The U.S. government has been using its system of border checkpoints to greatly expand a database on travelers entering the country by collecting information on all U.S. citizens crossing by land, compiling data that will be stored for 15 years and may be used in criminal and intelligence investigations.

Officials say the Border Crossing Information system, disclosed last month by the Department of Homeland Security in a Federal Register notice, is part of a broader effort to guard against terrorist threats. It also reflects the growing number of government systems containing personal information on Americans that can be shared for a broad range of law enforcement and intelligence purposes, some of which are exempt from some Privacy Act protections.

While international air passenger data has long been captured this way, Customs and Border Protection agents only this year began to log the arrivals of all U.S. citizens across land borders, through which about three-quarters of border entries occur.

The volume of people entering the country by land prevented compiling such a database until recently, but the advent of machine-readable identification documents, which the government mandates eventually for everyone crossing the border, has made gathering the information more feasible. By June, all travelers crossing land borders will need to present a machine-readable document, such as a passport or a driver's license with a radio frequency identification chip.

In January, border agents began manually entering into the database the personal information of travelers who did not have such documents.

The disclosure of the database is among a series of notices, officials say, to make DHS's data gathering more transparent. Critics say the moves exemplify efforts by the Bush administration in its final months to cement an unprecedented expansion of data gathering for national security and intelligence purposes.

There may soon be more bank failures and a spate of corporate bankruptcies. That means that unemployment will almost certainly rise - employers have shed nearly half a million jobs this year - and those who keep their jobs will have to cope with fewer hours, measlier raises and evaporating bonuses.

In an election year, sound policy making is almost always trumped by political posturing, making the situation even bleaker. A case in point is the new foreclosure-prevention law. President Bush threatened for months to veto it, before signing it in July. The law’s main feature - allowing the government to guarantee hundreds of billions of dollars in new mortgages to troubled borrowers - won’t take effect until Oct. 1.

The law’s other important feature - a contingency plan for a government bailout of Fannie Mae and Freddie Mac, the nation’s biggest mortgage companies - was a last-minute, crisis-driven addition, the opposite of the ahead-of-the-curve action that is now needed.

The country cannot afford more delay and more posturing. Before the crisis gets any worse, Congress must take several steps.

Share prices dropped sharply on the world's financial markets Tuesday amid fears that the year-long credit crunch is entering a dangerous new phase marked by a severe economic slowdown and failing banks.

The FTSE 100 index fell by almost 2.5% as financial market traders braced themselves for a fresh bout of turbulence triggered by concern that weakening growth in Europe, North America and Asia would add to the problems of western banks.

Analysts pointed to widening spreads in money markets as a sign that the mood was becoming gloomier after a period in which trading conditions had showed tentative signs of returning to normal. A fall of 129.8 points in the FTSE 100 to 5320.4 was mirrored by a drop of almost 3% in Japan, and declines of well over 2% on the Frankfurt and Paris bourses.

Ken Rogoff, the former chief economist at the International Monetary Fund, added to market jitters by warning that the worst of the crisis was yet to come.

"The U.S. is not out of the woods. I think the financial crisis is at the halfway point, perhaps. I would even go further to say 'the worst is to come'," he told a financial conference in Singapore.

That eighteen-wheeled evidence of prosperity shows why the Plains states are a bright spot in the otherwise gloomy national economic picture. Here, the housing market is holding up just fine, the banks are making plenty of loans, and employers keep adding jobs.

The good times in farm country show the difficulty facing policymakers grappling with the nation's economic distress, underscored Tuesday by data indicating the steepest rise in monthly wholesale prices in 27 years and a 17 year low for new housing construction.

The numbers are gloomiest for Sun Belt states with eviscerated housing markets, and there, interest rate cuts and stimulus checks are helping ease the pain. Yet in the area stretching from the oilfields of Texas north to the Dakotas, where the economy is holding up fairly well, those government actions may prove unnecessary - and even contribute to new bubbles.

Retail spending in the middle of the country was strong even before the $600 tax rebates this spring, and low interest rates and a tax provision in the economic stimulus bill are helping to goose already booming sales of farm equipment and pickup trucks.

