"THE ECONOMY IS IN MUCH WORSE SHAPE THAN WE THOUGHT IT WAS IN," Biden said during an interview - his first since becoming vice president-elect. "There is no short run other than keeping the economy from absolutely tanking. That's the only short run." Biden said he has canvassed Republican and Democratic members of Congress about a second "big" and "bold" stimulus package . He said the Obama team is focused on creating jobs and spending on energy and information technology infrastructure.

"Every single person I've spoken to agrees with every major economist. There is going to be real significant investment, whether it's $600 billion or more, or $700 billion, the clear notion is, it's a number no one thought about a year ago," he said. The future vice president said the struggling economy will be the number one priority for the Obama Administration next year.

From the BBC, UK - 'No recovery soon' in bank credit. Consumers and companies will continue to find it DIFFICULT TO ACCESS CREDIT FOR THE NEXT ONE TO TWO YEARS, the boss of Barclays bank, John Varley, has said.

"WIDESPREAD CIVIL VIOLENCE INSIDE THE UNITED STATES would force the defense establishment to reorient priorities in extremis to defend basic domestic order and human security," said the War College report. The study says economic collapse, terrorism and loss of legal order are among possible domestic shocks that might require military action within the U.S.

International Monetary Fund Managing Director Dominique Strauss-Kahn warned Wednesday of economy-related riots and unrest in various global markets if the financial crisis is not addressed and lower-income households are hurt by credit constraints and rising unemployment. U.S. Treasury Secretary Henry Paulson brought up a worst-case scenario as he pushed for the Wall Street bailout in September. Paulson, former Goldman Sachs CEO, said that MIGHT EVEN REQUIRE A DECLARATION OF MARTIAL LAW.

Nick Dranias, director of constitutional government at the libertarian Goldwater Institute, said a declaration of marital law would be an extraordinary event and give military control over civilian authorities and institutions. Dranias said the Posse Comitatus Act restricts the U.S. military's role in domestic law enforcement. But he points to a 1994 U.S. Defense Department Directive (DODD 3025) he says allows military commanders to take emergency actions in domestic situations to save lives, prevent suffering or mitigate great property damage.

"Today's approval brings us a decisive step forward towards setting up A TRUE EUROPEAN DEFENCE EQUIPMENT MARKET," Guenter Verheugen, EU commissioner responsible for enterprise and industry and one of the initiators of this directive said after the vote. THE PROPOSAL DRAFTED BY GERMAN green MEP Heide Ruhle and endorsed by the plenum on Tuesday provides a European system of licences which will be uniform and applicable throughout the 27 member states.

"We shall not build Europe without the [nation] states. As European as you may be, Europe is not the enemy of nations," Mr Sarkozy told MEPs gathered for a plenary session in Strasbourg. "Wanting to pass above the heads of those who have been elected in their countries, it is not a mistake, it is a fundamentalism… WANTING TO BUILD EUROPE AGAINST THE [SOVEREIGNTY OF] NATIONS WOULD BE A HISTORICAL MISTAKE," he said in a speech presenting the outcomes of France's six months at the EU helm.

A strong Europe cannot be built on weak states, Mr Sarkozy stressed. "Europe is strong when it leans on strong and responsible states… The mistake is to believe that we need weak states to build a strong Europe," he told MEPs. In addition, and in order to have a more "political Europe," it should also be made clear that all EU member states enjoy the same rights.

"The big [EU] countries do not have greater rights than the smaller ones," he said, adding: "but perhaps [they have] more responsibilities." Mr Sarkozy has admitted that he has enjoyed the past six months and said his role would not stop there. "IT [THE EU] IS WITHOUT DOUBT THE BEST IDEA INVENTED IN THE 20TH CENTURY…"

LAST FRIDAY, THE WORLD CAME TO A STANDSTILL IN STUTTGART'S SINDELFINGEN DISTRICT. On normal days, about 1,500 trucks and 52 rail cars arrive at the Mercedes plant in Sindelfingen, carrying steel and glass, tires and dashboards, headlights and seats. More than 36,000 employees pass through the factory gates every day to develop new models and assemble the current ones - the Mercedes C, E and S classes. On normal days, at least 1,500 cars roll off the assembly lines at the plant. BUT WHAT IS NORMAL NOWADAYS, with new reports on the recession coming in each day?

