Meeting over the weekend, Fed Chairman Ben Bernanke cut the so-called discount rate at which it is prepared to lend to banks to 3.25pc and said it will lend more to the 20 big banks that make the market for US government debt. Coming a day before the Fed was scheduled to meet on interest rates, the action signals that THE CENTRAL BANK IS INCREASINGLY FEARFUL OF AN IMPLOSION IN MARKETS.

Vincent Reinhart, a former director at the Fed, told Bloomberg News THAT THE MOVE'S "GOT TO TELL YOU THE ECONOMY IS IN A PRETTY PRECARIOUS STATE." The news sent shares in Asia tumbling, with Japan's Nikkei 225 down more than 3pc, Hong Kong's Hang Seng index off more than 4pc and THE DOLLAR CRASHING TO A NEW LOW AGAINST THE EURO.

The greenback, which has been battered so far this year, also fell against the yen and reached parity with the Swiss Franc. David Goldman, a strategist at Asteri Capital in New York, said: "SOMETHING IS SYSTEMICALLY VERY WRONG AND WE'RE AT A VERY DANGEROUS MOMENT." JP Morgan Chase last night sealed the eleventh hour deal to buy stricken investment bank Bear Stearns at a bargain price after the Federal Reserve agreed to provide a $30bn funding lifeline.

A link between hyperactive behaviour and the substances used to colour sweets, drinks and medicines was established in a British study published last year. University of Southampton researchers warned the additives "damage the psychological health" of children. The study was funded and designed by scientists from Britain's Food Standards Agency.

However, the European Food Safety Authority has decided flaws in the way the research was drawn up mean it does not offer definitive evidence of a risk to the general population. This means there is no legal reason for manufacturers to remove the suspect additives. Products known to include the additives range from Cadbury Creme Eggs to Fanta and Calpol. The Southampton research team is adamant it identified "significant adverse effects" among healthy children given drinks containing a cocktail of additives. The campaigning food and health group, Sustain, condemned the European authority's stance and called on Britain to impose a unilateral ban. Campaigns director Richard Watts said: "No one now disputes these artificial additives pose a threat to children's health and well being.

The additives linked to hyperactive behaviour are the colours Tartrazine (E102); Quinoline Yellow (E104); Sunset Yellow (E110); Carmoisine (E122); Ponceau 4R (E124); and Allura Red (E129). The preservative Sodium Benzoate(E211) is also implicated.

"ENOUGH WITH THE SLAUGHTERS. ENOUGH WITH THE VIOLENCE. ENOUGH WITH THE HATRED IN IRAQ!" Benedict said to applause at the end of Palm Sunday Mass in St. Peter's Square. On Thursday, the body of Archbishop Paulos Faraj Rahho was found near the northern Iraqi city of Mosul, from where he had been abducted on Feb. 29. No one has claimed responsibility, but al-Qaida retains its last urban stronghold in the area.

BENEDICT HAS CALLED RAHHO'S DEATH AN "INHUMAN ACT OF VIOLENCE" THAT OFFENDED HUMAN DIGNITY. The Vatican strongly opposed the U.S.-led invasion of Iraq. In its aftermath, Benedict has frequently criticized attacks against Iraqi Christians by Islamic extremists. Last year, he urged U.S. President George W. Bush to keep the safety of Iraqi Christians in mind.

Benedict is due to preside over a memorial service at the Vatican on Monday in honor of Rahho. Typically, the pope only presides over such services when a cardinal dies.

"Everyone in the family has been ordered to take a shower immediately after they've been out," said Wong, a 33-year-old father of two and insurance agent at Prudential Plc. "It reminds me of SARS. We're taking the same precautionary measures." On Thursday, Hong Kong shut all kindergartens and primary schools, affecting more than 500,000 children. The schools will remain closed through March 28, the end of a scheduled Easter holiday break. In 2003, severe acute respiratory syndrome decimated Hong Kong's economy and wrecked the tourism industry. People hid behind surgical masks and locked themselves inside their homes, leaving once bustling streets deserted. The territorial government was criticized for responding too slowly to SARS. This time it isn't taking chances.

The WHO estimates that the flu causes 250,000 to 500,000 deaths a year worldwide. Several strains of flu and other common respiratory viruses are circulating in the city, said Susan Chiu, associate professor at the University of Hong Kong's department of pediatrics and adolescent medicine. In addition, the disease spreads easily in a crowded city like Hong Kong, with almost 7 million people. "When people live, work and play in close proximity to each other, the chances of transmitting a virus are higher, and Hong Kong is certainly a densely populated city," said Gregory Hartl, a WHO spokesman in Geneva.