The price of farmland in Nebraska has doubled in the past three years, primarily reflecting the boom in commodity prices. The increase also reflects the impact of rate cuts by the Federal Reserve that enabled buyers to bid up land with borrowed money. If crop prices drop toward historical norms, it could mean sharp decreases in land prices that would devastate some farmers.

The instant deterioration in relations became evident when Nawaz Sharif, the leader of one of the parties, the Pakistan Muslim League-N, walked out of a meeting here in Islamabad and headed back to his home in Lahore, a four-hour drive away.

Party members said Sharif had delivered an ultimatum to the senior coalition party, the Pakistan Peoples Party, led by Asif Ali Zardari,to consent to the return of the chief justice, Iftikhar Mohammad Chaudhry, within 72 hours, or Sharif’s party would leave the government. Chaudhry was among some 60 judges suspended by Musharraf last year.

Even by the standards of Pakistan’s hard-boiled and volatile political scene, the public discord between the political leaders was surprising, said politicians, a sign that opposition to Musharraf may have been the strongest thread tying them together.

Two days after President Dmitri A. Medvedev promised that the pullout would begin, signs of movement began. A platoon of armored infantry was seen moving away from Georgia through the narrow mountain passes on the Russian side of the border. Near the city of Gori, the Russian and Georgian sides exchanged prisoners, including two Russian pilots who were shot down over South Ossetia.

Meanwhile, however, a Russian engineering platoon was building reinforced trenches for a checkpoint just north of Gori, suggesting that Russian forces expect to be in Georgian territory for some time.

Russian armored vehicles held high ground overlooking Gori and Igoeti, and a network of checkpoints blocked the country’s main highway. Moreover, some of the troops that on Monday had packed up their equipment and said they were ready to leave the city had unpacked and moved back into checkpoints at the city’s edge.

A large part of the conflict area and the region depopulated by civilians fleeing from the fighting remained lawless, and according to several residents in hiding in four villages, in need of water and food.

In January 2007, as years of loose mortgage lending were about to send the nation's housing market into devastating decline, Fannie Mae chief executive Daniel H. Mudd wrote a confidential memo to his board.

Discussing the company's successes, Mudd said one of Fannie Mae's achievements in 2006 was expanding its involvement in the market for subprime and other nontraditional mortgages. He called it a step "toward optimizing our business."

A month later, Fannie Mae outlined plans to further expand its activities in the subprime market. The company recognized the already weak performance of subprime loans but predicted that they would get better in 2007, according to another Fannie Mae document.

Internal documents show that even late in the housing bubble, Fannie Mae was drawn to risky loans by a variety of temptations, including the desire to increase its market share and fulfill government quotas for the support of low-income borrowers.

Since then, Fannie Mae's exposure to loosely underwritten mortgages has produced billions of dollars of losses and sent its stock price plummeting, prompting the federal government to prepare for a potential taxpayer bailout of the company. This month, Fannie Mae reported that loans from 2006 and 2007 accounted for almost 60 percent of its second-quarter credit losses.

Obama had not notified his choice - or any of those not selected - of his decision as of late Monday, advisers said. Going into the final days, Obama was said to be focused mainly on three candidates: Senator Evan Bayh, of Indiana, Virginia Gov. Tim Kaine, and Senator Joseph R. Biden, Jr., of Delaware.

Some Democrats said they still hoped that he would choose Senator Hillary Rodham Clinton, of New York, or Gov. Kathleen Sebelius, who has been under steady consideration by Obama’s campaign.

By all indications, Obama remains likely to chose someone relatively safe and avoid taking a chance with a game-changing selection. A similar strategic choice now faces Obama’s likely Republican opponent, Senator John McCain, of Arizona, who has been under pressure from some Republicans to make a more daring choice.

Italian Prime Minister Silvio Berlusconi's government was engaged Monday in a vigorous damage-limitation exercise after Pope Benedict appeared to lend his moral authority to speculation that Italy was in danger of returning to fascism under the tycoon's hard-line rightwing leadership.

