The annual shindig of the World Economic Forum in the Swiss Alpine ski resort assembled the corporate and political elites of the West - and those from the developing and former socialist worlds who were ready to accept their tutelage - TO PLOT THE FUTURE OF GLOBALIZATION. The free market had become the uncontested economic model, free trade was the order of the day and dot-com visionaries promised that stock market exuberance was no longer irrational. THE FUTURE SEEMED TO BELONG TO WHAT SAMUEL HUNTINGTON DUBBED "DAVOS MAN."

The fact that this year's gathering opened under the cloud of a PRECIPITOUS GLOBAL STOCK MARKET SLIDE AND CREEPING RECESSION may be symbolically apt, but it is not the only reason for the absence of triumphalist illusions at Davos 2008. The markets are telling us that the U.S. economy, and all whose wagons are hitched to it, are in for SOME VERY NASTY TIMES WHOSE DEPTH AND DURATION NOBODY CAN PREDICT. And the stalled global talks on extending free trade (the "Doha Round," which began seven years ago and remains unfinished) are a further sign that faith in free markets has its limits. But even outside of his immediate economic woes, IT HAS BECOME INCREASINGLY CLEAR THAT DAVOS MAN'S AUTHORITY IS IN DECLINE.

The choice of the event's opening and closing speakers - respectively, SECRETARY OF STATE CONDOLEEZZA RICE AND FORMER BRITISH PRIME MINISTER TONY BLAIR - suggests that Davos Man is either out of touch, or else in a state of melancholic denial. For one thing, Rice and Blair arguably bear substantial personal responsibility for the catastrophic policies that have exacerbated the violent chaos spanning an "arc of instability" from Palestine to Pakistan. THEIR TRACK RECORD ALONE SUGGESTS THAT NEITHER HAS MUCH NEW, OR INTERESTING, TO OFFER IN A DISCUSSION ABOUT MANAGING AN INCREASINGLY DANGEROUS WORLD.

The decline of Davos Man is not simply related to a credit crunch or a U.S. election year. In the years during which the U.S. became distracted by the "global war on terror," China's economy has grown to twice the size it was when President Bush first took office. IT IS TO CHINA - GUARANTOR, BY VIRTUE OF THE TRILLION DOLLARS AND GROWING LINE OF CREDIT IT MAKES AVAILABLE TO THE AMERICAN CONSUMER, OF THE AMERICAN WAY OF LIFE - THAT U.S. INVESTMENT BANKS TURN FOR HELP WHEN CONFRONTED BY THEIR LOSSES IN THE SUBPRIME LOAN CRISIS.

Today, market analysts contemplate whether the best hope for the global economy avoiding being dragged into the vortex of recession by the U.S. - slowdown may be THE "DECOUPLING" FROM THE U.S. ECONOMY that some believe could allow economies such as China and India to continue growing by virtue of momentum in their own economies. CHINA HAS ALREADY BECOME THE KEY TRADING AND INVESTMENT PARTNER IN BOTH AFRICA AND IN SOME KEY LATIN AMERICAN COUNTRIES, offering a model of development quite different from the "Washington consensus" on issues of governance and economic management that might, as easily, have been dubbed THE "DAVOS CONSENSUS."

CHINA IS CERTAINLY NOT GOING TO TAKE DIRECTION FROM ITS DEBTORS, AND GLOBAL ENERGY PRICES HAVE TRANSFORMED RUSSIA FROM OBEDIENT SUPPLICANT TO SWAGGERING CHALLENGER TO THE WEST.

THE U.S. AND ITS ALLIES REMAIN IMMENSELY POWERFUL, but the limits of their ability to influence events have been laid bare in Iraq. Today, long-term traditional U.S. allies in Asia, Africa, Latin America, the Middle East and Europe can no longer be counted on to follow Washington's lead. At the same time, the Davos crowd has lost its near-monopoly on global political and economic power, which is increasingly being diffused across a variety of different power centers with shifting alliances.

French foreign policy intellectuals of the 1990s, fearful of what they called the American "hyperpower," fantasized about a "MULTIPOLAR WORLD" where power was balanced across a variety of different power centers and interests. WHILE ECONOMIC "DECOUPLING" REMAINS AN UNTESTED HYPOTHESIS, GEOPOLITICAL "MULTIPOLARITY" IS TODAY INCREASINGLY PLAIN TO SEE. And nowhere more so than at Davos.

The violence, and a denial by opposition leader Raila Odinga that he would agree to serve as prime minister under President Mwai Kibaki, followed the first meeting between the two rivals since a disputed Dec. 27 election triggered a political crisis.