Now the Mercedes plant is closed - until Jan. 11. Production facilities worth billions have been shut down. Everything, from the paint shop to the welding and production robots to the assembly line itself, has stopped moving. Daimler, like Ford (at its German plants), Opel, BMW and VW, has stopped production temporarily. The German auto industry, which is responsible for one in seven jobs, is putting itself into something resembling an artificial coma. Some companies are using working time accounts to keep their employees at home, while others have introduced a shortened workweek. NO ONE KNOWS WHAT WILL HAPPEN NEXT YEAR.

And a ghostly silence it is, this national standstill. Order volume has plummeted across the board in German industry, and the markets are shrinking at a breathtaking pace. Planned investments are being cancelled or postponed. THE ECONOMY HAS ENTERED A RECESSION OF PREVIOUSLY UNIMAGINABLE PROPORTIONS. Will 2009 be more like 2001, the year of the Sept. 11 terrorist attacks on New York and Washington, which was followed by only a brief downturn? Or like 1973, the year of the oil crisis, which marked the beginning of a decade of stagnation and inflation? Or will the future resemble 1929, the year the stock market crashed, LEADING TO A WORLDWIDE DEPRESSION THAT DID NOT, IN EFFECT, END UNTIL 16 YEARS LATER, WITH THE END OF WORLD WAR II?

The blanket shutdown marked a deepening of the financial crisis for the embattled U.S. auto industry and came as Chrysler and its larger rival General Motors Corp both seek to shore up cash as they seek a federal bailout they say they need to survive. The shutdown by Chrysler will idle plants in the United States, Canada and Mexico producing vehicles for its Chrysler, Jeep and Dodge brands.

The more than 30,000 Chrysler workers in the United States represented by the UAW receive nearly full benefits and wages during plant shutdowns, but labor costs represent only about 10 percent of the total cost of the average vehicle.

By idling plants, Chrysler and other automakers can cut costs on inventory, components and related charges such as utilities for operating large production facilities. Chrysler's sales plunged 47 percent in November and were down almost 28 percent for the first eleven months of 2008.

They say the report, which was published on Monday, contained SWEEPING SCIENTIFIC ERRORS and was a one-sided portrayal of a complicated issue. "If the issues weren't so serious and the ramifications so profound, I would have to laugh at it," said David Deming, a geology professor at the University of Oklahoma who has been critical of media reporting on the climate change issue. In the article, 'Obama Left with Little Time to Curb Global Warming', AP Science Writer Seth Borenstein wrote that global warming is "a ticking time bomb that President-elect Barack Obama can't avoid," and that "global warming is accelerating."

Deming, in an interview, took issue with Borenstein's characterization of a problem he says doesn't exist. "He says global warming is accelerating. Not only is it continuing, it's accelerating, and whether it's continuing was COMPLETELY BEYOND THE EVIDENCE," Deming told FOXNews.com. "The mean global temperature, at least as measured by satellite, is now the same as it was in the year 1980. In the last couple of years sea level has stopped rising. Hurricane and cyclone activity in the northern hemisphere is at a 24-year low and sea ice globally is also the same as it was in 1980." Comments from other top scientists :-

• "IT IS A BLATANT LIE put forth in the media that makes it seem there is only a fringe of scientists who don't buy into anthropogenic global warming." - U.S Government Atmospheric Scientist Stanley B. Goldenberg of the Hurricane Research Division of NOAA.

• "Warming fears are the WORST SCIENTIFIC SCANDAL IN THE HISTORY… When people come to know what the truth is; they will feel deceived by science and scientists." - UN IPCC Japanese Scientist Dr. Kiminori Itoh, an award-winning PhD environmental physical chemist.

• Nobel Prize Winner for Physics, Ivar Giaever, says,"…GLOBAL WARMING HAS BECOME A NEW RELIGION."

