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The foreign secretary said in both cases US planes refuelled on the UK dependent territory of Diego Garcia.

He said he was “very sorry” to have to say that previous denials made in “good faith” were now having to be corrected.

The renditions – the transport of terror suspects around the world for interrogation – only came to light after a US records search, he said.

BBC world affairs correspondent Paul Reynolds said the revelations were “a serious embarrassment for the British government”.

Beginning in 1999, the government has entered into a series of single-bid contracts with Halliburton subsidiary Kellogg, Brown and Root (KBR) to build detention camps at undisclosed locations within the United States. The government has also contracted with several companies to build thousands of railcars, some reportedly equipped with shackles, ostensibly to transport detainees.

But Charlton, a 40-year-old account executive at an Irvine, Calif., trucking company, said he had little choice because he and his wife could not keep up with monthly expenses after American Express reduced the limits on three credit cards.

As home prices fall and banks tighten lending standards, more people are doing the same thing: raiding their retirement savings just to get by and spending their nest eggs to gas up SUVs, pay mortgages or put food on the table.

…

Some of the nation’s largest retirement plan administrators, such as Great-West Retirement Services and Fidelity Investments, are seeing double-digit spikes in hardship withdrawals and increases in loan requests, a sharp departure from levels that traditionally varied little.

Administrators say consumers are using retirement savings to pay for unmanageable mortgages, maxed-out credit cards, and costly utilities and groceries.

Foreclosed homes often have an advantage over boarded-up and dilapidated houses abandoned because of rundown conditions: Sometimes the heat, lights and water are still working.

“That’s what you call convenient,” said James Bertan, 41, an ex-convict and self-described “bando,” or someone who lives in abandoned houses.

While no one keeps numbers of below-the-radar homeless finding shelter in properties left vacant by foreclosure, homeless advocates agree the locations—even with utilities cut off—would be inviting to some. There are risks for squatters, including fires from using candles and confrontations with drug dealers, prostitutes, copper thieves or police.

Other precious metals traded mixed, with silver also touching a record-high and platinum retreating from historic levels.

Gold has risen more than 12 percent this year, driven mainly by oil’s ascent to $100 and steep declines in the U.S. dollar. Gold for April delivery jumped as high as $949.20 an ounce in electronic trading on the New York Mercantile Exchange – the highest ever and within striking distance of the psychologically important $1,000 barrier. Earlier Wednesday, gold settled $8 higher at $937.80.

“I would point to oil as the primary driver. Oil and gold seem to be in lockstep right now,” said Jon Nadler, senior analyst of Kitco Bullion Dealers Montreal.

People and livestock are consuming more grain than ever, draining world inventories and increasing the likelihood of shortages, Doyle said yesterday in an interview on Bloomberg Television. Global grain stockpiles fell to about 53 days of supply last year, the lowest level since record-keeping began in 1960, according to the U.S. Department of Agriculture.

“If you had any major upset where you didn’t have a crop in a major growing agricultural region this year, I believe you’d see famine,” Doyle, 57, said in New York.

…

PETER CAVE: Indonesia’s Health Minister has suggested that the United States may be involved in a conspiracy to use the bird flu virus to develop biological weapons.

The extraordinary allegation is included in a new book, endorsed by President Susilo Bambang Yudhoyono, which describes Indonesia’s fight to assert its ownership of its virulent strains of avian influenza.

Concerns over that issue prompted Indonesia last year to stop sharing virus samples with the World Health Organization as Jakarta correspondent Geoff Thompson reports.

GEOFF THOMPSON: No country in the world has been hit by bird flu like Indonesia. Already this year 11 people have died and ten of those were from Jakarta or surrounding areas.

Indonesia’s uniquely virulent strain of H5N1 gave the country “bargaining power” according to Indonesia’s Health Minister Dr Siti Fadilah Supari, in her new book called “It’s Time for the World to Change” and strangely subtitled “The Divine Hand Behind Avian Influenza”.

It’s this bargaining power which led Dr Supari in late 2006 to stop sharing Indonesia’s strains of bird flu with World Health Organization laboratories because of fears that any vaccines developed would then be sold for profit to developing countries with no benefit to Indonesia.

In essence, Indonesia sought to retain the “virus rights” and any profits to be made from its bird flu problem.

Back then on AM, Dr Supari effectively accused Australia of stealing Indonesia’s strain of H5N1 to make bird flu vaccines.

SITI FADILAH SUPARI: I never, I never give permission to send sample to the, send a specimen of the virus to Australia.

GEOFF THOMPSON: Now in her book Dr Supari has revealed, the full scope of the conspiracy she believes she is up against. “Developed countries become richer”, she writes, “because they have the capability to develop the vaccine and control the world”.