THOSE CHEMICALS HELP FEED CROPS ON LAND, BUT AS THEY BUILD UP IN THE STILL, WARM WATERS OF THE GULF, THEY IN TURN FEED EXCESS GROWTH OF ALGAE. When algae dies and decomposes, the process sucks much of the oxygen out of the water. A sea without oxygen is little different from the surface of the moon - nothing can live there. Fish and other sea life flee, or suffocate. That's the Gulf's dead zone, and LAST YEAR IT REACHED 7,915 SQ. MI (20,500 SQ. KM) - NEARLY THE SIZE OF NEW JERSEY. Worse, the dead zone is getting bigger, with last year's bloom the third largest in history.

THAT'S CAUSE FOR CONCERN AS AMERICAN FARMERS PLANT INCREASING AMOUNTS OF CORN, A CROP THAT REQUIRES HEAVY FERTILIZER, TO MEET THE GROWING GLOBAL DEMAND FOR GRAIN AND TO SUPPLY AMERICA'S CORN-HUNGRY ETHANOL MAKERS. According to a separate study published by University of British Columbia and University of Wisconsin researchers this week in the Proceedings of the National Journal of Sciences, ethanol is directly linked to the Gulf of Mexico dead zone. If farmers produced enough corn to meet the congressional goal of producing 15 billion gallons of ethanol by 2022, nitrogen runoff into the Gulf would increase by 10% to 19%, the study's authors reported, and shrinking the dead zone would be "practically impossible."

Mulholland backs that conclusion. Our inland waterways can barely handle the nitrogen fertilizer we're already using in order to grow record yields of corn and other crops. Truly ramping up biofuel production - unless it can be done in a way that uses much less fertilizer, perhaps with experimental techniques that harness plant waste matter instead of food crops - might overwhelm that system. "We have to be very careful about biofuels in terms of what kind of crops we grow and where we grow them," says Mulholland. "The great expansion of corn could be a real problem." IT WOULD BE A POOR TRADEOFF IF WE KILLED THE SEAS TO FUEL OUR CARS.

A quick tally of the record of civil liberties erosion in the United States since 9/11 suggests that the majority of Americans are ready to trade diminished privacy, and protection from search and seizure, in exchange for the promise of increased protection of their physical security. Polling consistently supports that conclusion, and Congress has largely behaved accordingly, granting increased leeway to law enforcement and the intelligence community to spy and collect data on Americans. Even when the White House, the FBI or the intelligence agencies have acted outside of laws protecting those rights - such as the Foreign Intelligence Surveillance Act - the public has by and large shrugged and, through their elected representatives, suggested changing the laws to accommodate activities that may be in breach of them.

Civil libertarians are in a state of despair. "People don't realize how damaging it is to a democratic society to allow the government to warehouse information about innocent Americans," says Mike German, national security counsel at the American Civil Liberties Union. For now, however, civil libertarians will have to continue to argue that THE DANGER LIES NOT IN HOW THE GOVERNMENT'S EXPANDED POWERS ARE BEING USED NOW, BUT HOW THEY MIGHT BE USED IN THE FUTURE. So far, that argument hasn't convinced the people.

Western powers embroiled in a deepening standoff with Tehran over its disputed nuclear plans condemned Friday's election as unfair after many reformist politicians, the hardline president's staunchest critics, were barred from running. But even though pro-reformers will only have a minority in the new legislature of world's fourth-largest oil-producer, analysts say they could team up with more moderate conservatives who have voiced concern about Ahmadinejad's economic policies blamed for surging inflation.

Iranian officials have hailed the election as a victory over the United States, the Islamic Republic's arch-foe, which on the day of voting said the result was "cooked". "More than 70 percent of parliament seats belong to principlists," Shahabeddin Sadr, projected to win a seat for the conservatives in Tehran, told Reuters. "It is a great honor that people put their trust in us again." But the European Union, whose main members agree with U.S. suspicions that Iran is making nuclear weapons, said the election was "neither fair nor free".