In his usual Sunday address, the Catholic pontiff expressed concern at "recent examples of racism" and reminded Catholics that it was their duty to steer others in society away from "racism, intolerance and exclusion [of others]".

On any other day his remarks might have been seen as no more than a restatement of Catholic doctrine, but they came in the midst of a furious dispute over an editorial published by Italy's best-selling Catholic weekly, Famiglia Cristiana.

In an editorial on Friday condemning recent government moves against immigrants and Roma, the weekly said it was to be hoped that fascism was not "resurfacing in our country under another guise". The censure outraged Berlusconi's supporters, many of whom are pious Catholics.

Instead, along one major road, four Russian tanks rattled a few miles closer to the capital, and then plowed through parked police cars blocking a road as Georgian police officers stood by in dismay.

Elsewhere on the ground in Georgia, no significant troop movement was evident.

American officials said Sunday the Russian military had been moving launchers for short-range ballistic missiles into South Ossetia, a step that appeared intended to tighten its hold on the breakaway territory.

The Russian military deployed several SS-21 missile launchers and supply vehicles to South Ossetia on Friday, according to American officials familiar with intelligence reports. From the new launching positions north of Tskhinvali, the South Ossetian capital, the missiles can reach much of Georgia, including Tbilisi, the capital.

In the mortgage industry, they are called ''liar loans'' - mortgages approved without requiring proof of the borrower's income or assets. The worst of them earn the nickname ''ninja loans,'' short for ''no income, no job, and (no) assets.''

The nation's struggling housing market, already awash in subprime foreclosures, is now getting hit with a second wave of losses as homeowners with liar loans default in record numbers. In some parts of the country, the loans are threatening to drag out the mortgage crisis for another two years.

''Those loans are going to perform very badly,'' said Thomas Lawler, a Virginia housing economist. ''They're heavily concentrated in states where home prices are plummeting'' such as California, Florida, Nevada and Arizona.

Many homeowners with liar loans are stuck. They can't refinance because housing prices in those markets have nose-dived, and lenders are now demanding full documentation of income and assets.

Losses on liar loans could total $100 billion, according to Moody's Economy.com . That's on top of the $400 billion in expected losses from subprime loans.

“His resignation will bring stability hopefully,” said Foreign Minister Shah Mahmood Qureshi. He noted that the stock market, which had suffered in recent sessions, had reacted positively.

Aitzaz Ahsan, the leader of a lawyers’ movement that has been pushing for Musharraf’s ouster and the reinstatement of 57 dismissed judges, said the resignation was a cause “to rejoice.”

The governing coalition that engineered the ouster of Musharraf must now face a range of potential problems, minus the main factor that unified it: opposing him.

The two leading coalition partners, Nawaz Sharif and Asif Ali Zardari, have had a fractious relationship. Sharif is a former prime minister who was deposed by Musharraf in 1999, while Zardari is the widower of Benazir Bhutto, a former prime minister who was assassinated in December.

President Dmitry Medvedev vowed to "begin the withdrawal of the military contingent" starting Monday. Russian leaders have made contradictory and at times clearly false statements about their troops' plans and positions ever since the Georgia operation began. On Saturday, a top Russian general told reporters that his country had no troops in Gori.

During a reporter's 24-hour stay in the city this weekend, Russian soldiers roamed the streets in armored personnel carriers and waved Kalashnikov rifles to prevent entry to a captured Georgian military base that is now the Russian headquarters. Russian soldiers dug fortified positions for tanks along highways east and west of Gori and trucked in television and radio equipment to begin broadcasting in their own language.

"We have stopped firing - be glad about that," a young Russian captain said when asked whether troops would soon withdraw.

Meanwhile, Gori's few remaining Georgians endured pat-downs and vehicle searches when moving around town. Some residents gave shelter to fellow Georgians who arrived from villages to the north with accounts of continuing ethnic violence there. At least 27 civilians have died here in Gori in scattered incidents of violence since the Russian troops arrived, medical officials said, including a doctor killed in front of a hospital by helicopter fire.

A federal appeals court Tuesday struck down a Bush administration rule that prevented states and local governments from imposing stricter monitoring of pollution generated by power plants, factories and oil refineries than required by the federal government.