"Nakuru town has been shut down - hundreds are injured in hospital," Kenya Red Cross head Abbas Gullet said. About 700 people have died in violence since Kibaki was re-elected in polls observers say were flawed and Odinga and his Orange Democratic Movement (ODM) say were rigged. The turmoil has also made 250,000 people homeless and damaged one of Africa's most promising economies.

The Kibaki-Raila meeting had been applauded around the world, including in statements from the European Union and U.S. presidential candidate Barack Obama. But diplomats expressed concern for the future of the mediation process. In an interview with Reuters on Friday, Odinga ruled out taking the post of prime minister in Kibaki's government -- a solution some media and diplomats had touted. He said the only three acceptable options would be Kibaki's resignation, a vote re-run, or power-sharing followed by a new election.

COMMITTEE CHAIRMAN JOHN McFALL
"Our report has been unanimously agreed. It recommends a radical shake-up at both the Bank of England and the Financial Services Authority. Both have been found wanting with regard to financial stability."

FINANCIAL SERVICES AUTHORITY
"As we have already acknowledged publicly, there were clearly supervisory failings in relation to Northern Rock and we are already addressing these."

SHADOW CHANCELLOR GEORGE OSBORNE
"This Labour-dominated Treasury Select Committee accuses the Chancellor of a serious error of judgement over Northern Rock, sets out yet more evidence of damaging dithering and attacks his lack of leadership. Thanks to his economic incompetence over Northern Rock, Alistair Darling's credibility is in shreds."

LIBERAL DEMOCRAT TREASURY SPOKESMAN VINCE CABLE
"Northern Rock's managers behaved like a bunch of cowboys and the FSA did nothing to rein them in, or even appear to see there was a problem."

COMMITTEE CHAIRMAN JOHN McFALL
"Planning must begin immediately so that on any future [banking crisis] occasion, it is known who will speak for the authorities and that their message is clear and reassuring. A strong co-ordinating influence from one office will surely help with this."

European regulators are investigating the "sudden and unexpected" deaths of the women who received Gardasil, one of two jabs to protect against cervical cancer licensed for use in the UK. The European Medicines Agency (EMEA) said one of the young women who received Gardasil died in Germany while the other was in Austria. It has not released their ages.

It follows the deaths of three young women aged 12, 19 and 22 who were reported to have died in the U.S. days after Gardasil was administered, with 1,700 patients suffering "adverse reactions". There were no previous recorded deaths in Europe. Gardasil, made by Merck, is one of the jabs to be used initially. The other is Cervarix, made by Glaxo-SmithKline.

Dr Nicholas Kitchin, medical director at Sanofi Pasteur MSD, which markets Gardasil, said: "The authorities in the two countries have looked intensively at these two cases and have not established a causal link, and this has been endorsed by the EMEA. The fact that the EMEA is not taking any action on the back of this should be seen as reassuring that the product remains safe."

A monoline insurer is in the business of insuring bonds, offering investors a way of recouping their cash should their bonds turn sour. For most of the past 30 years, that's meant backing relatively safe bets: rock solid bonds, for example, issued by municipal governments in the U.S. to help put up new schools or hospitals. But recently, the monolines have upped the ante. Lured by the prospect of greater rewards (though surely not the greater risk), they've taken to guaranteeing debt backed up by fancy new financial products engineered on Wall Street, not Main Street. Caught up in the collapse of the sub-prime market, the value of many of those products has dived. So for the investors left exposed, monolines are the backstop.

Right now, that's an expensive place to be. New York-based Ambac and MBIA, the two largest monoline insurers, each cover roughly $60 billion worth of investments backed by assets caught up in the sub-prime snafu. That's only about a tenth of their individual portfolios, but enough to give credit rating agencies a clear case of the jitters. Concern that Ambac didn't have enough capital to protect it against losses prompted Fitch, one such agency, to last week downgrade Ambac's rating from AAA to AA. Rival agencies Moody's and Standard & Poor's have put both Ambac and MBIA on watch.

For financial markets already in a tailspin, that's a worry. A bond's rating is linked to that of the guarantor so a downgrade at Ambac gets passed along to all the debt it's underwriting. That could force many investors ? the kind, such as pension funds, restricted to only bonds with the top-notch AAA rating ? to dump them on the market, pushing down their price and subsequently cranking up those investors' losses. That'll add insult to injury: the sub-prime collapse has already triggered bumper write-downs of some $130 billion. Keen to avoid even more market mayhem, regulators are urging Wall Street to bail out the bond insurers.

Pakistan is a staunch ally in the U.S.-led war on terrorism but deteriorating security and political turmoil has raised international concern about the safety of its nuclear weapons. General Ashfaq Kayani, who became army chief in November when Pervez Musharraf stepped down to become a civilian president, rejected the worry as "unrealistic".

