But imprecision is a venerable US political tradition, according to FactCheck.org, an independent watchdog which aims to "hold politicians accountable" for what they say. "PRESIDENTIAL CANDIDATES KEPT US BUSY" over the past year, said Brooks Jackson, director of FactCheck, an arm of the Annenberg Public Policy Center of the University of Pennsylvania. The campaign trail produced "a bumper-crop of falsehoods and distortions," which the organization has threshed through for its new list of prize-winning whoppers.

Topping the list with not one but five bogus claims was former New York mayor and Republican contender RUDY GIULIANI. FactCheck demolishes each of them, especially Giuliani's assertion that New York City was suffering "record crime" until he became mayor. "In fact," says FactCheck's sober analysis, "the city recorded its highest rates of both violent crime and property crime years before he took office. The downward trend was well established before he was sworn in" as mayor, in 1994.

The Democrats were no slouches in the hokum department. SENATOR HILLARY CLINTON claimed in a TV spot that soldiers in the National Guard and Reserves did not enjoy health insurance until she took up their cause. But FactCheck researched the issue and demonstrated that most of them did have health care. "Clinton did help expand and enhance government health care coverage for reservists, but can't claim credit for creating coverage where none existed," it said.

Covering up for an exposed half-truth sometimes leads to more prevarication. ROMNEY claimed recently that as a youth he "saw" his father, who was governor of Michigan, walking in a protest with civil rights leader Martin Luther King. Challenged on it, Romney argued that "saw" didn't necessarily mean with his own eyes. "I 'saw' him in the figurative sense," Romney explained. "If you look at the literature or look at the dictionary, the term 'saw' includes being aware of -- in the sense I've described."

The 2008 presidential candidates are no better nor worse tellers of tall tales than their predecessors, Jackson said. "IT IS JUST A FUNCTION OF RUNNING FOR OFFICE," he said. "The incentive is to say things that get votes - TRUTH IS OF SECONDARY IMPORTANCE TO A CANDIDATE."

In his time, president JOHN F. KENNEDY boasted he could read 1,200 words a minute. President LYNDON JOHNSON claimed that he had an ancestor who died at the Alamo -- a heroic battle in Johnson's home state of Texas. In fact, Johnson great uncle took part -- but didn't die -- in another battle with Mexico, at San Jacinto.

Cannon, writing in the Atlantic magazine, also recalled that RONALD REAGAN boasted to Israeli Prime Minister Yitzhak Shamir and Nazi-hunter Simon Wiesenthal that he had filmed the liberation of the Nazi death camps by US soldiers in World War II.

The problem with that story was, Reagan never served in Europe. FactCheck.org website

The 90,465-tonne German-registered vessel called LT Cortesia with 27 people on board ran into difficulties on the Varne Bank towards the middle of the Channel at 5am. The vessel was travelling from the Thames estuary westbound towards the Atlantic Ocean when it ran aground.

An MCA spokesman said none of the crew were injured and early indications suggest the ship is watertight with no reported pollution from the vessel. MCA spokeswoman Rosie Tapping said the container ship was registered as carrying hazardous cargo, but the exact nature of the materials on board was unknown.

A Dover Coastguard spokesman said it was a mystery why the container ship suddenly ran aground. He said: "We haven't a clue why it ran aground. The vessel had come down normally, made an alteration to its route and then went aground. The weather has been fine and its traffic pattern was OK until the last minute when it went aground. Until we get to speak to the people on board to find out what happened, we will not know."

Surging economies in China and India fed by oil and gasoline have sent prices soaring over the past year, while tensions in oil producing nations like Nigeria and Iran have increasingly made investors nervous and invited speculators to drive prices even higher.

Violence in Nigeria helped give crude the final push over $100. Light, sweet crude for January delivery rose $4.02 to $100 a barrel on the New York Mercantile Exchange before slipping back, according to Brenda Guzman, a Nymex spokeswoman.

There were no reports of injuries or damage, but dozens of tourists were evacuated from the base of the volcano and a group of 53 people was stranded after a local river swelled with meltwater and cut off road access.The volcano is one of the country's most active and is in the Araucania region in southern Chile.

Before the eruption, people in the towns closest to the volcano said they heard loud noises underground. The volcano began erupting at 18:20 p.m. (2130 GMT) on Tuesday and it was unclear how long it would continue.
The 10,253-foot (3,125-meter) Llaima volcano has frequent moderate eruptions.

But a constantly evolving and sometimes contradictory explanation of the events by Pakistani investigators has only clouded the issue. Meanwhile, her husband and her supporters are asking for a United Nations-led inquiry into her death, something Pakistani President Pervez Musharraf is unlikely to accede to. But even if Musharraf were to agree, there is very little for international forensics experts to investigate.

