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Significant gains by the U.S. dollar against the euro also contributed to slumping oil prices.

By midday in Europe, light, sweet crude for November delivery was down $4.03 to $89.85 a barrel in electronic trading on the New York Mercantile Exchange. Earlier in the session, the price fell as low as $89.07 a barrel before recovering slightly.

On Friday, the November contract lost 9 cents to close at $93.88 a barrel.

In London, November Brent crude fell $3.64 to $86.61 a barrel on the ICE Futures exchange.

Oil prices have tumbled nearly 40 percent since peaking in July. The Nymex front-month contract last traded this low in early February.

The drop came as world stock markets plunged amid growing investor anxiety that the U.S. bad debt crisis is enveloping Europe. Germany announced Sunday a bailout package totaling euro50 billion ($69 billion) for Hypo Real Estate, the country’s second-biggest commercial property lender, part of a scramble by European governments to save failing banks.

In a surprisingly stark admission, the National Police Agency (NPA) says that it is locked in a battle for the economic soul and international reputation of Japan.

Police investigations suggest that the yakuza have become voracious traders and manipulators of listed Japanese shares, and, via a network of about a thousand apparently legitimate front companies, occupy big positions on the shareholder registers of many companies that may not even be aware of the connection.

According to one veteran expert on the yakuza, the new activities of the nation’s largest crime syndicates have effectively turned the mob into the biggest private equity firm in Japan.

In a White Paper on the subject, the NPA gives warning that the yakuza’s switch from old-fashioned crime rackets such as drugs and prostitution to mainstream financial markets is “a disease that will shake the foundations of the economy”.

Japan’s Securities and Exchange Surveillance Commission has compiled a watch list of hundreds of companies suspected of direct or indirect links to mafia money. The list, which was drawn up in private but has been seen by The Times, includes more than 200 publicly traded companies, many of which are household names in Japan.

The issue has become so acute that the Osaka Stock Exchange has been forced to introduce an entirely new screening system to establish which companies have direct mob links or large quantities of yakuza money on their shareholder registers. Scores of companies, one exchange source said, faced the threat of being delisted.

As well as flagging the risks of a yakuza invasion of financial markets, the police’s report also sounds alarm bells over the property and construction sectors. The greatest risk, it says, is that the yakuza gangs match the operational strategies of mainstream global corporations and outsource much of their financial chicanery to “co-operative groups”.

Yet even as police and regulators rush to address soaring yakuza interference in the securities industry, close observers of the Japanese mafia believe that the problem now may be beyond control. The sophistication of the crime gangs has grown exponentially in recent months. Many have begun to hire newly unemployed traders, who have been laid off by large financial houses feeling the squeeze of the credit crunch.

According to one in-depth investigation by NHK, the state broadcaster, a few yakuza gangs even operate their own stock-dealing floors, where millions of dollars of shares are traded every day. A newly published book on the subject – Yakuza Money – claims that the presence of skilled former bankers, stockbrokers and accountants on the yakuza’s extended payroll has dramatically increased the mob’s income stream and made it virtually impossible to discern the difference between legal and illegal funds as they flow through the Japanese markets.

Joshua Adelstein, an author and consultant on the yakuza, says that one of the key recent developments has been the emergence of mob-backed auditing firms. It is by getting these auditing firms to sign-off false company accounts, he said, that the yakuza were able to manipulate both the apparent earnings and stock prices of numerous small listed companies.

The warning comes as California is close to running out of cash to fund day-to-day government operations and is unable to access routine short-term loans that it typically relies on to remain solvent.

The measure passed the Senate 74-25, with a majority of Democrats and Republicans voting in favor – among them presidential nominees Barack Obama and John McCain. The centerpiece of the legislation gives the government the authority to buy up billions of dollars of the toxic assets, primarily mortgage-backed securities, that have poisoned financial markets and threaten to contaminate the rest of the economy.

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The tax breaks and accounting rule changes for Hollywood were seen as aimed at two Southern California Democrats – Reps. Adam Schiff and Brad Sherman – who voted against the plan. Sherman, who led the defection of a group of Democratic skeptics, insisted he would not be enticed to vote for the rescue plan.

As the world held its breath on the fate of America’s $700 billion bank bailout plan, President Sarkozy was seeking the backing of European leaders for his own lifeboat.

In a rare public intervention, the spy author criticised ministers for voting to extend the time limit that terror suspects can be held without charge to 42 days.

His comments come only weeks ahead of a key vote in the House of Lords that could see peers throw out the Government’s controversial 42-day proposals.

