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His fund, BP Capital, will have about between $400 million and $500 million after expected withdrawals. It started the year with about $2 billion. A few weeks ago, Mr. Pickens moved the fund almost entirely into cash to help ride out the volatility in the energy patch, according to people close to the matter.

Mr. Pickens is expected to personally hold about 20% of the fund after the withdrawals, or about $100 million, after he does some selling along with his investors. He has lost an estimated $400 million or so in his funds this year.

Mr Rudd said confidence in local banks was fading as institutions in other countries were given government guarantees.

The Government decided to grant its own protection.

“Failure to act could have meant significant difficulties accessing credit and higher loan rates,” Mr Rudd said.

“This would have affected investment and consumption and ultimately growth and employment.”

And he made clear the forecasts were for more bad days to come.

“We must level with the Australian people: We are not immune from this crisis. We are feeling its impacts now and we will be feeling its impacts long into the future,” he said.

Government sources said the Prime Minister wanted to ensure Australians were aware the international financial disruption had not finished affecting our economy.

But UFC had friends in very high places—the assistant secretary of state for inter-American affairs, John Moor Cabot, was the brother of UFC President Thomas Cabot. The secretary of state himself, John Foster Dulles, had done legal work for UFC, and his brother Allen Dulles was director of the CIA and also on UFC’s board. Thanks to the Freedom of Information Act, we now know that the various Cabots and Dulleses had a series of top-secret meetings in which they decided that Árbenz had to go and sponsored a coup that drove Árbenz from office in 1954.

With a U.S. puppet back in the president’s mansion, UFC’s profits were safe. But it appears the company wasn’t the only beneficiary of this Cold War cloak-and-dagger diplomacy: A recent study by economists Arindrajit Dube, Ethan Kaplan, and Suresh Naidu argues that those in on the planning process also profited handsomely. By tracking the stock prices of UFC and other politically vulnerable firms in the months leading up to CIA-staged coups in Guatemala, Chile, Cuba, and Iran, the researchers provide evidence that someone—perhaps one of the Dulleses, Cabots, or others in the know—was trading stocks based on classified information of these coups-in-the-making.

This exposé is a contribution to the rapidly expanding field of “forensic economics,” which tries to understand the who, what, and why of illicit transactions. Since these are activities that take place out of sight (at least when they’re done right), researchers are forced to look for fingerprints left in the data by smugglers, bribe-taking politicians, and other lawbreakers.

Dube, Kaplan, and Naidu examine how the stock market reacted to events that no Wall Street trader should have known about: top-secret meetings of the coup-plotting cabals at CIA headquarters and presidential approvals of CIA-organized invasions. These events would have increased the expected future profits of companies like UFC—if the CIA-led coup in Guatemala were successful, for example, UFC would get its plantations back. If stock traders were privy to the coup-planning process, we would expect them to bid up the prices of affected companies in anticipation of these higher profits. These meetings and authorizations were all highly classified, however, and since you can’t trade on information you don’t have, UFC’s stock price shouldn’t have budged until the coup actually took place and the investing world learned of the regime change.

Unless, that is, some of the Cabots, Dulleses, or other insiders were using their privileged information to profit personally from a future coup. To understand why insider trading would boost a company’s stock price, suppose that someone in on the planning—perhaps at UFC or at the State Department itself—started quietly buying up cheap UFC stock in anticipation of the price jump that would come when the coup took place (or tipped off his stock-trading cousins about the future boost to UFC so they could do the same). All of this pre-coup buying would increase demand for UFC stock, bidding up its price even before CIA operatives actually got to work overthrowing the Guatemalan government.

Such trading on inside information is illegal, and when it involves highly classified details about a future CIA coup, it verges on treason. Yet the researchers found that prices of companies affected by the CIA’s regime-toppling efforts—UFC in Guatemala, Anglo-Iranian (oil) in Iran, Anaconda (mining) in Chile, and American Sugar in Cuba—went up in the weeks and months preceding the coups. (The authors restrict their analysis to coups for which they had access to declassified planning documents and for which U.S. companies had had property nationalized by the targeted regimes.)

Furthermore, these gains were concentrated in the days following crucial government authorizations or plans for the coup (suggesting the trades weren’t simply the result of good guesswork about a coup in the making). For example, in the week that President Eisenhower gave full approval to Operation PBFortune to overthrow Árbenz, UFC’s price went up by 3.8 percent; the stock market overall was flat that week.

In all, shares of coup-affected companies went up by a total of 10 percent following top-secret authorizations, swamping the 3.5 percent gain that came immediately in the coups’ aftermaths. If information hadn’t been leaking into the stock market via insider trading, then the entire impact of the coup should have appeared only when the very public invasions took place and the investing world finally got news of the regime change. Unfortunately, there are limits to what these stock-market forensics can uncover. When the researchers contacted the Securities and Exchange Commission to find out who was trading on these days, they learned that there are limits to what the Freedom of Information Act could provide. So, we can’t pin the apparent insider trading on anyone in particular.