The Washington Times recently noted , "It is time to file this theory (Global Warming) in the dustbin of history… Alarmists are in denial and running for cover." The 650 dissenting scientists are more than 12 times the number of UN flacks who authored the media enabled (hyped) IPCC 2007 Summary for Policymakers

The world's biggest currency-trading firms say THE DOLLAR'S APPEAL AS A HAVEN AMID THE FINANCIAL CRISIS ALL BUT EVAPORATED. CMC Markets said today THE CURRENCY'S PROSPECTS APPEAR "OMINOUS." State Street Global markets said the dollar's outlook has been "undermined."

The dollar fell to 87.14 yen, the lowest since July 1995, before trading at 87.45 yen as of 3:51 p.m. in New York, from 89.05 yesterday. It depreciated to $1.4437 per euro from $1.4002 and traded at $1.4366, the weakest since Sept. 30.

The dollar is likely to decline "longer term," analysts including New York-based Ashraf Laidi at CMC Markets wrote in a report. "Prospects ahead appear particularly ominous for the world's reserve currency once global economic stability starts to build up."

Newsnight has been told of a new case in a separate genetic group. The government's chief adviser on vCJD, Professor Chris Higgins, said estimates were that up to 350 people could become affected by this new type. What is of concern to doctors in the new case is that the individual concerned has a particular genetic make-up and it is the first case to appear of that type.

There is a key gene linked to vCJD and 42% of the population have a version of that gene, known as MM. It looked like the disease had almost gone away, but this new case is from a group with a version of the gene called MV. This raises fears that the 47% of the population who have this gene are now at risk.

Campaigner Christine Lord, who lost her son to vCJD a year ago, when he was 24, is going to Downing Street on Thursday to ask Gordon Brown to do more. "I WANT PEOPLE TO KNOW OUT THERE THAT VCJD HASN'T GONE AWAY AND IT'S STILL KILLING PEOPLE... AND NOW IT LOOKS LIKE IT'S THE NEXT WAVE." She said that while not much could be done about those who might already have been infected by eating BSE-infected meat, the chances of secondary infection via blood donors who might be "silent carriers" of the disease could be minimised. She wants the government to speed up the use of tests that might screen people's blood supply for vCJD and TO RELEASE DOCUMENTS SHE SAYS WILL NAME THOSE WHO ARE TO BLAME FOR THE WHOLE BSE FIASCO.

In a few short months fears of recession and inflation have been displaced by concerns about depression and deflation - when the price of goods, houses, shares and wages fall dramatically. FEDERAL RESERVE CHAIRMAN BEN BERNANKE - regarded as one of the world's greatest experts on the Great Depression of the 1930s - HAS UNLEASHED ALL THE WEAPONS IN HIS ARMOURY IN ONE GO.

He has reduced official interest rates, at which banks can borrow from the Federal Reserve, to a range between zero per cent to 0.25 per cent. This is a far more radical step than most economists predicted. It is clearly designed to try and bring an end to the deadlock in the money markets - where banks lend to each other - by making money as cheap as possible. He is planning to send the operational arm of the central bank into the market to buy up long term U.S. government bonds, used to fund its budget deficit. In other words he is exchanging debts drawn on the U.S. government for cash, which is essentially printing money.

ESSENTIALLY THE FED HAS CHOSEN TO FLOOD AMERICA WITH DOLLARS. It is officially declaring that it will not allow the world's largest economy to stop growing. It is a great gamble because by using all the weapons at its disposal at once, IT HAS VERY FEW CONFIDENCE-BOOSTERS LEFT. The revolutionary American approach to the crisis is certain to place pressure on the Bank of England to take similar steps.

No one can accuse the authorities concerned of not rising to the occasion. But governments must take back the interest rate cuts rapidly as the world recovers. Otherwise, RECESSION AND DEFLATION COULD BE FOLLOWED BY SURGING PRICES AND A FRESH DOSE OF INFLATION.

It has been called the "Big Brother" law in the German media due to its provisions allowing online and telephone surveillance. The Interior Ministry in Berlin describes it as A NECESSARY STEP TO PROTECT THE COUNTRY FROM THE DANGERS OF INTERNATIONAL TERRORISM.