The writer, who admitted he has a reputation as “an angry old man”, said he was furious that the Government had been allowed to get away with a sustained attack on civil liberties.

“Partly, I’m angry that there is so little anger around me at what is being done to our society, supposedly in order to protect it,” said the 76-year-old in an interview in Waterstone’s magazine.

“We have been taken to war under false pretences, and stripped of our civil rights in an atmosphere of panic. Our lawyers don’t take to the streets as they have done in Pakistan.

“Our MPs allow themselves to be deluded by their own spin doctors, and end up believing their own propaganda.”

He added: “We haul our Foreign Secretary back from a mission to the Middle East so he can vote for 42 days’ detention.

“People call me an angry old man. Screw them. You don’t have to be old to be angry about that. We’ve sacrificed our sovereignty to a so-called ‘special relationship’ which has nothing special about it except to ourselves.”

With Wachovia already looking for a merger partner, the Federal Deposit Insurance Corp., in consultation with other regulators, required the bank to reach a sale to Citigroup on Monday morning.

The FDIC, for the first time, used legislative authority created in 1991 to help it deal with a “very large complex bank failure” on short notice. It requires approval from heavy hitters – two-thirds of FDIC board members, two-thirds of Federal Reserve board members as well as the Treasury secretary, who must consult with the president.

“When Wachovia opened Monday it would not have had a source of liquidity,” a source familiar with the situation said. “It really could not have opened under those circumstances. That’s why (the FDIC) put together the assistance package.”

The new details show the precarious situation Wachovia faced over the weekend as it rushed to find a suitor, even as Congress debated a possible bailout plan. Intense negotiations in New York included a decision by Wells Fargo to pass on a deal Sunday and frequent consultations with the Office of the Comptroller of the Currency, the bank’s primary regulator, and the FDIC, sources said. In the end, the FDIC, which insures customer deposits, forged the deal because it has “the pocketbook,” a source said.

In the resulting agreement, Citigroup agreed to buy Wachovia’s banking operations and most of its assets, with assistance from the FDIC. The agency will pick up losses above $42 billion on a $312 billion loan book in exchange for $12 billion in Citi securities.

Inside Wachovia, executives started noticing customers withdrawing money on Friday morning, following the failure of Washington Mutual on Thursday. “The so-called silent run on the bank – it’s real,” Carlos Evans, Wachovia’s wholesale banking executive, said in an interview. “When Congress failed to pass the ($700 billion bailout) proposal, when WaMu collapsed, you could see the money flowing. My computer screen was lighting up.”

FBI Special Agents Mark Rossini and Douglas Miller have asked for permission to appear in an upcoming public television documentary, scheduled to air in January, on pre-9/11 rivalries between the CIA, FBI and National Security Agency.

The program is a spin-off from The Shadow Factory: The Ultra-Secret NSA from 9/11 to the Eavesdropping on America, by acclaimed investigative reporter James Bamford, due out in a matter of days.

The FBI denied Rossini and Miller permission to participate in the book or the PBS “NOVA” documentary, which is also being written and produced by Bamford, on grounds that the FBI “doesn’t want to stir up old conflicts with the CIA,” according to multiple reliable sources.

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Pre-9/11 intelligence mishaps have been generally attributed to bureaucratic screw-ups — a “failure to connect the dots,” exacerbated by spy agency rivalries.

But Rossini and Miller, who were assigned to the CIA-run Counterterrorist Center during the run-up to the 9/11 attacks, are prepared to describe on camera how the CIA blocked them from sharing crucial intelligence with FBI headquarters – and then later pressured them not to tell the truth to investigators.

The first allegation is not entirely new, having been reported by author Lawrence Wright in his 2006 book, The Looming Tower: Al Qaeda and the Road to 9/11, among other places.

But what is new is that Rossini and Miller — who still hold sensitive jobs in the FBI, and are identified here for the first time — are prepared to say publicly that, under pressure from the CIA, they kept the full the truth from the Justice Department’s Inspector General, which looked into the FBI’s handling of pre-9/11 intelligence in 2004.

“There was pressure on people not to disclose what really happened,” said sources close to the IG investigation.

Bachelor Paul Kidd, 55, groomed at least one of his teenage victims for sex by taking him for tea with the Queen Mother at Clarence House, it has emerged.

To the public, he had been the urbane gent who waited on the Royals for nine years – first the Queen at the Palace and then her mother.

He often publicly gushed about his blue blood employers talking of the Queen as ‘courteous and genuinely caring.’

But behind the facade, Kidd was leading a secret double life as a serial child abuser who molested a string of boys over a 30 year period.

