORE ECJ GIVEN JURISDICTION OVER POLICING AND JUSTICE

According to EU officials, legal discussions on the new version of the EU Constitution on Monday were mired by British demands concerning the new EU powers in justice and home affairs. UK officials argued for A TRANSITIONAL PERIOD BEFORE THE EU'S HIGHEST COURT IS ALLOWED TO HAVE JURISDICTION OVER POLICE AND CRIMINAL JUSTICE. London is asking that the court's power "does not kick in immediately," said an official who noted that London's position had "not gone down wonderfully." Euobserver

EU CLOSE TO APPOINTING NEW ANTI-TERROR CHIEF

EU justice and interior ministers are set to agree on a new EU terror-fighting coordinator to boost member states' commitment to sharing related intelligence on terrorism. According to press reports, the leading candidate is Gilles de Kerchove d'Ousselghem - a Belgian high-ranking EU official working on policing and judicial affairs in the Council. Euobserver

EU CONSIDERS ADDING PROTECTIONIST MEASURES TO ENERGY POLICY

The IHT reports on an internal document from the EU Commission, which warns THAT LIBERALISATION OF EUROPE'S ENERGY MARKET COULD BE TAKEN ADVANTAGE OF BY STATE OWNED COMPANIES SUCH AS RUSSIA'S GAZPROM AND THE ALGERIAN NATIONAL GAS COMPANY SONATRACH, and so undermine the EU's efforts to diversify its energy supply. The report also suggested ways to protect the energy networks. IHT

ROBIN SHEPHERD: FRAGILE BELGIUM IS A LESSON FOR THE EU

Robin Shepherd, Senior Fellow at Chatham House, argues in the FT that "If Belgium does go down it will provide only the latest and starkest reminder of the endurance of ethnic nationalism in modern Europe and the corresponding failure of elitist supra-nationalists to forge larger identities holding any real meaning for ordinary people."

He goes on to argue that "THE FIRST LESSON FOR THE EU SHOULD BE OBVIOUS: FAIL TO SHOW RESPECT FOR CORE NATIONAL IDENTITIES AT YOUR PERIL. IF BELGIUM IS HAVING PROBLEMS HOLDING TWO NATIONAL GROUPS TOGETHER IN A SINGLE STATE, CRASS ATTEMPTS BY DEEP INTEGRATIONISTS TO BIND CLOSELY TOGETHER THE FATE OF 27 MAY END IN TEARS. The greatest long-term danger to the EU may not, therefore, come from the proverbial British eurosceptic banging on about the threat posed by Brussels to the great British sausage. It may come from among its most passionate supporters."
FT FT-Shepherd

A spokesman for Neelie Kroes, the competition commissioner, said the ban on government subsidies to banks could be waived in exceptional circumstances of "systemic risk", but not on a long-term basis. "We're monitoring the situation," he said.

Where there is support, it normally has to be limited to six months' duration and made available on commercial terms. If the duration is more than six months, then it has to be considered as restructuring aid, so restructuring has to take place," he said. EU officials stressed that the competition watchdog had not launched a full-scale probe, and so far appeared satisfied that London had acted within reasonable bounds.

However, the picture could change if Northern Rock or any other lender began to depend on some form of state support, whether in the form of guarantees or direct aid. "This happened at Credit Lyonnais in the 1990s when the bank was robbing market share from competitors," said one EU diplomat.