Speaking at the test-firing of a medium-range Shaheen-1 (Hatf-IV) ballistic missile, he said such concerns were based on a "lack of understanding of Pakistan's command and control mechanisms". He said the Pakistani armed forces were a highly professional, motivated and well-trained force and were capable of safeguarding and securing nuclear assets against all categories of threat, the military said in a statement.

Pakistan carried out nuclear tests in May 1998, days after its old rival India conducted tests. Kayani said Pakistan had developed a strong nuclear deterrence capability but it did not harbor aggressive designs against anyone. "Pakistan's nuclear capability was solely for the purpose of deterring all types of aggression," he was cited as saying.

Speaking at the World Economic Forum in Davos, Mr Brown said bodies like the World Bank were set up decades ago, and not designed for the problems of 2008. He added that more transparency was needed to ensure market stability. But he said "heavy-handed regulation" and protectionism were not the solution to recent market volatility.

"There is a recognition that we need global institutions where we have global capital," said Mr Brown. In fact, he said, there was a need for more globalisation not less, to reflect the changes in the way the world financial markets operate. While the economy has become largely global, many regulatory bodies remain national - and are therefore not suited to solving world financial matters.

To avoid a repeat of the recent credit crunch there needed to be an early warning mechanism to highlight problems, he argued. He also said that, as financial markets are increasingly interlinked, there was a need for effective crisis management between nations. Mr Brown reiterated his support of free trade adding: "The challenge is to show we can make the world trade talks move forward."

Violence also flared in the occupied West Bank where two Palestinians and an Israeli border policeman were shot dead on Thursday. Israel's deputy defense minister said the Jewish state wanted to cut its links with the Hamas-controlled Gaza Strip after militants blasted open the territory's border fence with Egypt. U.S. Secretary of State Condoleezza Rice said it was up to Egypt to ensure the security of its border with Gaza. "It's a difficult situation for them, but it is an international border. It needs to be protected and I believe that Egypt understands the importance of doing that," she said.

Washington said it was willing to work with Egyptian authorities to restore order but did not give details. Early on Friday, two separate Israeli air strikes on cars killed at least four Palestinian militants in Rafah, Gaza security officials and medical staff said. Jewish settlers shot dead two Palestinians and gunmen killed an Israeli border policeman in two separate incidents in the occupied West Bank on Thursday night in areas which have remained relatively calm for a month.

The group hopes eventually to use engineered genomes to make organisms that can produce clean fuels and take carbon dioxide out of the atmosphere. Publication of the research gives others the chance to scrutinise it. Some have ethical concerns. These critics have been calling for several years now for a debate on the risks of creating "artificial life" in a test tube.

But Dr Hamilton Smith, who was part of the Science study, said the team regarded its lab-made genome - a laboratory copy of the DNA used by the bacterium Mycoplasma genitalium - as a step towards synthetic, rather than artificial, life. He told BBC News: "We like to distinguish synthetic life from artificial life. "With synthetic life, we're re-designing the cell chromosomes; we're not creating a whole new artificial life system."

Dr Simon Woods, a bio-ethicist at the Policy, Ethics and Life Sciences Research Centre at the University of Newcastle, UK, said scientists were acting in a regulatory vacuum. "On the one hand it's an amazing piece of science but the real concern is that it's another example of science delving into matters that have potentially dangerous consequences," he said. "It's not necessarily going to stay in the hands of well-intentioned scientists."

The talks in Nairobi were mediated by former UN chief Kofi Annan, who said some first steps had been taken towards a peaceful solution to the crisis. Weeks of violence followed the election results, which Mr Odinga has rejected. After the talks, his party condemned a statement by Mr Kibaki in which he said he was the "duly elected president".

Meanwhile, Human Rights Watch issued a report accusing opposition officials of helping to organise ethnic violence in the Rift Valley region, in which hundreds of Mr Kibaki's Kikuyu community were deliberately targeted and killed. The unrest triggered by the election on 27 December has left more than 650 people dead and driven 250,000 from their homes.

Both men shook hands with broad smiles and expressed their commitment to peace and asked their supporters to maintain calm as they continued the newly established dialogue. "We have taken the first vital steps in resolving electoral disputes," Mr Odinga said. "I pledge to all Kenyans that my team and I will spare no effort to resolve this crisis," he added. "We are ready to walk the extra mile if that will enable Kenyans to get peace." Mr Kibaki also welcomed the talks and insisted he was committed to dialogue.

