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The action was the most dramatic effort yet by the central bank to restore calm to global financial markets which have been roiled in the past week by a widening credit crisis.

The decision means that the discount rate, the interest rate that the Fed charges to make direct loans to banks will be lowered to 5.75 percent, down from 6.25 percent.

The Fed did not change its target for the more important federal funds rate, which has remained at 5.25 percent for more than a year.

However, it has been infusing billions of dollars in money into the banking system over the past week to keep that rate from rising above the target level.

In premarket trading, U.S. stock futures reversed previous declines after the Fed’s announcement.

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Gun confiscation is exactly what happened during the state of emergency following Hurricane Katrina in New Orleans, along with forced relocation. U.S. Troops also arrived, something far easier to do now, thanks to last year’s elimination of the 1878 Posse Comitatus act, which had forbid regular U.S. Army troops from policing on American soil.

If martial law were enacted here at home, like depicted in the movie “The Siege”, easing public fears and quelling dissent would be critical. And that’s exactly what the ‘Clergy Response Team’ helped accomplish in the wake of Katrina.

Dr. Durell Tuberville serves as chaplain for the Shreveport Fire Department and the Caddo Sheriff’s Office. Tuberville said of the clergy team’s mission, “the primary thing that we say to anybody is, ‘let’s cooperate and get this thing over with and then we’ll settle the differences once the crisis is over.'”

Such clergy response teams would walk a tight-rope during martial law between the demands of the government on the one side, versus the wishes of the public on the other. “In a lot of cases, these clergy would already be known in the neighborhoods in which they’re helping to diffuse that situation,” assured Sandy Davis. He serves as the director of the Caddo-Bossier Office of Homeland Security and Emergency Preparedness.

For the clergy team, one of the biggest tools that they will have in helping calm the public down or to obey the law is the bible itself, specifically Romans 13. Dr. Tuberville elaborated, “because the government’s established by the Lord, you know. And, that’s what we believe in the Christian faith. That’s what’s stated in the scripture.”

“Specially trained security personnel” will be watching passengers for “micro-expressions” that will reveal treacherous agendas and insidious intentions at airports around the country. These agents, who may literally hold your fate in their hands have been given a lofty, Orwellian name: “Behavior Detection Officers.”

Did anyone ever doubt that George Orwell’s prophecies in “1984” would arrive? In that novel, he wrote, “You had to live—did live, from habit that became instinct—in the assumption that every sound you made was overheard and, except in darkness, every movement scrutinized.”

In the study of “micro-expressions”—yes, it is actually a field of study and there are some who are arrogant enough to call it a science—it has been decided that when people wish to conceal emotions, the truth of their feelings is revealed in facial flashes. These experts have determined that fear and disgust are the key things to look for because they can hint of deception.

Worries about a global credit crisis accelerated the unwinding of yen carry trades, resulting in a rapid appreciation of the Japanese currency.

The Nikkei 225 Stock Average finished down 874.81 points or 5.4 percent at 15,273.68, off the day’s low of 15,262.10. This was its lowest closing level since Aug 7, 2006 when it finished at 15,154.06. The blue-chip index fell 8.9 percent over the week.

The Nikkei is now 16.5 percent below the seven-year high of 18,300.39 touched last Feb 26.

The broader TOPIX index fell 87.07 points or 5.6 percent to 1,480.39, a touch off the intraday low of 1,479.82. The index shed 9.4 percent this week.

Decliners overwhelmed gainers 1,620 to 87, with 17 issues unchanged.

Volume traded rose to 2.94 billion shares from 2.68 billion shares on Thursday.

Kazuhiro Takahashi, equity general manager at Daiwa Securities SMBC, said the Nikkei 225 dropped rapidly in afternoon trade led by the futures market.

‘After the index dropped below the psychologically-important level of 15,500 points, the pace of its fall accelerated, with investors having difficulty finding the right timing to buy on dips,’ he said.

‘The yen’s further appreciation also triggered worries about its impact on exporters’ earnings,’ he said.

The act, signed in 2005 as part of an emergency military spending and tsunami relief bill, aims to weave driver’s licenses and state ID cards into a sort of national identification system by May 2008. The law sets baseline criteria for how driver’s licenses will be issued and what information they must contain.

