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The Federal Deposit Insurance Corp., whose insurance fund has slipped below the minimum target level set by Congress, could be forced to tap tax dollars through a Treasury Department loan if Washington Mutual Inc., the nation’s largest thrift, or another struggling rival fails, economists and industry analysts said Tuesday.

Treasury has already come to the rescue of several corporate victims of the housing and credit crunches. The government took over mortgage finance companies Fannie Mae and Freddie Mac, and helped finance the sale of investment bank Bear Stearns to J.P. Morgan Chase & Co.

Eleven federally insured banks and thrifts have failed this year, including Pasadena, Calif.-based IndyMac Bank, by far the largest shut down by regulators.

Additional failures of large banks or savings and loans companies seem likely, and that could overwhelm the FDIC’s insurance fund, said Brian Bethune, U.S. economist at consulting firm Global Insight.

“We’ve got a … retail bank run forming in this country,” said Christopher Whalen, senior vice president and managing director of Institutional Risk Analytics.

Treasury Secretary Henry Paulson said Monday that the country’s commercial banking system “is safe and sound” and that “the American people can be very, very confident about their accounts in our banking system.” FDIC officials also have said 98 percent of U.S. banks still meet regulators’ standards for adequate capital.

But fear is growing on Main Street as well as Wall Street about the likelihood of multiple bank failures and the strain that would put on the FDIC.

The fund, which is marking its 75th anniversary this year with a “Face Your Finances” campaign, is at $45.2 billion — the lowest level since 2003. At the same time, the number of troubled banks is at a five-year high.

FDIC Chairman Sheila Bair has not ruled out the possibility of going to the Treasury for a short-term loan at some point. But she has said she does not expect the FDIC to take the more drastic action of using a separate $30 billion credit line with Treasury — something that has never been done.

The FDIC’s fund is currently below the minimum set by Congress in a 2006 law. The failure of IndyMac Bank in July cost $8.9 billion.

Next month, Bair plans to propose increasing the premiums paid by banks and thrifts to replenish the fund. That plan is likely to be approved by the FDIC board, which consists of her, Comptroller of the Currency John Dugan, Thrift Supervision Director John Reich and two other officials.

The Human Papillomavirus (HPV) vaccine — known as Gardasil — is one of five the U.S. Citizenship and Immigration Services recently added to the required list, reports Fox 8 News.

A press release from the U.S. Citizenship and Immigration Services Agency confirms that the requirements for the vaccine went into effect on July 1, 2008.

The regulation represents a total dismissal of the recommendation of Dr. Jon Abramson, chairman of the Centers for Disease Control and Prevention’s advisory committee on immunization practices. In February 2007, Abramson said that he and the 15-member panel at the CDC opposed making Gardasil mandatory because the sexually transmitted HPV is not a contagious disease like measles or chicken pox.

At $162 per dose, the three-dose vaccine is set to make millions in profits for Gardasil manufacturer Merck, a company that has a history of both lobbying intensely for state mandates and entering into crony deals to hoodwink Americans into believing HPV vaccinations are compulsory.

The heads of the Russian central bank, the finance ministry and the financial market regulator met on Tuesday night for an emergency discussion on ways to halt the crisis.

Earlier, trading had been suspended on both the Micex and RTS stock exchanges as investors ignored assurances by Russian officials and a cycle of distrust set in amid liquidity fears.

Margin calls forced domestic traders to liquidate positions and brokers pulled credit lines. At least one Moscow bank failed to meet payments.

The rouble-denominated Micex Index closed 17.75 per cent down, the sharpest one-day drop since the August 1998 financial crisis, while the dollar-denominated RTS index closed down 11.47 per cent, its lowest lvel since January 2006.

Interbank money market rates climbed to 11 per cent, their highest since a mini-banking crisis in summer 2004.

Chris Weafer, chief strategist at Uralsib investment bank: “We’re in completely uncharted territory where the prevailing emotion is of fear and numbnes. No one knows where this could stop”.

Alexei Kudrin, finance minister, insisted that the financial system was not in a systemic crisis but the central bank injected a record $14.16bn in one-day funds into the money market.

The finance ministry also placed an additional R150bn ($5.8bn) in one-month deposits into the banking system. Konstantin Korishchenko, central bank deputy, told Russian news agencies that the bank and the finance ministry could provide a total of $117.6bn in liquidity to the banking sector.

But market players said banks were ceasing to lend to second and third-tier companies and brokers were pulling credit lines. KIT Finance, big Moscow investment house confirmed rumours that it had been unable to make payment on a series of short-term loans.

It said: “In connection with the fact that a series of our clients did not meet their obligations to our bank, we have not met our obligations to our counterparties.

“We recognise our responsibility to our counter-parties and to the market and we are working intensively to resolve the situation.”

Andrei Sharonov, managing director of Troika Dialog, a Moscow investment bank, and a former deputy economic minister, said: “This is a vicious circle,” said , .