Dr Supari expresses alarm at WHO laboratories sharing bird flu virus data with the United States national laboratory in Los Alamos, New Mexico, where nuclear weapons are developed.

“Whether they use is it to make vaccine or develop chemical weapons, would depend on the need and interest of the US Government. It is indeed a very dangerous situation for the destiny of humanity”, she writes and goes on to say “.. it is a matter of choice whether to use the material for vaccines or biological weapon development”.

Despite the clear implication contained in her book, last night Dr Supari told the ABC, she didn’t intend to accuse the United States of being interested in turning H5N1 into a biological weapon.

SITI FADILAH SUPARI: I didn’t know whether our virus will be develop into a vaccine or will be develop into a biological weapon. So just a question – I didn’t blame United States, I didn’t blame any country.

Twelve steps to meltdown

“I would tell audiences that we were facing not a bubble but a froth – lots of small, local bubbles that never grew to a scale that could threaten the health of the overall economy.” So wrote Alan Greenspan in The Age of Turbulence.

That used to be Mr Greenspan’s view of the US housing bubble. He was wrong, alas. So how bad might this downturn get? To answer this question we should ask a true bear. My favourite one is Nouriel Roubini of New York University’s Stern School of Business, founder of RGE Monitor.

Recently, Professor Roubini’s scenarios have been dire enough to make the flesh creep. But his thinking deserves to be taken seriously. He first predicted a US recession in July 2006. At that time, his view was extremely controversial. It is so no longer. Now he states that there is “a rising probability of a ‘catastrophic’ financial and economic outcome”. The characteristics of this scenario are, he argues: “A vicious circle where a deep recession makes the financial losses more severe and where, in turn, large and growing financial losses and a financial meltdown make the recession even more severe.”

Prof Roubini is even fonder of lists than I am. Here are his 12 – yes, 12 – steps to financial disaster.

Step one is the worst housing recession in US history. House prices will, he says, fall by 20 to 30 per cent from their peak, which would wipe out between $4,000 billion and $6,000 billion in household wealth. Ten million households will end up with negative equity and so with a huge incentive to put the house keys in the post and depart for greener fields. Many more home-builders will be bankrupted.

Step two would be further losses, beyond the $250 billion-$300 billion now estimated, for sub-prime mortgages. About 60 per cent of all mortgage origination between 2005 and 2007 had “reckless or toxic features”, argues Roubini. Goldman Sachs estimates mortgage losses at $400 billion. But if home prices fell by more than 20 per cent, losses would be bigger. That would further impair the banks’ ability to offer credit.

Step three would be big losses on unsecured consumer debt: credit cards, auto loans, student loans and so forth. The “credit crunch” would then spread from mortgages to a wide range of consumer credit.

Step four would be the downgrading of the monoline insurers, which do not deserve the AAA rating on which their business depends. A further $150 billion writedown of asset-backed securities would then ensue.

Step five would be the meltdown of the commercial property market, while step six would be bankruptcy of a large regional or national bank.

Step seven would be big losses on reckless leveraged buy-outs. Hundreds of billions of dollars of such loans are now stuck on the balance sheets of financial institutions.

Step eight would be a wave of corporate defaults. On average, US companies are in decent shape, but a “fat tail” of companies has low profitability and heavy debt. Such defaults would spread losses in “credit default swaps”, which insure such debt. The losses could be $250 billion. Some insurers might go bankrupt.

Step nine would be a meltdown in the “shadow financial system”. Dealing with the distress of hedge funds, special investment vehicles and so forth will be made more difficult by the fact that they have no direct access to lending from central banks.

Step 10 would be a further collapse in stock prices. Failures of hedge funds, margin calls and shorting could lead to cascading falls in prices.

Step 11 would be a drying-up of liquidity in a range of financial markets, including interbank and money markets. Behind this would be a jump in concerns about solvency.

Step 12 would be “a vicious circle of losses, capital reduction, credit contraction, forced liquidation and fire sales of assets at below fundamental prices”.

These, then, are 12 steps to meltdown. In all, argues Roubini: “Total losses in the financial system will add up to more than $1,000 billion and the economic recession will become deeper more protracted and severe.” This, he suggests, is the “nightmare scenario” keeping Ben Bernanke and colleagues at the US Federal Reserve awake. It explains why, having failed to appreciate the dangers for so long, the Fed has lowered rates by 200 basis points this year. This is insurance against a financial meltdown.

Is this kind of scenario at least plausible? It is. Furthermore, we can be confident that it would, if it came to pass, end all stories about “decoupling”. If it lasts six quarters, as Roubini warns, offsetting policy action in the rest of the world would be too little, too late.