In a 2 to 1 decision, a panel of the U.S. Court of Appeals for the District of Columbia Circuit found that the Environmental Protection Agency (EPA) rule violated a provision of the Clean Air Act, which requires adequate monitoring of emissions to ensure compliance with pollution limits.

Judge Thomas B. Griffith wrote for the majority that federal standards often are not sufficient to ensure proper monitoring, so states and local governments must be allowed to fill the gap.

"The question in this case is whether permitting authorities may supplement inadequate monitoring requirements when EPA has taken no action," wrote Griffith.

Environmental groups, which brought the lawsuit, said the decision was a significant victory that will help ensure that pollution levels are accurately tracked and reported.

Prices for goods purchased by American businesses surged more than expected in July and have jumped by nearly 10 percent over the last year - the sharpest increase since 1981.

The data released on Tuesday by the Labor Department underscored how rising prices have seeped into much of the economy, led by higher costs for food and energy. Businesses have been absorbing some of the higher costs themselves while passing much of the increase to consumers, intensifying the strain on households just as joblessness expands and spending power shrinks.

“There is virtually nothing that we have touched in the last six months that hasn’t increased,” said Gary O’Neal, a division manager at Central Plains Steel in Wichita, Kansas, which distributes steel to manufacturers of construction and farming equipment. “The prices have increased so rapidly and so high compared to historically where they’ve been. It’s just been uncharted territory.”

Many economists assert that inflation is already being choked off by a slowing global economy. Oil prices have sharply fallen in recent weeks, filtering through the economy in the form of lower prices for gasoline and heating oil. Economic weakness has spread beyond the United States to Europe and Japan, diminishing demand for basic commodities from iron ore to lumber while taking the edge off lofty price increases.

Shares in Freddie Mac and Fannie Mae, the firms that finance more than half the mortgages in the United States, remained under pressure today amid renewed fears that Washington could be preparing an emergency bailout.

Both firms suffered sharp declines on Monday following publication of a report that suggested the U.S. government is pessimistic about Fannie and Freddie's ability to raise further finance on the markets and is preparing to mount a rescue using taxpayers money. According to the report in the U.S. financial weekly Barron's, the injection of capital would be tantamount to a "quasi-nationalization".

Shares in both companies fell to their lowest in two decades on Monday, Freddie dropping 25% and Fannie 22%. By midday on Wall Street today, Freddie shares had fallen a further 6% to $4.14 and Fannie was off 4% at $5.90.

According to Barron's the Treasury is preparing a plan to buy preference shares in the companies that would command such seniority that they would effectively wipe out the value of existing ordinary shares. There would be other conditions tied to the injection of capital. The government would install new management and directors and also curb some of the companies' activities.

Freddie and Fannie occupy a pivotal role in the American financial system. They operate a secondary mortgage market, designed to increase the supply of money available for banks to lend to homeowners, and the collapse of either could provoke systemic failure in the financial markets. The government-sponsored companies buy mortgages from lenders and then package them up and sell them on to financial institutions around the world.

A slow-moving, soggy storm, Fay never achieved hurricane status before coming ashore around 5 a.m. Eastern time near Cape Romano, south of Naples, after shifting slightly east overnight.

“The way the geography of southwest Florida coast is set up, you get just a slight jog to the right and it’s going to come in, and that’s exactly what happened,” said Dennis Feltgin, meteorologist at the National Hurricane Center. “It was so close to the coast.”

Because of that tilt, Fay spent less time over water and less time strengthening than initially forecast. It reached land with sustained winds of 60 miles per hour, too slow to qualify as a hurricane, and with a heavy, soaking rain that could bring as much as 10 inches of water to some areas.

In and around Naples and Fort Myers on Tuesday morning, police officials closed several roads as water reached knee-high depths in some areas. Wind bent street signs and tossed palm fronds and other debris across roads.

Russia's rebirth begins at 5 a.m. on Jan. 1, 2000, in a musty, inconspicuous room in the small Chechen city of Gudermes, on the highway between the capital Grozny and the coastline of the Caspian Sea.