Bernanke and the four Fed governors voted yesterday to become creditors to Bear Stearns Cos., a securities firm that isn't a bank, by invoking a law that hasn't been used since the 1960s. Three days earlier, the Fed said it would swap Treasury notes on its balance sheet for privately issued mortgage-backed securities held by Wall Street firms. "It's a re-drawing of the relationship of the Federal Reserve with the rest of the financial system," said Vincent Reinhart, former director of the Division of Monetary Affairs at the Board. Risks of so-called moral hazard, where firms will now come to count on bailouts by a federal agency, "are considerable," he said.

Former Treasury Secretary Lawrence Summers said THE FED IS TRYING TO NAVIGATE THROUGH A ONCE-IN-A-GENERATION FINANCIAL AND ECONOMIC STORM. Panic selling is lowering the value of stocks and bonds, spurring more selling. Unemployment is rising, reducing incomes and spending, and falling asset prices -- including homes -- are leading to a contraction in credit.

"That three-way combination feels like something we have not seen in this country in a very, very long time," Summers, now a professor at Harvard University, said in a Bloomberg Television interview in Washington. "It's a near-certainty we are in a recession and there is a real prospect that it could be a serious one without strong policy action. THE NAME OF THE GAME IS PREVENTING DISASTER," said NYU's Gertler. "BY LETTING ONE HOUSE BURN DOWN, YOU MIGHT HAVE THE WHOLE NEIGHBORHOOD BURN DOWN. YOU WANT TO AVOID THAT."

THERE ARE FOUR PROBLEMS WITH ALL OF THIS. The first is that bad news overwhelms good. The collapse of one of the Carlyle Group's funds, and rumours of the impending demise of Bear Stearns, trumped Bernanke's announcement.

THE SECOND PROBLEM is that the Fed is a tiny player in the mortgage market. The $200 billion of mortgages Bernanke will be taking on are a drop in the ocean that is the $11 trillion mortgage market. And HE HAS ONLY ANOTHER $400 BILLION IN TREASURY NOTES TO PLAY WITH - if he is willing to have these mortgages make up his entire stock of assets.

THIRD, so long as house prices continue falling, the value of mortgages will continue falling. The Fed can't do much to stop that decline, and WE SEEM TO HAVE A LONG WAY TO GO before house prices reach some bottom, unsold houses are absorbed, and the market turns up.

FINALLY, the Fed might be fighting yesterday's war, when the problem seemed to be a liquidity crisis. The Fed first lowered interest rates to facilitate borrowing. No luck; long-term rates were immovable. It then made funds available to credit markets for very short periods on attractive terms. No luck; credit markets remained frozen. So now we have the offer of $200 billion of high-quality assets to replace those of lesser quality. TUNE IN AFTER A FEW WEEKS TO FIND OUT IF THIS HAS SIGNIFICANTLY EASED CREDIT MARKETS, OR MERELY CREATED A BIT OF EUPHORIA IN STOCK MARKETS.

Meanwhile, THE FED'S CRITICS ARE SAYING THAT THE ENEMY IS NO LONGER LIQUIDITY, BUT THE THREAT OF INSOLVENCY. We have already had billions in write-offs, and hundreds of billions more of such "marking to market" is coming. So steep will these write-downs be that the banks will find they are bust - what they owe to depositors and creditors exceeds the value of their shrivelled assets. UNLESS THEY CAN GET MORE CAPITAL, SAY THE DOOM-MONGERS, THEY WILL HAVE TO SHUT THEIR TELLERS' WINDOWS.

The Palace's blunt retort caused consternation in Downing Street, where a spokeswoman said: "You don't have anything on the record, do you?", before calling back to say that it was a matter for Lord Goldsmith and the Ministry of Justice. ROYAL INSIDERS ALSO ACCUSED LORD GOLDSMITH OF FALSELY IMPLYING THAT HIS REVIEW HAD THE FULL AUTHORITY OF THE ROYALS.

Lord Goldsmith, who left the Government last summer, argued that asking school leavers to pledge an oath of allegiance at passing-out ceremonies would "promote a sense of shared belonging" and "better integrate newcomers to our society". But he infuriated traditionalists by suggesting the HISTORIC OATH TO THE CROWN, as already taken by new British citizens, MIGHT BE REPLACED BY A PLEDGE OF COMMITMENT TO THE COUNTRY or a statement on the rights and responsibilities of citizens.

Critics condemned the oath AS BEING MORE APPROPRIATE FOR A REPUBLIC, such as France or America, than a monarchy. For centuries, members of both Houses of Parliament have been required to take an oath, swearing TO 'BEAR TRUE ALLEGIANCE' TO THE QUEEN AND HER SUCCESSORS. Oaths are also sworn by all new recruits to the British Army and the Royal Air Force, and have become a central part of citizenship ceremonies.