Within hours of the attack in the garrison town of Rawalpindi some 10 miles from the capital, authorities had already hosed down the streets. Pools of blood, along with possible evidence such as bullet casings, DNA samples from the bomber and tracks had been washed away. Retired Lieutenant General Hamid Gul, the former director general of Pakistani Intelligence, said he was shocked to see people cleaning up the debris so soon after the assassination.

"It's a crime scene, and they're washing away all the evidence! We need to be asking why the hell was this thing done." One of the few pieces of evidence from the crime scene that remains is amateur footage showing a clean-cut man in a black vest brandishing what appears to be a gun. Behind him stands another man, a white scarf wrapped around his head. It is thought that he might have been the suicide bomber.

The situation had already been muddied by contradictory versions of how Bhutto died. Initial health official reports stated that Bhutto had been shot twice before a suicide bomber detonated himself seconds later. But by Saturday, the government reversed track. Bhutto had been shot at, said Interior Ministry spokesman Javed Iqbal Cheema, but the shooter missed. The force of the explosion knocked Bhutto, who had been waving at the crowds from her vehicle's sunroof, backwards. She hit her head on a protruding lever, and succumbed to the fractures to her skull. Cheema presented X rays to support his claim, but witnesses and close friends who rushed Bhutto to the hospital say that there was no doubt she had been shot.

Doctors who had attended Bhutto immediately after the attack initially said that she died of gunshot wounds, but over the weekend they released new findings in line with the Interior Ministry's claim that the official cause of death was head wounds sustained when Bhutto fell. The reversal has many people suspecting government interference. Says Chaudhry Nisar Ali Khan, an opposition member of the National Assembly and a former petroleum minister: "The government says it was the work of terrorists and they say someone has claimed responsibility. What I don't understand is why they keep changing the story of how Bhutto died? Why do that? These summersaults make everything look suspicious."

And although the city itself seemed a little quieter - if no less tense - yesterday, the same could not be said for nearby villages in the Luo province of Nyanza where revenge against the Kikuyu was extracted swiftly and brutally.

Virtually cut off from the outside world by roadblocks erected by Luo fighters, the roads into Kisumu were also lined with flames yesterday afternoon. Smoke billowed from homes in the outlying hills. On the plains, sugar cane plantations and fields of maize owned by non-Luos also burned. Farmyard animals and flightless herons, squawking in terror, cowered on the asphalt as crops went up in flames on either side of the road.

"Billions of shillings worth of crops have been destroyed," said Helga Kagumba, a white farmer of German origin who watched from her veranda as fighters set fire to her sugar cane plantations, destroying 40 years of work in a few hours of ethnically motivated fury.

With food and fuel running dangerously low in many parts of the country, aid agencies are warning of a growing humanitarian crisis.

The particles it uses are so small - 80,000 times thinner than a human hair - that they can pass through membranes protecting the brain or babies in the womb. Nano health supplements, such as antioxidants, are already on the market while the first of hundreds of new foods are expected to arrive in the next 12 months. However, the products are being introduced without any regulation or independent assessment to ensure they are safe - mirroring the controversy over the launch of GM foods ten years ago.

Some critics have talked of the threat of the creation of a "grey goo" of tiny particles with hidden harmful properties. Prince Charles has said it would be "surprising" if the technology did not "offer similar upsets" to thalidomide - the morning sickness drug that caused children to be born with deformed limbs. Professor Vicki Stone, Professor of Toxicology at Napier University in Edinburgh, is concerned about unforeseen side effects. "We know very little about the ability of nanoparticles to move around the body, to accumulate or to be excreted, or their potential to cause toxic effects in organs," she said. However, nanotech advocates have remarkable claims for the technology. For example, foods are in development that are said to stave off the aging process.

The consumer group Which? is about to launch a nanotech campaign arguing that consumers need to be consulted on the risks and benefits before it is too late. The food and farming department Defra has published an independent report which admits there are serious gaps in safety data. It warns: "There could be very significant implications for business and the wider community if potential risks are not identified and managed before any harm to the environment or human health may be done." The report - Characterising the Risks Posed by Engineered Nanoparticles - states there is a shortage of research money.

It says the resulting absence of basic information about the particles means "it will be difficult or impossible to develop any general understanding of nanoparticle toxicology". The report adds: "Transfer across biological barriers - e.g. to the brain or foetus - should be studied. Research into how long these tiny particles persist in the body is urgently needed." It warns that work assessing human toxicology is being hamstrung by "profound difficulties in accessing relevant funding for these longer term projects".

Research by Which? found six out of ten people (61 per cent) have never heard of nanotechnology.

The campaigners said it is wrong to fly in food more than 5,000 miles from a country where millions are on the brink of starvation. They are planning to mount protests at Waitrose outlets, all of which stock the Zimbabwean tilapia fillets. Buyers for the chain say that selling the fleshy white fish helps preserve threatened species such as cod.

