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Head warns that the UK is about to be hit by a further wave of fraud as the credit crunch bites. He expects a growing number of Ponzi schemes, like that run by Bernie Madoff, to come to light. There has also been a rise in “boiler room fraud”, where investors are conned by smooth-talking salesmen into buying worthless or dubious shares, contrary to expectations that share-buying would fall in the recession.

Head says: “We have seen a rise in the sophistication of this fraud and in the brutality of the crooks when people try to dig themselves out of a hole.

“We have seen people driven to suicide because they have lost everything.”

Manuals confiscated from boiler room fraudsters show how investors are carefully selected to receive harassing phonecalls. Among other recommendations, salesmen are told to avoid talking to women as they “ask more questions than men”.

The fight against fraud has been hampered by investigators’ reluctance to co-operate and share information. This is being addressed with the launch of the National Fraud Reporting Centre and the National Fraud Intelligence Bureau in the next six months.

Any type of blog could be scrutinized, not just ones that specialize in reviews.

So parents keeping blogs to update family members on their child’s first steps technically would fall under the FTC guidelines, though they likely would have little to worry about unless they accept payments or free products and write about them.

But they would need to think twice if, for instance, they praise parenting books they’ve just read and include links to buy them at a retailer like Amazon.com Inc.

That’s because the guidelines also would cover the broader and common practice of affiliate marketing, in which bloggers and other sites get a commission when someone clicks on a link that leads to a purchase at a retailer. In such cases, merchants also would be responsible for actions by their sales agents — including a network of bloggers.

Amazon declined to comment.

Twenty-three of the 30 largest states, which account for more than 88% of the nation’s total population, see welfare caseloads above year-ago levels, according to a survey conducted by The Wall Street Journal and the National Conference of State Legislatures. As more people run out of unemployment compensation, many are turning to welfare as a stopgap.

Unorthodox, untried and, said one Bank of Tokyo Mitsubishi strategist, “in the realms of economic science fiction”, the recommendation has nevertheless begun floating around Tokyo’s corridors of power and economists have described Japan as particularly suitable as a testing ground.

The search for more outré economic policies continues, despite the recent surge in the Nikkei 225 index.The market may be reflecting soaring Chinese investment, rising consumer confidence and other cheerful data but economists see few long-term beacons of hope for Japan.

Other extreme ideas mooted by the financial authorities include a tax on physical currency or introducing one to operate alongside the yen.

All three ideas are based on a theory concerning interest rates and the concept that a nominal rate of zero — as Japan has now lived with for much of the past decade — may be too high. In Japan’s case, the theory would suggest that nominal rates of -4 per cent might be closer to what is required to rescue the economy from another deflationary spiral. Having agreed that this might be necessary, the next question is how it could be imposed.

Several MPs in the ruling Liberal Democratic Party believe the abolition of cash, though politically radioactive, might be technically feasible. Richard Jerram, a senior economist with Macquarie bank, told investors that “the proposal has become practical with the broad penetration of electronic money and credit cards in Japan”.

He said that all the proposals were radical but worth consideration for Japan. Without physical cash, a central bank can set rates exactly where it likes, runs the argument. Mr Jerram said: “At the heart of the problem of achieving negative nominal interest rates is the idea that physical currency is an anonymous bearer bond with a nominal interest rate of zero.” While a central bank can impose positive or negative rates on non-physical assets, transmitting those rates to physical currency is a huge challenge. By permanently removing cash from a system, he added, policymakers are robbed of the excuse that zero is the lowest that nominal rates can go as a deflation-fighting tool.

In theory, many Japanese could easily make the leap into a cashless world. The country has six main competing cashless payment systems, many of them embedded into mobile phones. Including Oyster-type cards issued by public transport companies, industry sources estimate that there are about 120 million cashless payment chips sitting in Japan’s wallets and handbags, waiting to be swiped.