He was finally exposed after one of his victims read a newspaper article in which he boasted about his links to the Royals and talked fondly of Princess Diana and her musical tastes.

Police raided his two bedroom home in St Johns Street, Stalybridge, where they found almost 19,000 pornographic pictures and videos of children.

Included in the haul were some nude pictures of a teenager who officers were able to trace and interview.

Some images were hidden in a safe while others were encrypted on his computer.

Kidd admitted 29 sex charges involving three boys namely indecent assault, sexual activity with a child and the possessing and making of indecent images of children between December 1974 and January 2008.

An accomplice David Hobday, 56, of St Johns Street, Dukinfield admitted seven charges involving one of the victims of sexual activity with a child and possessing indecent images. Both men face a maximum 14 years in jail.

A police source said: ‘Kidd was a very accomplished groomer of children.

‘Given that he has been behaving like this for 30 years the likelihood is there could be many other victims out there who have not yet come forward.

‘This man used his Royal connections to impress and seduce young boys. He even had autographed pictures of Manchester United players on his walls at home.

‘He was acting with at least one other man and it’s possible he could have been communicating with many other paedophiles over many years.

‘These offences are probably just the tip of the iceberg.’

Kidd had honed his skills as a silver service waiter when he joined the Royal Navy after leaving school – looking after the captain and officers.

During his naval service he visited 22 countries around the world. In 1976 he was appointed as butler to the Queen at Buckingham Palace and served there for six years until being transferred to Clarence House where he served the Queen Mother.

During his years in Royal service, he was said to have met and looked after three American Presidents including Jimmy Carter and Ronald Regan plus many other Heads of State from around the world.

He was also said to have worked closely with Princess Diana at Buckingham Palace in the six months prior to her wedding to Prince Charles.

In 1985 he gave up Royal Service due to a cancer scare but then started charging up to £4,000 a time as an after dinner speaker talking about his work with the Royal Family.

He ran a series of lectures including one he called: An uncomfortable experience for the Queens page boy.

Kidd also starred on numerous TV chat shows in the UK and USA including the Caroline Rhea show in New York.

He also appeared on stage with Hollywood actor Robin Williams at the Nemacolin Spa & Resort Centre in the USA.

He joined Robert Kilroy Silk’s UK Independence party standing unsuccessfully as a candidate in local council elections.

In one interview Kidd said of the Queen: ‘She was always very courteous, but she only ever addressed me as ‘Kidd’ – never by my first name.

‘She deals with people in a genuinely caring manner. Her children are the future of the country, they cannot be brought up in a namby-pamby manner.

‘But in private, as a mother and grandmother, she dotes on the children.’

Police began investigating Kidd earlier this year after a victim, now 41 read a newspaper article about Kidd in which he talked about Princess Diana on the 10th anniversary of her death.

The victim was thought to be so disgusted by his bragging, he went to police and told officers how he was 14 when he was abused by Kidd after meeting him through a CB radio group.

Kidd introduced the lad to his Royal employers and took him for tea with the Queen Mother in the late 70s.

It is believed the victim even spoke to the Queen Mother – at a time when the late Royal had no idea he was being secretly abused by her servant.

It emerged he had met Kidd though a religious group when he was 14 and he was sexually accused and passed onto another paedophile.

A third victim later came forward to say he was abused in the 1980s when he was 15 after meeting him when Kidd was training to be a nurse.

At Minshull Street Crown Court, Manchester, Kidd and Hobday were told they would be sentenced on November 20 after probation officers complete a report assessing whether they are a risk to the public.

Various other charges will be allowed to lie on file.

The Nasdaq issued a statement Tuesday afternoon saying that all trades in Google’s shares made at or above $425.29 and at or below $400.52 between 3:57 and 4:02 p.m. would be canceled. The statement said Google’s official closing price would be adjusted to $400.52, an increase of 5 percent over the previous day.

In a message board on the NasdaqTrader Web site, the exchange said it was also adjusting the closing value of the Nasdaq 100 Index from 1,584.60 to 1,594.63. It said other indexes would also be changed to reflect Google’s revised closing price. Last-minute trades in Rohm Hass, a chemical maker, were also canceled.

The exchange declined to provide further details. Google declined to comment.

The Nasdaq has periodically been forced to cancel erroneous trades caused by computer glitches. In March 2007, the Nasdaq Composite Index leaped more than 7 percent after shares in the Donegal Group, an insurer that is a component of the index, appeared to soar 11,000 percent. Those trades were also canceled.