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James Hall, the official in charge of the supposedly-voluntary scheme, said the Government would allow people to opt out – but in return they must “forgo the ability” to have a travel document.

Owners of mortgage securities that have been pooled, for example, do not have to reflect the prevailing market prices of those securities each day, as stockholders do. Only when a security is downgraded by a rating agency do investors have to mark their holdings to the market value. As a result, traders say, many investors are reporting the values of their holdings at inflated prices.

“How these things are valued for portfolio purposes is exposed to management judgment, which is potentially arbitrary,” Mr. Rosner said.

At the heart of the turmoil is the subprime mortgage market, which developed to give loans to shaky borrowers or to those with little cash to put down as collateral. Some 35 percent of all mortgage securities issued last year were in that category, up from 13 percent in 2003.

Looking to expand their reach and their profits, lenders were far too willing to lend, as evidenced by the creation of new types of mortgages — known as “affordability products” — that required little or no down payment and little or no documentation of a borrower’s income. Loans with 40-year or even 50-year terms were also popular among cash-strapped borrowers seeking low monthly payments. Exceedingly low “teaser” rates that move up rapidly in later years were another feature of the new loans.

The rapid rise in the amount borrowed against a property’s value shows how willing lenders were to stretch. In 2000, according to Banc of America Securities, the average loan to a subprime lender was 48 percent of the value of the underlying property. By 2006, that figure reached 82 percent.

Mortgages requiring little or no documentation became known colloquially as “liar loans.” An April 2006 report by the Mortgage Asset Research Institute, a consulting concern in Reston, Va., analyzed 100 loans in which the borrowers merely stated their incomes, and then looked at documents those borrowers had filed with the I.R.S. The resulting differences were significant: in 90 percent of loans, borrowers overstated their incomes 5 percent or more. But in almost 60 percent of cases, borrowers inflated their incomes by more than half.

A Deutsche Bank report said liar loans accounted for 40 percent of the subprime mortgage issuance last year, up from 25 percent in 2001.

Securities backed by home mortgages have been traded since the 1970s, but it has been only since 2002 or so that investors, including pension funds, insurance companies, hedge funds and other institutions, have shown such an appetite for them.

Wall Street, of course, was happy to help refashion mortgages from arcane and illiquid securities into ubiquitous and frequently traded ones. Its reward is that it now dominates the market. While commercial banks and savings banks had long been the biggest lenders to home buyers, by 2006, Wall Street had a commanding share — 60 percent — of the mortgage financing market, Federal Reserve data show.

The big firms in the business are Lehman Brothers, Bear Stearns, Merrill Lynch, Morgan Stanley, Deutsche Bank and UBS. They buy mortgages from issuers, put thousands of them into pools to spread out the risks and then divide them into slices, known as tranches, based on quality. Then they sell them.

The single greatest adjustment problem faced by the gifted, however, is their tendency to become isolated from the rest of humanity.

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Prices for credit-default swaps linked to the bonds of the New York investment banks this week traded at levels that equate to debt ratings of Baa2, according to Moody’s Investors Service. For Goldman, Morgan Stanley and Merrill that’s five levels below the actual Aa3 rating on their senior unsecured notes and two steps above non-investment grade, or junk.

Traders of credit derivatives are more alarmed than stock and bond investors that a slowdown in housing and the global equity market rout have hurt the firms. Merrill since 2005 has financed two mortgage lenders that subsequently failed and bought a third, First Franklin Financial Corp., for $1.3 billion.

Previously, at a time when all telecommunications were state-operated, Sweden’s National Defence Radio Establishment (Försvarets Radioanstalt – FRA) regularly tapped telephone lines in and out of the country, says Olofsson.

It was only when Telia became a registered company that the need for legislation arose, she says.

The tape is classified, but Padilla’s attorneys said they believe something happened during that interrogation that could explain why Padilla does not trust them and suspects they are government agents.

Padilla attorney Anthony Natale said in court papers that the March 2, interrogation at the Navy brig in Charleston, S.C., could contain information the government conveyed to Padilla that “directly impacts upon his relationship with his attorneys.”

Prosecutors and the Pentagon have said they cannot find the tape despite an intensive search.

Authorities made 88 video recordings of Padilla being interrogated during the 3 1/2 years he was held at the brig as an “enemy combatant,” officials said. Eighty-seven tapes have been given to the defense, leaving only the last session unaccounted for.

“I don’t know what happened to it,” Pentagon attorney James Schmidli said during a recent court hearing.

U.S. District Judge Marcia Cooke was incredulous that anything connected to such a high-profile defendant could be lost.

In a Securities and Exchange Commission filing, New Century said it was only able to fund some of its loans this week, and its capacity to fund new loans has been “substantially limited” due to problems obtaining financing from lenders.

Aside from deteriorating credit quality, the nation’s second-largest subprime lender faces investor lawsuits and an investigation by federal prosecutors into trading in the company’s stock.

New Century said Thursday it is in “discussions with lenders and other third parties regarding a refinancing and other alternatives to obtain additional liquidity,” adding that “no assurance can be given that any of these discussions will be successful.”

One of the companys lenders extended $265 million in financing secured by New Century’s REIT mortgage loan portfolio and certain residual assets. Proceeds will be used to refinance or satisfy some of the companys existing obligations.

The unnamed lender also provided financing to refinance the rest of the company’s balance of $710 million in mortgage loans, which are currently financed through another lending facility.

A New Century director, David Einhorn, resigned from the company’s board Wednesday night. Einhorn is a principal at hedge fund Greenlight Capital LLC, which owns more than 6 percent of New Century’s stock.

The VIPeR, roughly the size of a small television, was invented as part of Israel’s efforts to develop weaponry that could reduce the risks to its forces from hand-to-hand fighting against Palestinian or Lebanese Hezbollah guerrillas.

The manufacturer, Elbit Systems Ltd., said that the VIPeR’s small size and dual treads enable it to move “undeterred by stairs, rubble, dark alleys, caves or narrow tunnels”.