Last night, Wilf Mbanga, editor of The Zimbabwean, a UK-based newspaper, said: "People are starving in Zimbabwe. There is no food in the shops, there is no fish to be had there for the ordinary people. It's incredibly cruel taking food out of the mouths of starving people. It is very ill-advised of Waitrose. It is morally wrong. I find it very disturbing that they are taking fish from Zimbabwe at a time when millions are starving and surviving purely on international aid."

Professor Terence Ranger, president of the Britain Zimbabwe Society and a fellow at St Antony's College, Oxford, said: "Zimbabwe has a tremendous food shortage. It seems inappropriate for food of any sort from there being exported here. But on the other hand, Zimbabwe is badly in need of cash for hospitals and schools and it is a question of where this money is going."

Officials and traders both say there is no hope prices will come down soon. Since last week rice, the country's main staple, sold at nearly 40 taka ($0.60) per kilogram (2.2 pounds) in retail markets, twice the price the troops are offering, buyers said.

Bangladesh produces around 29 million tonnes of rice and wheat annually, nearly enough to feed its population. But two spells of devastating floods in July-September last year followed by the country's worst cyclone since 1991 in November destroyed nearly 1.8 million tonnes of rice, forcing authorities to issue an international appeal for emergency food aid.

One hope was an offer by India to sell 500,000 tonnes of rice in the post-cyclone period as a special gesture as New Delhi agreed to temporarily suspend a ban on rice exports - but the deal has not been finalised.

China is set to make 2008 the year it asserts its status as a global colossus by flexing frightening economic muscle on international markets, enjoying unprecedented levels of domestic consumption and showcasing itself to a watching world with a glittering £20bn Olympic Games. The world's most populous nation will mark the next 12 months with a coming-of-age party that will confirm its transformation in three decades from one of the poorest countries of the 20th century into the globe's third-largest economy, its hungriest (and most polluting) consumer and the engine room of economic growth.

Once regarded at best as a sporting also-ran, China is widely tipped to top the medals table in the Beijing Olympics in August, an event in which the country's leadership is investing huge importance and prestige. It will be a celebration viewed with consternation by many, as China's authoritarian regime shows little sign of relaxing its grip on power and continues to expand its influence overseas from the oil fields and metal mines of Africa to the City of London. Appropriately, 2008 marks the Year of the Rat, an animal considered in Chinese folklore to be a harbinger and protector of material prosperity.

BRITAIN WILL FEEL THE FULL POWER OF THE NEW SUPERPOWER'S CONFIDENCE. This month, for the first time, China's state-controlled banks will begin spending some of its $1.33trn (£670bn) in foreign currency reserves on London's financial markets. Beijing has ruled that Britain should become only the second destination after Hong Kong to be allowed to receive investors' money via so-called "sovereign funds" ? the huge state-controlled surpluses built up by cash-rich economies from Qatar to South Korea.

THE UK HAS MADE IT CLEAR THAT BEIJING'S INVESTMENT, WHICH COULD REACH AS MUCH AS £45BN, IS WELCOME and it follows the recent acquisition by Chinese banks of stakes in such blue chip stocks as Barclays and the US private equity firm Blackstone, at a cost of $3bn. THE TALK IN THE FINANCE HOUSES IS THAT THE LABEL "MADE IN CHINA" WILL SOON BE REPLACED BY ONE READING "OWNED BY CHINA". Takeover speculation has provoked concern in some quarters at the wisdom of selling large assets to organs of a democratically unaccountable state where the financial sector remains underdeveloped.

BUT OTHERS WARN 2008 HAS AS MUCH POTENTIAL TO BE A DISASTER as a triumph for Beijing's attempts to herald its own arrival on the world stage. The Chinese capital will host 31,000 journalists for the Olympics and any sign of protest or an attempt to quell dissent with violence would be catastrophic.

THE DRUM BEAT OF PROTECTIONISM is already sounding in America and will only get louder in a presidential election year, putting pressure on both Republican and Democratic candidates to take a "strong" stance on China.

And new Defense Department figures obtained by The AP show that the Air Force more than doubled its monthly use of drones between January and October, forcing it to take pilots out of the air and shift them to remote flying duty to meet part of the demand.

The dramatic increase in the development and use of drones across the armed services reflects what will be an even more aggressive effort over the next 25 years, according to the new report. For some Air Force pilots, that means climbing out of the cockpit and heading to places such as Nellis Air Force Base in Nevada, where they can remotely fly the Predators, one of the larger and more sophisticated unmanned aircraft. About 120 Air Force pilots were recently transferred to staff the drones to keep pace with demands, the Air Force said.