“It is a situation of total mistrust. The liquidity crisis is being caused by a crisis of confidence in which people are frightened to borrow and frightened to lend.”

The Federal Reserve and Goldman Sachs and JPMorgan Chase had been trying to arrange a $75 billion loan for the company to stave off the financial crisis caused by complex debt securities and credit default swaps. The Federal Reserve stepped in after it became clear Tuesday afternoon that the banking consortium would not be able to complete the deal.

Without the help, AIG was expected to be forced to file for bankruptcy protection.

The need for the loans became necessary after the major credit ratings agencies downgraded AIG late Monday, a move that likely to have forced the company to turn over billions of dollars in collateral to its derivatives trading partners worsening its financial health.

Until this week, it would have been unthinkable for the Federal Reserve to bail out an insurance company, and AIG’s request for help from the Fed of just a few days ago was rebuffed.

The news came just hours after Fonterra chief executive Andrew Ferrier said he was happy with the way the NZ dairy giant had acted over the crisis, which has affected more than 1200 babies.

“I can look myself in the mirror and say Fonterra acted absolutely responsibly in this one,” he said.

Contaminated milk powder made by Chinese dairy company San Lu was publicly recalled last week.

Dairy co-operative Fonterra – the world’s biggest dairy exporter – paid US$107 million for 43 per cent of San Lu in 2006 and has three directors on the seven-member board.

The two brothers, surnamed Geng, run a milk collection centre in Hebei province and are accused of adding melamine, a chemical used in plastics, to the milk to make it appear higher in protein, the official Xinhua News Agency said.

They sold about three tons of contaminated milk a day, the report said.

Police found the victims’ arms and legs in a pit dressed with Satanic symbols, and investigators say each victim was stabbed 666 times – a number taken to be the sign of the devil.

The four victims were lured in two separate incidents in late June, investigators believe. First the gang approached and dismembered Olga Pukhova and Anna Gorokhova on June 28, before attacking Varya Kuzmina and her boyfriend Andrei Sorokin the next day. All the victims were between the ages of 16 and 17.

Investigators launched a citywide search before discovering the gruesome death site in mid-August.

The victims – all goths themselves – had told their families they were going to a nearby music festival. Instead, police discovered they had all phoned the flat of alleged Satanist cult leader Nikolai Ogolobyak, who lives 250 metres away from the site of the deadly ritual.

Kuzmina reportedly called a friend from Ogolobyak’s apartment late the night of her murder and said: “I don’t like it here, something’s not right. I’ll tell you about it later.”

New York-based Lehman, founded 158 years ago, said early today that it filed for bankruptcy protection after failing to find a buyer. Merrill Lynch, 94 years old and also based in New York, agreed to sell itself to Bank of America Corp. for $50 billion in an emergency deal hashed out yesterday.

“The tectonic plates beneath the world financial system are shifting, and there is going to be a new financial world order that will be born of this,” said Peter Kenny, managing director at Knight Capital Group Inc., the Jersey City, New Jersey-based brokerage that handles about $1 trillion worth of stock transactions a quarter. “It’s an ugly and painful process.”

Credit-default swaps on Morgan Stanley, Goldman Sachs Group Inc., Wachovia Corp. and Citigroup Inc. all traded at record highs as investors sought to hedge against losses on financial companies and to replace hedges they had with Lehman Brothers Holdings Inc., which filed for bankruptcy early yesterday. Contracts on AIG, the biggest U.S. insurer, and Washington Mutual Inc., the biggest U.S. savings and loan, rose further into distressed levels on concern ratings downgrades will cripple the companies.

AIG may have to post as much as $17 billion in collateral after the company was downgraded yesterday, UBS AG analysts said. The biggest U.S. insurer by assets is seeking as much as $75 billion in loans arranged by Goldman Sachs Group Inc. and JPMorgan Chase & Co., after posting $18 billion in losses over the past three quarters, according to two people familiar with the situation.

Stocks erased more than $600 billion in value as financial shares in the S&P 500 decreased the most since at least 1989, according to data compiled by Bloomberg. American International Group Inc. sank 61 percent and Washington Mutual Inc. decreased 27 percent. Concern the U.S. is heading for a recession pushed oil lower, prompting a drop in energy stocks, and sent General Electric Co. down 8 percent.

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The company is considering deploying the supercomputers necessary to operate its internet search engines on barges anchored up to seven miles (11km) offshore.

The “water-based data centres” would use wave energy to power and cool their computers, reducing Google’s costs. Their offshore status would also mean the company would no longer have to pay property taxes on its data centres, which are sited across the world, including in Britain.

In the patent application seen by The Times, Google writes: “Computing centres are located on a ship or ships, anchored in a water body from which energy from natural motion of the water may be captured, and turned into electricity and/or pumping power for cooling pumps to carry heat away.”