It is the hour of the beginning of Russia's comeback as a major power and of the unparalleled career of a man who his patron, former St. Petersburg Mayor Anatoly Sobchak, accurately described in this way: "He is tough as nails and sees his decisions through to the end."

An investigation by the Government Accountability Office found that almost two-thirds of companies in the United States usually pay no corporate income taxes. Big companies, those with more than $50 million in sales or $250 million in assets, are less likely to avoid Uncle Sam altogether. Still, about a quarter of them report no tax liability either.

The G.A.O., which looked at tax returns from 1998 through 2005, does not tell us exactly how so many corporations managed to avoid the taxman. It simply notes that they were able to record sufficient expenses - salaries, interest and “other deductions” - to cancel out their taxable income.

We find it hard to believe that some two-thirds of American companies fail to turn a profit. What we find easier to believe is that corporations have become increasingly skilled at tax-avoidance strategies, including transfer pricing -  overcharging their American units for products and services provided by subsidiaries abroad to artificially reduce their profits here.

1500 UTC Mon Aug 18 2008
 
at 11 am EDT...1500 UTC...a Hurricane Warning is in effect for the
southwestern coast of Florida from Flamingo to Anna Maria Island.
A Hurricane Warning means that hurricane conditions are expected
within the warning area within the next 24 hours.  Preparations to
protect life and property should be rushed to completion.
 
At 11 am EDT...the Tropical Storm Warning along the Florida East
Coast is extended northward to Cocoa Beach.  A Tropical Storm
Warning is in effect along the Florida East Coast from Cocoa Beach
southward...and along the Florida West Coast east of Flamingo...
including Lake Okeechobee.
 
A Tropical Storm Warning and a Hurricane Watch are in effect for the
Florida Keys from Ocean Reef to Key West...including the Dry
Tortugas and Florida Bay.  A Hurricane Watch remains in effect for
the Florida Mainland east of Flamingo to Card Sound bridge...and
along the Florida West Coast north of Anna Maria to Tarpon Springs.
 
At 11 am EDT...1500 UTC...a tropical storm watch is in effect along
the Florida East Coast north of Cocoa Beach to Fernandina Beach.
 
A tropical storm watch is in effect for the northwestern Bahamas.
 
At 11 am EDT...1500 UTC...the government of Cuba has discontinued
all warnings and watches for Cuba.
 
Interests elsewhere in the Florida Peninsula and the eastern Gulf of
Mexico should monitor the progress of Fay.
 
Tropical storm center located near 23.6n  81.5w at 18/1500z
position accurate within  30 nm
 
present movement toward the north-northwest or 335 degrees at  11 kt
 
estimated minimum central pressure 1003 mb
Max sustained winds  50 kt with gusts to  60 kt.
50 kt....... 65ne   0se   0sw   0nw.
34 kt.......100ne  90se   0sw   0nw.
12 ft seas..100ne 120se   0sw   0nw.
Winds and seas vary greatly in each quadrant.  Radii in nautical
miles are the largest radii expected anywhere in that quadrant.
 
Repeat...center located near 23.6n  81.5w at 18/1500z
at 18/1200z center was located near 23.2n  81.2w
 
forecast valid 19/0000z 24.6n  81.8w
Max wind  55 kt...gusts  65 kt.
50 kt... 60ne  60se   0sw   0nw.
34 kt...100ne  90se  45sw  45nw.
 
Forecast valid 19/1200z 26.2n  82.1w
Max wind  65 kt...gusts  80 kt.
64 kt... 25ne  25se   0sw   0nw.
50 kt... 60ne  60se  30sw  30nw.
34 kt...120ne 120se  60sw  60nw.
 
Forecast valid 20/0000z 27.8n  82.0w...inland
Max wind  50 kt...gusts  60 kt.
50 kt... 30ne  30se  30sw  30nw.
34 kt...120ne 120se  60sw  60nw.
 
Forecast valid 20/1200z 29.3n  81.8w...inland
Max wind  40 kt...gusts  50 kt.
34 kt... 60ne  60se   0sw   0nw.
 
Forecast valid 21/1200z 31.5n  81.5w...inland
Max wind  35 kt...gusts  45 kt.
34 kt... 50ne  50se   0sw   0nw.
 
