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China announced a nationwide crackdown on slavery and child labor last year after reports that hundreds of poor farmers, children and mentally disabled were forced to work in kilns and mines in Shanxi province and neighboring Henan.

“The bustling child labor market (in Sichuan province) was set up by the local chief foreman and his gang of 18 minor foremen, who each manage 50 to 100 child labourers,” the Southern Metropolis Newspaper said.

“The children generally fall between the ages of 13 and 15, but many look under 10,” it added.

The newspaper said 76 children from the same county, Liangshan, had been missing since the Chinese Lunar Year festival in February, 42 of whom had already left the region to work.

“The youngest kids found in the child labor market were only seven and nine years old,” it said.

Among the hardest hit states were Nevada, Florida and, in particular, California, where Stockton led the nation with a foreclosure rate that was 6.6 times the national average, Irvine, Calif.-based RealtyTrac Inc. said.

Nationwide, 649,917 homes received at least one foreclosure-related filing in the first three months of the year, up 112 percent from 306,722 during the same period last year, RealtyTrac said.

The latest tally also represents an increase of 23 percent from the fourth quarter of last year.

RealtyTrac monitors default notices, auction sale notices and bank repossessions.

All told, one in every 194 households received a foreclosure filing during the quarter. Foreclosure filings increased in all but four states.

The most recent quarter marked the seventh consecutive quarter of rising foreclosure activity, RealtyTrac noted.

“What would normally alleviate the foreclosure situation in a normal market is people starting to buy properties again,” said Rick Sharga, RealtyTrac’s vice president of marketing.

However, the unavailability of loans for people without perfect credit and a significant down payment is slowing the process, he said.

Shell made profits of $7.8bn (£3.9bn) in the first three months of the year, up from $6.9bn a year ago.

And rival BP saw its profits rise 48% to $6.588bn (£3.31bn), from $4.4bn.

In January, Anglo-Dutch firm Shell reported annual profits of $27.56bn (£13.9bn) for 2007, a record for a UK-listed company.

The episode will be seen as comparable to “the great contraction” of the 1930s and “the great inflation” of the 1970s, Vincent Reinhart said Monday at a panel organized by the American Enterprise Institute, a conservative-leaning think tank where he is now a scholar. Until mid-2007, Mr. Reinhart was director of monetary affairs at the Fed and secretary of its policy-making panel, the most senior position on the Fed’s Washington-based staff.

His appraisal is one of the harshest yet by a high-profile observer. The Fed last month lent Bear Stearns money to prevent a bankruptcy filing and then financed $29 billion of its assets to facilitate a takeover by J.P. Morgan Chase & Co. Former Fed Chairman Paul Volcker has said the move went to “the very edge of [the Fed’s] lawful and implied powers,” although he has since said that that wasn’t meant as a criticism. Congress and analysts have deferred to the Fed’s judgment.

Mr. Reinhart said the bailout “eliminated forever the possibility the Fed could serve as an honest broker.” In 1998, the Fed coaxed private creditors of Long-Term Capital Management to bail out the hedge fund but didn’t have to put up its own money. If it ever tries a similar maneuver on a Wall Street cohort, he said, “The reasonable question any person in the room will ask is, ‘How much will you contribute to the solution?'”

At issue is a fundraising luncheon held in March at London’s Spencer House, during McCain’s swing through the United Kingdom. An invitation to the event lists Lord Rothschild and Nathaniel Rothschild as hosts, and indicates the event was made possible with their “kind permission”.

Judicial Watch, a Washington organisation instrumental in the March release of Hillary Clinton’s White House schedules, has asked US election monitors to investigate whether the Rothschilds improperly sponsored the fundraiser. US political campaigns are forbidden from accepting contributions from foreign nationals.

“The question is whether or not the Rothschilds paid for the event, the venue, the catering, or any other related costs,” said Judicial Watch president Tom Fitton.

Tickets to the event cost $1,000 to $2,300, and the luncheon dress code was “lounge suits,” the Washington Post reported in March.

The McCain campaign did not immediately return a call seeking comment.

Judicial Watch also complained to the US election authority, the federal election commission, about Elton John’s involvement in Clinton’s campaign. The group alleged the British rocker broke US campaign laws by performing at a fundraiser for the New York senator. The Clinton campaign argued US law allowed the British musician to volunteer his time and solicit Americans for contributions.

Montag, 51, who retired last year as Goldman’s head of sales and trading in the Americas, will report directly to Thain, New York-based Merrill said today in a statement. He will start Aug. 4, company spokeswoman Jessica Oppenheim said.

Merrill’s management ranks have thinned since Thain, 52, took over as CEO on Dec. 1, as executives promoted under former CEO Stan O’Neal stepped down or were forced out. Two weeks ago, Thain said that “filling out the senior management team” was his top strategic priority in the U.S.