But journalists in Germany see the bill - currently in the parliament's arbitration committee after having failed to get through the country's upper legislative chamber, the Bundesrat, in November - in a different light. They are concerned the law would make it much easier for investigators to spy on reporters without their knowledge, giving the state access to both their computer files and their sources. That, they say, represents an unacceptable attack on freedom of the press in Germany. Publishers, journalists and media lawyers are up in arms.

THE ARMED FORCES OF INDIA AND PAKISTAN ARE STILL BEING KEPT ON A HEIGHTENED STATE OF ALERT. F-16 fighter aircraft take off into the skies over the capital Islamabad every day, fueling a now-constant state of paranoia over a possible attack. "There will certainly be an attack, perhaps even war," a high-ranking officer with the ISI, Pakistan's intelligence service, told SPIEGEL. "We are expecting it." The agents and their counterparts in the armed forces expect the Indians to launch a missile attack on the training camps of militant groups in Kashmir.

Zardari has done everything he can to avoid war with India. But in doing so he has made enemies at home. He is the first Pakistani head of state to have dared to call the militant Kashmiri fighters "terrorists." Even bolder was his claim that India, with which Pakistan has already waged three wars, was never a real threat. Such willingness to reconcile with India can be deadly in a country of which it has always been said that the army maintains the state, and not the other way around.

Islamist extremism, no longer a marginal phenomenon in Pakistan, has actually become chic. With its wealthy financiers in the Gulf states and its local, extremely well-organized religious charities, the movement offers every devout Muslim attractive prospects: a place in society, respect and a career.

Barak said the world should press Iran to stop it from building nuclear weapons. He spoke at a conference of the Institute for National Security Studies at Tel Aviv University. He said, "If it built even a primitive nuclear weapon like the type that destroyed Hiroshima, Iran would not hesitate to load it on a ship, arm it with a detonator operated by GPS and sail it into a vital port on the east coast of North America."

Indicating the possibility of a military strike, Barak said, "We recommend to the world not to take any option off the table, and we mean what we say."

TEMPERATURES WERE 20 BELOW ZERO AND LOWER ACROSS THE NORTHERN PLAINS, and a band of snow, freezing rain and sleet stretched from Kansas along the Ohio Valley to Maine. Dozens of schools closed in Kentucky and Tennessee because of slippery roads and salt truck crews started working before dawn. Up to a half-foot of snow had fallen in parts of Kentucky. "It's pretty treacherous," said Jodi Shacklette, a Kentucky State Police dispatcher in Elizabethtown. "We're working wrecks just left and right." Police in North Texas had to close some highway overpasses because they were so slippery with ice.

Some of the sharpest cold Tuesday was in northern Minnesota, where Hibbing bottomed out at 32 below zero and International Falls dropped to 28 below. In the middle of the state, St. Cloud fell to 24 below, BREAKING ITS OLD RECORD OF 21 BELOW SET IN 1963.

EVEN SOUTHERN CALIFORNIA WAS WARNED OF TEMPERATURES FALLING INTO THE MID-30S BY LATE WEDNESDAY. On Monday, thermometers read 31 below Monday in Glasgow, Montana, and the wind chill was 45 below, the weather service said. The Texas Panhandle had lows in the single digits, and Goodland, Kansas, registered a record low of minus 10.

"THE ECONOMIC CONSEQUENCES OF EITHER A PARTIAL OR TOTAL SHUTDOWN OF THE DETROIT THREE ARE STARK," said the report. "Either scenario is sufficient to push Ontario into a deep recession while the nation may barely escape one in the 50-percent reduction scenario." Initial job losses of between 157,000 and 323,000 at assembly plants, parts manufacturers and others, depending on the scenario, would rise to between 296,000 and 582,000 by 2014, said the report.

The job losses would continue to mount after the first year because a weaker economy would depress investment, discourage immigration and halve new housing construction, leading to a negative economic spiral. "If we think that the extinction of the auto industry is a national economic evolution, this report says that is a mistake," said Ontario Economic Development Minister Michael Bryant.

"We won't let that happen because of the catastrophic effects that are laid out in this report," he said, describing the demise of Canada's auto sector as "the economic equivalent of a nuclear freeze with catastrophic effects that would knock us into a deep recession."