The current holder of the 658-year-old post, Lieutenant General Sir Michael Willcocks, is being forced to quit the job two years earlier than expected - and his successor will have only half his powers. The job will still include ceremonial responsibilities, but day-to-day running of the Lords' offices will be switched to a corporate-style "director general of facilities".

The decision has led to a behind-the-scenes battle - with claims it is revenge for Sir Michael's row with Tony Blair over the Queen Mother's funeral in 2002. Mr Blair made an official complaint after The Mail on Sunday revealed he tried to steal the limelight at the Queen Mother's lying-in-state. He was forced to climb down after Black Rod said the story was true.

A Conservative peer said: "LABOUR HAVE NO RESPECT FOR TRADITION AND WANT TO TURN THE LORDS INTO LITTLE MORE THAN A COUNTY COUNCIL." The post of Black Rod was created in 1350. He is responsible for security at the Lords and the State Opening of Parliament, when he bangs on the Commons door three times with his mace to summon MPs to hear the Queen's Speech.

The Fed meeting is expected to result in yet another cut in the target Fed Funds rate; a half-percentage point cut would take the rate to 2.50%, the lowest level since February 2005. The FOMC continues to take liquidity actions to deal with credit market deterioration, by reducing rates and providing new sources of funds to struggling depositary institutions and investment banks.

While the stock market jumped after the Federal Reserve said it would help primary dealers (investment banks), it gave back some of the gains one day later, and then reacted negatively on news of emergency actions to deal with liquidity issues at Bear Stearns. The focus shifted to liquidity since financial institutions are generally more vulnerable to liquidity pressures than credit pressures.

Those events lead directly to this coming Tuesday's meeting which, before Friday's emergency Federal Reserve action, had already been deemed critical.

While common throughout the Middle East and in Muslim communities, the new anti-Semitism is not confined to those populations, said the report, prepared by the office of the special envoy for monitoring anti-Semitism. For example, the report cited frequent requests to the United Nations to commission investigations of reports of alleged atrocities and other human rights violations by Israel.

Unremitting criticism of Israel is mounting, the report said, and Israeli policy is sometimes likened to the Nazis. At the same time, the report to Congress said, there is a failure to pay attention to regimes guilty of grave violations. This has the effect of reinforcing the notion that the Jewish state is one of the greatest sources of abuse of the rights of others "and thus, unintentionally or not, encourages anti-Semitism," the report said.

While Israel's policies and practices must be subject to criticism and scrutiny to the same degree as other countries', "those criticizing Israel have a responsibility to consider the effect their actions may have in promoting hatred of Jews," the report said.

The report singles out Iran's President Mahmoud Ahmadinejad as a Holocaust denier whose government practices official anti-Semitism against its Jewish minority, and the Syrian government as routinely demonizing Jews. In Belarus, state enterprises produce and distribute anti-Semitic material, and in Venezuela, President Hugo Chavez has publicly demonized Israel and used stereotypes about Jewish financial influence and control, the report said. Government media in Venezuela, Saudi Arabia and Egypt have become "vehicles for anti-Semitic discourse," the report said.

JP Morgan Chase will provide the money to Bear Stearns for 28 days with the Federal Reserve of New York's backing. JP Morgan is also trying to get long-term financing for the struggling bank. Bear Stearns' problems stem from the global credit crunch and the worry is that other lenders may also have major funding problems, analysts said. The bank is Wall Street's fifth largest investment bank, and has been at the centre of the US mortgage debt crisis. Recently, speculation had intensified that it was struggling to fund its daily business.

The bank's creditors have become progressively concerned about Bear's exposure to mortgages, said BBC business editor Robert Peston. "The rescue of Bear Stearns demonstrates that the worst of the global credit crunch is not yet behind us," he said. He says that if the bank had been allowed to collapse, it could have put the whole financial system at risk.

Speaking on A-Shams radio, Salah, the head of the northern branch of the Islamic Movement, said he would not appear for questioning because he is afraid he will be attacked by Jews in retaliation for the murder of eight young yeshiva students in Jerusalem last week by an Israeli Arab terrorist.

During his speech last year, Salah announced, "The time has come for an Arab-Muslim intifada for Jerusalem and the Al-Aksa Mosque."