Scientists say they have been amazed by the ferocity of the gigantic flares exploding on the solar surface. The past 24 hours have seen three major events erupt over our star, hurling billions of tonnes of superhot gas into space - some of it directed at Earth. Researchers are once more predicting colourful displays of aurorae - polar lights - when the charged particles from the Sun crash into our atmosphere.

The Earth's changing magnetic field in such a storm can cause power grid and satellite problems. Japanese engineers believe that one of their satellites failed last week because of one such storm. Some experts are saying that the Sun is more active than it has been in living memory.

Dr Paal Brekke, deputy project scientist for the Solar Heliospheric Observatory (Soho) Sun-monitoring satellite, told BBC News Online: "It is quite amazing that the flaring regions continue releasing such strong flares. I think the last week will go into the history books as one of the most dramatic solar activity periods we have seen in modern times. As far as I know there has been nothing like this before." Skywatchers will be looking out for spectacular lights in the night sky.

In his message for the Catholic Church's World Communications Day, Benedict said that while the media did much good, it was also often used for ideological reasons and tried to create reality rather than report it. "When communication loses its ethical underpinning and eludes society's control, it ends up no longer taking into account the centrality and inviolable dignity of the human person," he said in the three-page message.

"For this reason it is essential that social communications should assiduously defend the person and fully respect human dignity. Many people now think there is a need, in this sphere, for 'info-ethics', just as we have bioethics in the field of medicine and in scientific research linked to life," he said. The media, he said, often risked being transformed into what he called "systems aimed at subjecting humanity to agendas dictated by the dominant interests of the day".

Under Benedict and his predecessor John Paul, the Vatican has often accused the media of promoting consumerism and elements of lifestyles that it considers unethical, such as pre-marital sex and homosexuality.
"While claiming to represent reality, it can tend to legitimise or impose distorted models of personal, family or social life," Benedict said. "Moreover, in order to attract listeners and increase the size of audiences, it does not hesitate at times to have recourse to vulgarity and violence, and to overstep the mark," he said. Proper use of the media, including the Internet, was emerging as a key challenge of the third millennium, he said.

Mr Prodi, who had led his centre-left coalition for 20 months, was defeated by five votes, despite the support of several unelected lifetime senators. President Giorgio Napolitano must now choose whether to call a snap election or appoint an interim government. Mr Prodi has been asked to continue in a caretaker capacity until then. Correspondents say the centre-right opposition alliance led by the former Prime Minister, Silvio Berlusconi, is regarded as well placed to win an early election.

La Stampa, a newspaper, said that the Holy See was trying to meddle in Italian politics. "Prodi's government dared to challenge the ecclesiastical hierarchy for the second time and this time it has had its hands burned," it said. Franco Giordano, a Communist MP, said that Mr Mastella was merely a "loudspeaker" for the Vatican, and that he had switched sides because he was told to. As Mr Mastella announced his defection on Monday, Cardinal Angelo Bagnasco, the head of the Italian Bishops Conference, attacked Mr Prodi. "The country is in pieces," he said. "There is lazy administration and a shirking of responsibility."

The bank said the fraud was based on simple transactions, but concealed by "sophisticated and varied techniques". It also announced fresh losses of 2.05bn euros related to the sub-prime mortgage crisis in the US. The losses are four times greater than those made by Nick Leeson, the rogue trader who brought down Barings Bank. Leeson was sentenced to six-and-a-half years in jail.

The bank, one of France's largest, will need to seek 5.5bn euros in new capital to offset the losses. But it said it would still make a profit of 600m to 800m euros for 2007, despite the blow to its balance sheet.

House of Representatives Speaker Nancy Pelosi said Congress would act on the deal "at the earliest date, so those rebate cheques will be in the mail". Some 117 million US homes will receive a rebate of up to $600 for individuals and up to $1,200 for married couples. Washington is moving fast to try to avoid the US falling into a recession. Couples with children will also get an extra $300 per child. The tax rebates for households should total $100bn, while businesses will benefit from up to $50bn of tax cuts.

The agreement comes two days after the Federal Reserve slashed US interest rates to 3.5% from 4.25%, its biggest cut in 25 years. Economists say the package needs to be put into action as soon as possible, before it is too late to help the economy. "I can't say that I'm totally pleased with the package, but I do know that it will help stimulate the economy," said the Democratic Party's Ms Pelosi. "But if it does not, then there will be more to come."

Some politicians are worried about the damage the plan will do to government finances. It could potentially double last year's budget deficit of $163bn. "I am concerned that in our rush to help, we talk ourselves into a quick, feel-good hit today that will leave us with a bigger budgetary hangover tomorrow," said Rep Paul Ryan of Wisconsin, the senior Republican on the House Budget Committee.