Nevertheless, the country remains a wholeheartedly cash-based consumer society. Currency in circulation is about 16 per cent of its GDP, compared with the levels of 2 to 3 per cent in most developed countries. Reducing that 16 per cent to zero would be a wrench but would come with considerable benefits, Mr Jerram said.

A lack of competition and a surge in revenues from trading foreign currency, bonds and fixed-income products has sent profits at Goldman Sachs soaring, according to insiders at the firm.

Staff in London were briefed last week on the banking and securities company’s prospects and told they could look forward to bumper bonuses if, as predicted, it completed its most profitable year ever. Figures next month detailing the firm’s second-quarter earnings are expected to show a further jump in profits. Warren Buffett, who bought $5bn of the company’s shares in January, has already made a $1bn gain on his investment.

According to the report, authorities made the arrests late Saturday. The names of the other arrested family members were not given.

Prior to news of the arrests, state television had broadcast pictures of Faezeh Hashemi, who is Rafsanjani’s eldest daughter, speaking to supporters of opposition candidate Mir Hossein Mousavi.

Rafsanjani and President Mahmoud Ahmadinejad, who was declared the victor in the June 8 national elections by a landslide despite predictions of a close race, have traded insults in recent weeks.

Rafsanjani intensely dislikes Ahmadinejad, who accused the former president and his family of corruption.

State media broke news of the arrests not long after it updated the death toll from the violent demonstrations that have rocked much of Tehran to at least 19.

State media reported that 10 people died in Saturday’s fighting between protesters and pro-government Basij militia. However, the English-language Press TV, which is only broadcast outside of Iran, reported Saturday’s death toll as 13.

Protesters, supporters of Mousavi who allege the elections were rigged in favour of Ahmadinejad, have taken to the streets every evening since the election, clashing with militia members and riot police.

State media also said that 100 people were injured on Saturday. The deputy chief of police, who was quoted in the story, said officers did not use live ammunition against the crowds who, according to the report, set fire to gas stations and attacked a military post.

Senior MPs and ministers, including Beverley Hughes, David Blunkett and Mark Tami, are accused of over-claiming for council tax on their designated second home over the past four years.

Eric Illsley, the Labour MP, is thought to have made the highest phantom claim – recouping more than £6,000 over and above his council tax bills since 2004. David Willetts and Jeremy Hunt, both shadow ministers, admitted last night that they had over-claimed on their council tax by at least £500 each.

In total, more than 50 MPs are thought to have profited from the dubious claims.

Eighteen have already privately repaid over-claimed council tax to the Commons fees office, including the Labour MPs Linda Gilroy and Michael Meacher.

Some MPs claim round figures – usually £150 or £200 a month – for council tax; others make 12 monthly claims even though their annual bills are divided into 10 instalments.

Until last year, Parliament only required receipts for expenses of more than £250 per month so many MPs did not bother submitting council tax bills before making claims.

Moody’s decision to place California’s general obligation debt on alert for a possible “multi-notch” downgrade stunned state officials.

The state’s current A2 credit rating is Moody’s sixth-highest investment grade and makes California the lowest rated of the 50 states.

The A2 rating is just five notches above speculative status and Moody’s raised the potential for the rating to tumble toward “junk” status if lawmakers fail to quickly produce a budget for Governor Arnold Schwarzenegger to sign.

“If the legislature does not take action quickly, the state’s cash situation will deteriorate to the point where the controller will have to delay most non-priority payments in July,” Moody’s said in a statement.

“Lack of action could result in a multi-notch downgrade,” Moody’s added.

“I cannot remember reading a ratings note that raised the specter of a multi-notch downgrade,” said H.D. Palmer, a spokesman for Schwarzenegger on state finance matters. “It’s another clear warning from the financial markets that there will be substantial and costly consequences if the legislature does not send the governor a budget that he can sign.”

A downgrade could push California’s borrowing costs up at time when state officials expect to issue up to $9 billion in revenue anticipation notes as soon as possible after a budget agreement is notched — a deal whose timing is in doubt.