The increased military operations all across Iraq last summer triggered greater use of the drones and an escalating call for more of the systems - from the Pentagon's key hunter-killer, the Predator, to the surveillance Global Hawks and the smaller, cheaper Ravens.

In one recent example of what they can do, a Predator caught sight of three militants firing mortars at U.S. forces in November in Balad, Iraq. The drone fired an air-to-ground missile, killing the three, according to video footage the Air Force released.

The Mediterranean islands, both former British colonies, scrapped the Cyprus pound and Maltese lira at midnight. Maltese Prime Minister Lawrence Gonzi had to wait a little before getting his hands on the new currency. An automated teller machine did not work when Gonzi tried to withdraw euros, and he was obliged to use a different ATM.

Both countries welcomed the euro with outdoor celebrations, including a fireworks display in Malta's rainy capital Valletta. The euro has risen more than 11 percent against the dollar during the year and nine East European countries are waiting to convert. "We're sorry to say goodbye to our pound but happy to welcome the euro," Cyprus President Tassos Papadopoulos said moments after midnight on the island.

Current members of the euro zone include Austria, Belgium, The Netherlands, Finland, France, Germany, Ireland, Italy, Luxembourg, Portugal, Spain, Greece and Slovenia. New E.U. members Slovakia, Estonia, Latvia and Lithuania have joined the exchange rate mechanism; others with farther to go before adopting the euro are: Bulgaria, Hungary, the Czech Republic, Poland and Romania.

A mob attacked and set fire to the church in the western town of Eldoret where hundreds of people were hiding, say police and eyewitness reports. Dozens more are reported to have been taken to hospital with severe burns. It comes as EU election monitors said the presidential poll "fell short of international standards".

A pastor in Eldoret, Boaz Mutekwa, told the BBC that there were about 400 people taking refuge in the church, which belonged to the Kenya Assemblies of God. He said the church was set on fire at about 10.00 (07.00 GMT). He said most of the victims were members of the same Kikuyu ethnic group as the newly re-elected President Mwai Kibaki. A local reporter at the scene told Reuters news agency that a group of youths had set fire to the building after overpowering those guarding it. He said there were charred bodies both inside and outside the church.

Mr Kibaki was declared the winner on Sunday after a controversial three-day counting process. His challenger, Mr Odinga, said he was robbed of victory by alleged fraud.

In an interview at the start of a year that he hopes will yield a permanent Israeli-Palestinian peace accord, the prime minister said many rival Israeli political parties remain "detached from the reality" that requires Israel to compromise "on parts of Eretz Yisrael" in order to maintain its Jewish, democratic nature. If Israel "will have to deal with a reality of one state for two peoples," he said, this "could bring about the end of the existence of Israel as a Jewish state. That is a danger one cannot deny; it exists, and is even realistic."

Indeed, his primary responsibility as prime minister, Olmert said, lay in ensuring a separation from the Palestinians. "What will be if we don't want to separate?" he asked rhetorically. "Will we live eternally in a confused reality where 50 percent of the population or more are residents but not equal citizens who have the right to vote like us? My job as prime minister, more than anything else, is to ensure that doesn't happen."

The reality in which Israel was seeking an accommodation, he elaborated, includes a situation in which even "the world that is friendly to Israel - that really supports Israel, when it speaks of the future, it speaks of Israel in terms of the '67 borders. IT SPEAKS OF THE DIVISION OF JERUSALEM."

"It's a coincidence that is almost 'the hand of God,'" Olmert said, "that Bush is president of the United States, that Nicolas Sarkozy is the president of France, that Angela Merkel is the chancellor of Germany, that Gordon Brown is the prime minister of England and that the special envoy to the Middle East is Tony Blair."

"The imperative", he said, "was to make every effort for progress while this array of supportive characters remained in place. What possible combination," he asked, "could be more comfortable for the State of Israel?"

But despite the chaos caused by the credit squeeze, London's blue chip index the FTSE 100 has risen by 3.8pc since the start of 2007, along with a host of other equity markets around the world. Although sterling rose yesterday against other world currencies, it has fallen by 6.1pc in the past year, which is the biggest annual decline since 1992 - the year in which Britain was ejected from the European Exchange Rate Mechanism. The sterling exchange rate index, which compares the pound with a comprehensive basket of currencies, finished the year at 97.9, having weakened by 6.7pc in the past six months.

The currency's dramatic fall follows news earlier in December of a sudden doubling of the size of Britain's current account deficit, and comes amid growing speculation that the Bank of England will cut interest rates more aggressively than anticipated. Having risen above the $2.10 mark against the US dollar, the UK currency is now back at $2, and is expected eventually to drop to $1.80 or lower.

Economists fear the housing market slowdown could cause a recession in Britain. Experts at Dresdner Kleinwort put the chances of such an eventuality at 50-50.