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“They were the worst three months of all time,” said Rick Sharga, spokesman for RealtyTrac, an online marketer of foreclosed homes.

During that time, 937,840 homes received a foreclosure letter — whether a default notice, auction notice or bank repossession, the RealtyTrac report said. That means one in every 136 U.S. homes were in foreclosure, which is a 5% increase from the second quarter and a 23% jump over the third quarter of 2008.

Nevada continued to be the worst-hit state with one filing for every 23 households. But even tranquil Vermont, where the foreclosure crisis has barely brushed the housing market, saw foreclosure filings jump nearly 170% compared with the third quarter of 2008. Still, that resulted in just one filing for every 5,023 households in the state — the best record in the country.

The RealtyTrac report also unveiled the results for September, and it found that there was slight relief from foreclosure filings. Last month, notices totaled 343,638, down 4% compared with August. Unfortunately, that total accounts for 87,821 homes that were repossessed by lenders.

That deluge contributed significantly to the quarter’s record 237,052 repossessions, a 21% jump from the previous three months. So far this year lenders have taken back 623,852 homes.

“REO activity increased from the previous quarter in all but two states and the District of Columbia, indicating that lenders may be starting to work through some of the pent-up foreclosure inventory caused by legislative delays, loan-modification efforts and high volumes of distressed properties,” James Saccacio, RealtyTrac’s CEO, said in a statement.

Most disturbing is that all foreclosures — not just repossessions — are rampant despite efforts to corral them. Not only has the Obama administration’s Making Home Affordable foreclosure prevention program taken a bite out of REOs but lenders themselves have scaled back repossessions over the past few months to give the program time to work.

And in some low-price markets, lenders simply aren’t following through on foreclosures, according to Jim Rokakis, treasurer for Cuyahoga County, Ohio, which includes Cleveland.

“They’ll even set the date for the sheriff’s sale, but they don’t file the final papers,” he said. “They hold it in abeyance and let the residents stay in the house.”

In ever more frequent cases, delinquent borrowers want out of the mortgage worse than the lenders. There are no firm statistics for it, but many industry watchers claim the percentage of REOs caused by borrowers voluntarily walking away from their homes is skyrocketing.

A study of the trend by the Chicago Booth School of Business and the Kellogg School of Management determined that when home price declines drop home values 10% below the mortgage balances, people start to give up their homes. When “negative equity” approaches 50%, 17% of households default, even when they can still afford their mortgage payments.
No end in sight

The foreclosure crisis may not diminish anytime soon. “The fastest growing area is in the 180 days late-plus category, the most seriously delinquent borrowers,” Sharga said. “It’s going to be a lingering problem.”

Plus, the RealtyTrac statistics may understate the depth of the foreclosure mess because lender and government actions have delayed many filings. As a result, some delinquencies have not been counted on the foreclosure tallies. That means the crisis may not end quickly.

And because there are so many delinquent borrowers, Sharga predicts the banks will be slow to take back their properties and put the repossessed homes back on the market.

Researchers in the U.K. and U.S. were able to create an association in the flies’ brains between an odour and an unpleasant experience, akin to an electric shock. The treated flies avoided the smell as if the bad memory had actually happened.

“Flies have the ability to learn, but the circuits that instruct memory formation were unknown,” Gero Miesenboeck of the University of Oxford said in a release.

Miesenboeck and his colleagues were able to isolate a circuit of just 12 neurons in the flies’ brains that was responsible for the memory.

To “write” the memories on the flies’ brains, the researchers injected them with molecules responsible for nerve impulses. The molecules were wrapped in a chemical “cage” that released the molecules when exposed to light.

The caged molecules were genetically targeted to activate only certain neurons.

So, instead of exposing the flies to an electric shock when a particular odour was present, they shone laser light on the flies, releasing the caged molecules and activating the targeted neurons.

Initially, the researchers made guesses as to which areas of the brain would be responsible for the memory, but through repeated experiments, they were able to pinpoint the 12 neurons responsible.

Miesenboeck said this technique could lead to a greater understanding about how the brain functions by directly stimulating circuits of nerve cells. He said study of the fruit fly brain can reveal a lot about how more complex brains work.

Privacy Commissioner Marie Shroff also raised concerns and recommended a raft of beefed-up safeguards to better protect people.

Parliament’s justice and electoral select committee is considering the Search and Surveillance Bill which is based on a 2007 Law Commission report and also brings together police powers which are scattered through numerous statutes.

It gives police and other law enforcement agencies increased powers such as the ability to compel people to answer questions, clone computer information and makes changes to searches and surveillance.

Several activists, arrested by police in the past, referred to the October 15, 2007 controversial police “anti-terror raids” at Ruatoki in the Eastern Bay of Plenty and Whakatane, Palmerston North, Auckland and Wellington when appearing before the committee today.

Activist Annemarie Thorby made an impassioned submission to MPs saying the new bill gave police powers to search without warrant any arrested or detained person, or if authorities had concerns about safety or felt their investigation would be compromised.

“They can just go straight in, they don’t need a judge’s permission,” she said.

“It’s a nightmare, it’s bordering on a police state.”

From this morning, Harrods will start selling gold bullion and coins over the counter.

In a sign that the credit crisis has left his gilded customer base largely untouched, Harrods owner Mohamed Fayed has teamed up with Produits Artistiques Métaux Précieux (PAMP), the Swiss refiner, to sell gold in the store.

Aimed at private investors, the gold will be sold at the Harrods Bank branch on the lower ground floor of the West London store.

Poor interest rates and falling property prices have left wealthy investors looking for alternative asset classes to put their money into. A weak dollar yesterday pushed the gold price to a record high of $1,072 an ounce.

Chris Hall, head of Harrods Gold Bullion, said: “The financial environment has kindled a new demand for physical gold among private investors in Britain. For many people this is a new and unfamiliar asset class that demands absolute trust. Until now London has had no well-recognised name serving this market.”

“Harrods saw the opportunity to help individuals buy physical gold in a prudent manner.”

Mehdi Bakhordar, managing director of PAMP, said: “Harrods stock our full range and are now the only location in London where investors can purchase a 12.5kg gold bar ‘off the shelf’.”

The decision from Mr Obama comes after he considered a request from General Stanley McChrystal, the US commander in Afghanistan, to send tens of thousands of extra American troops to the country.

Air Chief Marshal Sir Jock Stirrup, the Chief of the Defence Staff, said: “I don’t want to put words in the mouths of the Americans but I am fairly confident of the way it is going to come out.”

An announcement next week could coincide with a meeting of NATO defence ministers in Bratislava, Slovakia, due next Thursday and Friday.

White House press secretary Robert Gibbs dismissed the claims, after President Obama met with his war council for the fifth time to map out a new strategy in Afghanistan.

“I would not put any weight behind the fact that a decision has been made, when the President has yet to make a decision,” he told reporters in Washington.

“I’ve seen the report. It’s not true, either generally or specifically. The president has not made a decision.”