The Department of Homeland Security insists Real ID is an essential weapon in the war on terror, but privacy and civil liberties watchdogs are calling the initiative an overly intrusive measure that smacks of Big Brother.

More than half the nation’s state legislatures have passed symbolic legislation denouncing the plan, and some have penned bills expressly forbidding compliance.

Several states have begun making arrangements for the new requirements — four have passed legislation applauding the measure — but even they may have trouble meeting the act’s deadline.

The company also billed and was paid $455,009 to ship three machine screws costing $1.31 each to Marines in Habbaniyah, Iraq, and $293,451 to ship an 89-cent split washer to Patrick Air Force Base in Cape Canaveral, Florida, Pentagon records show.

The owners of C&D Distributors in Lexington, South Carolina — twin sisters — exploited a flaw in an automated Defense Department purchasing system: bills for shipping to combat areas or U.S. bases that were labeled “priority” were usually paid automatically, said Cynthia Stroot, a Pentagon investigator.

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C&D’s fraudulent billing started in 2000, Stroot, the Defense Criminal Investigative Service’s chief agent in Raleigh, North Carolina, said in an interview. “As time went on they got more aggressive in the amounts they put in.”

The price the military paid for each item shipped rarely reached $100 and totaled just $68,000 over the six years in contrast to the $20.5 million paid for shipping, she said.

“The majority, if not all of these parts, were going to high-priority, conflict areas — that’s why they got paid,” Stroot said. If the item was earmarked “priority,” destined for the military in Iraq, Afghanistan or certain other locations, “there was no oversight.”

Scheme Detected

The scheme unraveled in September after a purchasing agent noticed a bill for shipping two more 19-cent washers: $969,000. That order was rejected and a review turned up the $998,798 payment earlier that month for shipping two 19-cent washers to Fort Bliss, Texas, Stroot said.

The market appeared to be on an almost relentless downward spiral after problems at Countrywide Financial Corp. confirmed investors’ fears that credit problems are spreading. Moreover, for much of the day, investors shrugged off the Federal Reserve’s injection of $17 billion into the banking system, and appeared to be angling for a rate cut instead.

The yen rose against all currencies bar the Brazilian real and reached the strongest since March versus the euro as traders repaid loans in Japan used to buy higher-yielding assets elsewhere. Australia’s Rams Home Loans Group Ltd. failed to refinance A$6.17 billion ($5 billion) of short-term U.S. loans, helping trigger the biggest slide in Asian shares in a year.

“People are throwing in the towel on carry trades,” Simon Derrick, chief currency strategist at Bank of New York Mellon Corp., said in London. “Two key factors required to make carry trades work, steady or depreciating funding currencies and low volatility, are no longer there.”

“Effective insolvency” would result if creditors force Countrywide to sell assets at depressed prices or investors lose confidence in its ability to raise cash, Kenneth Bruce, a Merrill analyst in San Francisco, said in a research note today.

Shareholders shouldn’t “understate the importance of liquidity,” Bruce wrote. “If liquidations occur in a weak market, then it is possible for CFC to go bankrupt,” said Bruce, who downgraded Countrywide to “sell” from “buy.” The Calabasas, California-based company trades under the ticker CFC.

The decision, made three months ago by Director of National Intelligence Michael McConnell, places for the first time some of the U.S.’s most powerful intelligence-gathering tools at the disposal of domestic security officials. The move was authorized in a May 25 memo sent to Homeland Security Secretary Michael Chertoff asking his department to facilitate access to the spy network on behalf of civilian agencies and law enforcement.

Until now, only a handful of federal civilian agencies, such as the National Aeronautics and Space Administration and the U.S. Geological Survey, have had access to the most basic spy-satellite imagery, and only for the purpose of scientific and environmental study.

According to officials, one of the department’s first objectives will be to use the network to enhance border security, determine how best to secure critical infrastructure and help emergency responders after natural disasters. Sometime next year, officials will examine how the satellites can aid federal and local law-enforcement agencies, covering both criminal and civil law. The department is still working on determining how it will engage law enforcement officials and what kind of support it will give them.