Montag, who worked at New York-based Goldman for 22 years, takes over Merrill’s trading business after more than $30 billion of writedowns on subprime mortgages and bonds saddled the 84-year-old firm with record losses and led to O’Neal’s ouster.

The report, in Saturday’s Wall Street Journal, cited people familiar with the matter.

It said Wachovia is talking to the Justice Department about reforming its compliance system and faces a possible deferred-prosecution deal that would give the government significant oversight of the bank. A Wachovia representative said the company is cooperating with the investigation, the report added.

The probe is related to the alleged laundering of drug revenue by Mexican and Colombian money-transfer companies, the report said. Wachovia is one of several large banks that officials have investigated because of relationships with such companies, according to the report. Wachovia and “some other” U.S. banks cut off their ties to Mexican foreign-exchange companies in December and January following inquiries in the government’s investigation, the report added.

In September, a U.S. registered Gulfstream II business jet carrying 3.3 tons of cocaine crashed in Mexico’s Yucatán Peninsula. A year earlier, a DC-9 aircraft loaded with 5.7 tons of cocaine from Venezuela was seized in Mexico by Mexican soldiers.

Both of the planes were purchased through a Mexican exchange house called Casa de Cambio Puebla, and that’s turning into a problem for Wachovia, the fourth biggest bank in the United States, and Harris Bank, the Chicago unit of Canada’s BMO Financial Group.

Last week, the Mexican government, working in cooperation with U.S. law enforcement, raided Casa de Cambio Puebla’s offices and moved to put the exchange house out of business. Mexican authorities detained a branch manager, Pedro Alatorre, and a compliance officer, Amador Vazquez, saying they were under investigation for drug-money laundering.

Federal investigators in Mexico released information this week connecting Alatorre to an account at Harris Bank holding $2.7 million and also described Alatorre as a financial operator for the Pacific Cartel, headed by notorious fugitive Joaquín “el Chapo” Guzmán Loera. The Mexican raid explains why the U.S. government froze $11 million of Casa de Cambio Puebla’s assets in 23 different accounts at Wachovia branches in Miami and London in May.

In filings made in federal court in Miami, Frank Rubino, Casa de Cambio Puebla’s Miami lawyer, said Assistant U.S. Attorney Andrea Hoffman told him the government had frozen the money because Casa de Cambio Puebla “was involved in money laundering.” In an interview, Rubino said he did not understand the money-laundering accusation. Another court document shows the funds were seized as part of a case being run by the Drug Enforcement Administration. The filings came to light because Casa de Cambio Puebla sued the U.S. government in federal court in Miami to release frozen funds.

Casa de Cambio Puebla was founded in 1985 by Mexican businessmen, say court filings, and licensed by Mexican banking regulators. It has 17 branch offices throughout Mexico, 240 employees, and maintained 46 U.S. dollar interbank accounts at Wachovia branches in Miami and New York. Wachovia and Harris Bank declined to comment.

“If these allegations are in fact true, Mr. Alatorre did these acts without the knowledge, permission or consent of the management/ownership of Casa de Cambio Puebla,” Rubino said in a written statement to Forbes.

The feds are targeting American banks connected to Mexican exchange houses used to launder drug proceeds. In September, Union Bank of California, a unit of San Francisco-based UnionBanCal, agreed to pay $31.6 million in fines and penalties to settle drug-money laundering issues stemming from its business with Mexico-based Ribadeo Casa de Cambio.

Union entered into a deferred prosecution agreement with the Justice Department on charges of failing to maintain an effective anti-money-laundering program. The feds identified at least $22 million in drug proceeds that flowed through Mexican exchange-house accounts at Union Bank of California. Mexican regulators shuttered Ribadeo Casa de Cambio, but not before its president, Francisco Anton Perez, was found shot to death in the back of a car.

The U.S. government has increasingly been concerned about money-laundering efforts exploiting the relationship between the U.S. financial sector and Mexican exchange houses, the regulated casas de cambio and the more loosely watched centros cambiarios. Last year the Treasury Department issued an advisory warning of the “potential misuse of relationships with U.S. financial institutions by certain Mexican financial institutions, including Mexican casas de cambio.”

The advisory was billed as part of the U.S. government’s effort to “ensure that U.S. financial institutions are not used as a conduit for the laundering of proceeds from narcotics trafficking.” The Treasury Department identified six casas and centros last year used by the Arellano Felix drug cartel to launder proceeds smuggled across the border. In 2005, the feds highlighted nine casas that helped the same cartel launder $120 million.

Mexican President Felipe Calderon has bolstered efforts to clamp down on drug cartels and their financial networks. But there is concern Calderon’s crackdown will stress a Mexican economy that relies on money transfers from Mexicans working in the U.S. back to their families.