There’s also some evidence, albeit tentative, that the market was very good at forecasting the coups’ success and failure—a further indication that the traders driving up the price had detailed knowledge of the covert plans (and their expected outcomes). The CIA-led invasion of Cuba is referred to these days as the Bay of Pigs fiasco for a reason, and whoever was trading on insider knowledge seemed to place his bets accordingly—the pre-invasion increase in American Sugar’s stock price was much lower than the gains for companies affected by the other, successful coups in the study.

What about the forensic economics of the Bush administration? Researchers have already estimated what it’s worth for Republican-connected companies to have George W. Bush in the White House by looking at what happened to the stock prices of companies with former Republican lawmakers on their boards when Al Gore gave up his fight for the presidency on Dec. 13, 2000 (they went up; Democratically connected companies’ prices went down).

If and when the story behind the U.S. invasion of Iraq becomes public, researchers will surely also be analyzing the share prices of the many companies that profited from a U.S.-occupied Iraq. None will see greater scrutiny than oil services giant Halliburton, whose former CEO Dick Cheney left the company to become vice president in 2000 and undoubtedly took part in the invasion’s planning. (Some say he was pivotal in the decision to invade.) In the Iraq war’s aftermath, Halliburton received billions in no-bid reconstruction contracts, boosting its profits and leading to accusations of corruption.

Investors bought baskets of commodities including energy, metal and grain futures on expectations the Fed would cut its benchmark lending rate. After markets closed, the central bank reduced the rate to 1 percent from 1.5 percent, which may encourage borrowing and spur overseas importers to purchase U.S. grain. Wheat dropped 24 percent this month through yesterday.

“A half-point rate cut by the Fed is factored in,” said Vince Ambrose, a trader at MF Global in Chicago. “And it doesn’t look coordinated, but the Europeans will move next week, or that’s what they’ve stated. A lot of commodities have sold off dramatically and we’re getting a bounce.”

Wheat futures for December delivery rose 47.25 cents, or 9.2 percent, to $5.6125 a bushel on the Chicago Board of Trade, the biggest percentage gain for the contract closest to expiration since June 30, 1988.

Futures still are down 58 percent from a record $13.495 a bushel on Feb. 27 after growers planted more to take advantage of prices that rose 77 percent last year.

The Baltic Dry Index measuring rates for coal, iron ore, and grains, and other dry goods plummeted below 1000 yesterday, down 92pc since peaking in June.

The daily rental rates for Capesize big ships have dropped $234,000 to $7,340 in weeks, leaving operators stuck with heavy losses on long leases. Empty ships are now crowding Singapore and other global ports.

“It is extremely serious, ” said Jeremy Penn, president of the Baltic Exchange. “Freight rates have never fallen this steeply before. It is telling us that world trade in raw materials has slowed dramatically. Shippers are having genuine difficulty obtaining letters of credit from banks,” he said.

The shipping crisis is another blow to the City of London, which earned £1.3bn in foreign receipts from the industry last year. Maritime services employs 14,500 staff in the UK.

It is also beginning to cause strains in Greece, where the yield spread between Greek 10-year bonds and German Bunds rocketed to a post-EMU record of 123 basis points yesterday.

The upheavals on the bond markets came as Iceland was forced to raise interest rates 6 percentage points to 18pc by the IMF as a condition for its $2bn (£1.3bn) rescue package.

The draconian terms raise fears that the IMF will apply the same medicine to Hungary, Ukraine, Belarus, Serbia, as well as Pakistan and a long list of other countries that may soon need a bail-out. Critics says the Fund risks repeating errors it made in Asia’s 1998 crisis when it imposed a one-size-fits-all contraction policy on the region, causing bitter anti-Western feelings and arguably making matters worse.

A deflationary strategy of this kind could prove counterproductive –or worse – if applied in enough countries simultaneously. It would defeat a key purpose of the rescues, which is to stabilise the global financial system.

The Icelandic krona traded for the first time in a week, but dealers said it was changing hands at roughly 240 to the euro compared with the rate of 152 to the euro fixed by the central bank.

Ominously for Greece, this is the first time its debt has broken its tight linkage with Italian bonds – which traded at spreads of 100 yesterday. The markets are now clearly singling out the country as the most vulnerable of the EMU members.

“This shipping slowdown is a worry for Greece, ” said Chris Pryce, a director of Fitch Ratings, which downgraded the country’s credit outlook last week. Fitch warned that Greece has a public debt of 92pc of GDP, leaving it no safe margin for fiscal stimulus in a downturn.