Can the Fed head this danger off? In a subsequent piece, Roubini gives eight reasons why it cannot. (He really loves lists!) These are, in brief: US monetary easing is constrained by risks to the dollar and inflation; aggressive easing deals only with illiquidity, not insolvency; the monoline insurers will lose their credit ratings, with dire consequences; overall losses will be too large for sovereign wealth funds to deal with; public intervention is too small to stabilise housing losses; the Fed cannot address the problems of the shadow financial system; regulators cannot find a good middle way between transparency over losses and regulatory forbearance, both of which are needed; and, finally, the transactions-oriented financial system is itself in deep crisis.

The risks are indeed high and the ability of the authorities to deal with them more limited than most people hope. This is not to suggest that there are no ways out. Unfortunately, they are poisonous ones. In the last resort, governments resolve financial crises. This is an iron law. Rescues can occur via overt government assumption of bad debt, inflation, or both. Japan chose the first, much to the distaste of its ministry of finance. But Japan is a creditor country whose savers have complete confidence in the solvency of their government. The US, however, is a debtor. It must keep the trust of foreigners. Should it fail to do so, the inflationary solution becomes probable. This is quite enough to explain why gold costs $920 an ounce.

“I just want everybody to be fully aware of my determination to maintain, restore a safe and secure environment wherever in Kosovo,” said General Xavier de Marnhac, commander of the NATO-led peacekeeping force, KFOR.

He said Kosovan and U.N. authority would be restored at the crossings, known as Gate 1 and Gate 3-1, which would reopen once the destroyed customs and police buildings had been repaired.

The test of Western resolve to back up Kosovo’s independence with military force came on Tuesday, two days after Pristina declared its secession from Serbia, a step the West has backed.

NATO said the attacks were clearly an organised challenge.

Destroying the border posts was “perhaps not pretty, but legitimate”, said Serbia’s Minister for Kosovo, Slobodan Samardzic, who added that Serbia planned to take over customs authority in northern Kosovo.

Kosovo’s U.N. administrator Joachim Ruecker said the action was no legitimate at all.

“The Serbian government is bound by their commitment to refrain from all acts that could be seen as encouraging violence and this was really violence so I disagree with that statement,” he told a news conference with KFOR commander de Marnhac.

ORDER RESTORED

The crossings were empty for some hours on Tuesday after Kosovo and U.N. police pulled out and called NATO for help.

Some 40 French and U.S. troops moved in and put coils of razor wire across the Jarinje post, where Serbs had burnt down the buildings and pushed official vehicles over a ravine.

The peacekeepers were harassed by stone-throwing Serb men but held the position without major incident, backed by Polish U.N. riot police. NATO also secured the other crossing near Zubin Potok town.

The NATO force commander accused “some local leaders” in the Serb-dominated north of putting women and children at risk.

“Everybody has been very lucky, the way it went. But the leaders should think very deeply on their responsibility when they trigger this type of demonstration,” de Marnhac said.

Kosovo Prime Minister Hashim Thaci said the comments by the Serbian minister Samardzic “belong to the past and do not at all fit with the current situation”.

Pristina’s declaration of independence from Serbia, quickly recognised by the United States and EU powers, was denounced by Serbia and Russia as an illegal violation of a U.N. resolution on Kosovo, whose population is mainly Albanian.

Serbia has recalled envoys and plans a mass protest march in Belgrade for Thursday but says it will not resort to violence.

The border attacks highlight the challenge facing an EU law-enforcement mission deploying soon to Kosovo, which has been under U.N. administration for nearly nine years following NATO’s air war to push out Serb forces.

The EU mission does not have a U.N. mandate.

Serbia does not recognise its authority, and Serb ally Russia has warned it will not permit any attempts at “repressive measures should Serbs in Kosovo decide not to comply”.

“The EU’s unilateral decision to send a mission … to Kosovo … is in breach of the highest international law,” Russian Foreign Minister Sergei Lavrov said on Wednesday.

Russia, which has no troops in the Balkans, says Western recognition of Kosovo will open a “Pandora’s Box” of separatist tension across Europe.

Pieter Feith, the EU’s new special representative in Pristina, told a news conference Kosovo Serbs should stay and feel welcome in the new republic but the Serb-dominated north would not be permitted to opt out.

“It is the intention of the European Union to deploy its presences … the rule-of-law mission, for police, judges, prosecutors … that we will deploy all over Kosovo,” he said. “And all over the territory of Kosovo includes the north.”

“It should be clear to the Serb community that we are not a threat to their way of life and they should not feel afraid.”

EU defence ministers will review security arrangements in the Balkans on Thursday.