Extended outlook. Note...errors for track have averaged near 225 nm
on day 4 and 300 nm on day 5...and for intensity near 20 kt each day
 
outlook valid 22/1200z 33.6n  81.5w...inland
Max wind  25 kt...gusts  35 kt.
 
Outlook valid 23/1200z 35.5n  82.5w...inland remnant low
Max wind  20 kt...gusts  25 kt.
 
Request for 3 hourly ship reports within 300 miles of 23.6n  81.5w
 
next advisory at 18/2100z

Investors were concerned once again about the health of financial companies after media reports of further problems in the sector. The Wall Street Journal reported, citing unidentified sources, that Lehman Brothers Holdings Inc. might have to pre-announce its third-quarter results in anticipation of a large loss, while Barron's said the U.S. Treasury might have to recapitalize mortgage financiers Fannie Mae and Freddie Mac.

The continuing bad news about the financial sector isn't coming as a surprise, but it nonetheless is depressing a market that is hoping for concrete signs that banks and brokerages can put the year-old credit crisis behind them and return to significant profit growth.

Even neutral news about the housing market couldn't lift Wall Street's mood. The National Association of Home Builders monthly index on the housing market remained flat at 16 in August. That met the expectations of economists surveyed by Thomson Financial/IFR. Benchmarks related to current sales and expectations of future sales improved, but apparently not enough to move investors to buy.

"It's a very, very fragile balance of powers right now," said Thomas J. Lee, equities analyst at JPMorgan. "But the fact that commodities are declining is overall good for consumers and good for the market."

Musharraf announced his decision to step down in a nationally televised address 10 days after leaders of Pakistan's two ruling coalition parties called for his impeachment. Demand for his resignation became increasingly vocal last week after Pakistan's four provincial assemblies voted overwhelmingly for his ouster.

In the nearly hour-long address, Musharraf struck a defiant and emotional tone, saying that his political opponents had opted for the politics of confrontation over reconciliation; but he said he is stepping down in the interest of maintaining stability in the country.

"I am leaving with the satisfaction that whatever I could do for this country I did it with integrity," said Musharraf. "I am a human, too. I could have made mistakes, but I believe that the people will forgive me."

He also added: "I publicly announced my support of the government and to the prime minister. I told them I am ready to offer my experience. But unfortunately the coalition took me for a problem, not a solution."

The Food and Drug Administration said Monday it has received six new reports of patients developing a dangerous form of pancreatitis while taking Byetta. Two of the patients died and four were recovering.

The drugmakers said in a statement that patients taking Byetta have shown ''very rare case reports of pancreatitis with complications or with a fatal outcome.'' The companies added that diabetes patients are already at increased risk of pancreatitis compared with healthy patients.

The FDA announcement updated an October alert about 30 reports of Byetta patients developing the ailment. Regulators stressed that patients should stop taking Byetta immediately if they develop signs of acute pancreatitis, which can cause nausea, abdominal pain and potentially deadly complications.

More than 700,000 patients worldwide have used the injectable drug since it was launched in June 2005. It is marketed for patients with type 2 diabetes by San Diego-based Amylin and Eli Lilly.

Exports are the bright spot this year in an otherwise bleak economy, but the world is not suddenly snapping up made-in-America goods like aircraft, machinery and staplers. The great attraction is decidedly low-luster commodities like corn, wheat, ore and scrap metal.

This helps explain why manufacturing jobs are continuing to disappear by the tens of thousands and factories are closing even during a mini-boom in exports. While the surge in commodities is a welcome relief, it is an unreliable prop for an industrial power.

“The historical data tell us clearly: don’t get too used to commodity export booms; as any third world country will tell you, they tend to go away pretty quickly,” said L. Josh Bivens, a trade expert at the labor-oriented Economic Policy Institute. 

His point was that while Boeing's aircraft or Caterpillar’s tractors are distinctive and sought after, corn grown in Iowa is virtually interchangeable with corn grown in Argentina or any other bread-basket country. “Over a long period,” said Bivens, “commodities contribute right around zero to export growth.”