“Shipping has overtaken tourism to become the country’s biggest industry. They get their finance from other countries, so I think there are going to be a lot of worried bankers in London,” he said.

Trials at Selly Oak hospital, in Birmingham, found copper taps and toilet seats helped significantly reduce the presence of the bug.

Copper is a common constituent in medicines including antiseptic and antifungal creams.

Although it is widely believed copper provides relief to many, including those with arthritis who wear copper bangles, there is no scientific evidence that they work.

It is thought the presence of copper in the hospital wards prevents the germs from breathing and stops them from feeding.

The ten-week trial involved a set of taps, a toilet seat and a push plate on an entrance door on a medical ward being replaced by copper versions.

They were swabbed twice a day for bugs, comparing the results with traditional versions elsewhere in the ward.

It found the copper items had up to 95 per cent fewer bugs on their surface whenever tested.

Professor Tom Elliott, lead researcher and a consultant microbiologist at the hospital, said: “The findings of 90 to 95 per cent killing of those organisms, even after a busy day on a medical ward with items being touched by numerous people, is remarkable.

“I have been a consultant microbiologist for several decades. This is the first time I have seen anything like copper in terms of the effect it will have in the environment.

“It may well offer us another mechanism for trying to defeat the spread of infection.’

The peso closed Wednesday at 3.39 to the dollar after plummeting to 3.44 in the early afternoon amid concern that nationalizing at least $23 billion in private pension funds could drain capital from Argentina’s stock markets.

Analysts see the value of the peso against the dollar — now at its lowest point since December 2002 — as an appropriate thermometer for confidence in the local economy, since spooked Argentines and investors often trade pesos for more stable dollars in times of crisis.

“The government has no idea of the level of uncertainty their decision has provoked in the market,” said economist Fausto Spotorno, an analyst with Orlando Ferreres y Asociados consultancy in Buenos Aires.

The private pension funds maintain liquidity by injecting nearly $324 million monthly into local stocks. Should Congress approve the takeover, this important source of capital may shift to bonds and other investments.

Since the plan was announced by President Cristina Fernandez, the peso has fallen from 3.24 to the dollar.

The inauguration of the new base at Jask was announced by Iran’s naval commander, Admiral Habibollah Sayyari, who said it represented a new line of defence, blocking the entry of the “enemy” into the Persian Gulf and the strategically vital Strait of Hormuz, the gateway through which 40% of the world’s traded oil passes each day.

As international tensions have grown over Iran’s nuclear programme and US allegations of Iranian involvement in Iraq’s insurgency, the US has reinforced its naval presence, keeping two aircraft carriers and their battle groups in the Gulf for long periods this year, instead of one. The USS Ronald Reagan and USS Theodore Roosevelt carriers are currently on patrol, and being used for sorties over Iraq.

Nato and the EU have announced plans to dispatch more ships to the Gulf of Aden in the coming months. The move is aimed at combating Somali-based pirates and escorting food aid deliveries in the Horn of Africa, but the naval build-up has been viewed with suspicion in Tehran.

French president Nicolas Sarkozy has also moved to bolster naval presence in the Gulf, signing a deal with Abu Dhabi to site a new base on the Emirate’s coast. There is an ongoing dispute between Iran and Abu Dhabi over possession of three small islands in the Strait of Hormuz.

Iran’s deputy army commander, Brigadier General Abdul-Rahim Moussavi, commenting on the base’s inauguration, said it would represent an “impenetrable naval barrier”. As speculation has waxed and waned in recent months over the possibility of a US or an Israeli air strike against Iranian nuclear facilities, the Iranian government has threatened a multi-pronged response, including the possible closure of the Strait of Hormuz.

Iranian naval doctrine is focused on asymmetric attacks against western navies using swarms of small high-speed fibreglass boats armed with anti-ship missiles under the command of the Islamic Revolutionary Guard Corps. The IRGC would rely on strength in numbers and surprise, calling it a “presence everywhere and nowhere doctrine”.

Iran’s regular navy is comparatively small, comprising three frigates, two corvettes, and three “kilo” class submarines. It is currently based at the northern shore of the Strait of Hormuz, at Bandar Abbas. Jason Alderwick, a naval expert at the International Institute for Strategic Studies, said Jask would offer some important advantages.

“It is in a better position strategically than Bandar Abbas,” Alderwick said. “It has access to the Arabian sea, so there is deep water access straight away. It has a commanding position vis-à-vis access to the straights, being forward, to the east for them. The real question is what forces are going to be based there? At this stage it’s unclear what the Iranians are going to station there, for example, if they want to re-site their submarines there. That would be significant.”