Market crash 'could hit within weeks', warn bankers

A more severe crash than the one triggered by the collapse of Lehman Brothers could be on the way, according to alarm signals in the credit markets.

By Harry Wilson, and Philip Aldrick

Insurance on the debt of several major European banks has now hit historic levels, higher even than those recorded during financial crisis caused by the US financial group's implosion nearly three years ago.

Credit default swaps on the bonds of Royal Bank of Scotland, BNP Paribas, Deutsche Bank and Intesa Sanpaolo, among others, flashed warning signals on Wednesday. Credit default swaps (CDS) on RBS were trading at 343.54 basis points, meaning the annual cost to insure £10m of the state-backed lender's bonds against default is now £343,540.

The cost of insuring RBS bonds is now higher than before the taxpayer was forced to step in and rescue the bank in October 2008, and shows the recent dramatic downturn in sentiment among credit investors towards banks.

"The problem is a shortage of liquidity – that is what is causing the problems with the banks. It feels exactly as it felt in 2008," said one senior London-based bank executive.

"I think we are heading for a market shock in September or October that will match anything we have ever seen before," said a senior credit banker at a major European bank.

Despite this, bank shares rebounded on Wednesday, showing the growing disconnect between equity and credit investors. RBS closed up 9pc at 21.87p, while Barclays put on 3pc to 149.6p despite credit default swaps on the bank hitting a 12-month high. This mirrored the US trend, with Bank of America shares up 10pc in late Wall Street trade after a hitting a 12-month low on Tuesday over fears that it might have to raise as much as $200bn (£121bn). As with the European banks, the rebound in the share price was not reflected in the credit markets, where its CDS reached a 12-month high of 384.42 basis points.

European stock markets joined in the rally. The FTSE closed up 1.5pc at 5,206 on hopes the chance of a global recession had diminished. European shares hit a one-week high, with Germany's DAX closing up 2.7pc and France's CAC 1.8pc higher. The Dow Jones index edged higher on strong durable goods orders data as markets began to accept that the US Federal Reserve is unlikely to signal fresh stimulus at Jackson Hole this Friday.

Even Moody's decision to downgrade Japan's sovereign credit rating by one notch to Aa3 did little to damage global sentiment, although Tokyo's Nikkei closed down just over 1pc.

As stock market nerves settled, gold - which has recorded steady gains recently as investors seek a safe haven - fell 5.3pc to $1,777 in London.

Hurricane Irene: Could Be Category 4 By Thursday

By LINSEY DAVIS, JESSICA HOPPER (@jesshop23) and CHRISTINA NG

Hurricane Irene's fury is growing and the National Hurricane Center warned today that the storm could be upgraded from its current level of Category 3 to a more ominous Category 4 by Thursday.

The core of the hurricane is expected to move across the southeastern and central Bahamas tonight, with maximum winds near 120 mph.

As the storm clears the island and continues over the warm water of the Atlantic, its wind speed is expected to strengthen and the size of the storm could increase, the Hurricane Center predicted.

"Warm water is essentially like their fuel. It helps them strengthen and it's got plenty of that ahead of it, at least in the next few days," said John Cangialosi, a hurricane specialist at the National Hurricane Center.

The threshold for a category 4 is wind speeds of at least 131 mph.

Forecasters predict Irene could hit the Outer Banks of North Carolina on Saturday, move up to the mid-Atlantic region including Maryland, Delaware and New Jersey late Saturday or early Sunday, and hit New England late Sunday.

Hurricane Irene's Fury Is Growing, Possibly Becoming a Category 4 Storm

The storm is shaping up to be the most powerful hurricane to strike the East Coast of the United States in years and thousands of people in Ocracoke Island, N.C., have been ordered to evacuate as the storm bore down on the frgile islands of North Carolina's Outer Banks. The island is reachable only by ferry.

Cangialosi also said that hurricanes fluctuate in strength and size, so two days of strengthening could be followed by weakening as the storm moves north.

"It loses strength considerably when it tracks over cooler water," he said. "For the next couple of days, the general theme is that it will probably continue to strengthen."

Officials tonight told visitors in North Carolina's Dare County which includes Nags Head and heavily populated northern Outer Banks to evacuate by 8 a.m. Thursday.

An updated bulletin from the National Hurricane Center said that the "extremely dangerous" storm will raise water levels by as much as seven to eleven feet above normal tide levels in the Bahamas, potentially causing "life-threatening flash floods and mud slides in areas of steep terrain" as well as "life-threatening surf and rip current conditions."

Hurricane Irene went from a Category 2 to Category 3 from Tuesday night to this morning after ripping street signs out of the ground in the Turks and Caicos and destroying buildings in the Dominican Republic.

Craig Fugate, the manager of the Federal Emergency Management Agency, urged those from the Mid-Atlantic region to New England to start preparing now for the possibility of the hurricane's landfall.

"It's going to be close and whether we get a brush or whether we have a landfall, it's too early to say," Fugate said. "Go ahead and make sure you're ready and then if evacuations are required, heed those evacuation orders. The Hurricane Center says this storm is going to grow and strengthen...and it's really something people need to be prepared now for so they can be ready if they have to act."

Fugate referenced Tuesday's surprise 5.8 magnitude earthquake to urge those living in the Northeast to prepare.

"It's again a reminder that we don't always get to pick the next disaster," Fugate said. "We know this hurricane is coming this way. We just don't know where it's going to hit or how bad it will get. So take time now to get ready."

The hurricane's winds stretch over 400 miles. That's the same width as the entire state of Arizona. The Caribbean islands are low and flat which only fuels the strength of the hurricane, meteorologists say. The storm's surge is 7 to 11 feet, meaning that waters are 7 to 11 feet higher in the Caribbean.

Business owners hurried to board up their stores in the Bahamas and tourists started lining up at airports to get out of harm's way.

Hurricane Irene Pounds Caribbean

Honeymooners Jennifer and Todd Napier spent Tuesday at the airport booking flights and looking for hotels on their laptop.

"We tried to book a flight yesterday. They wanted to charge us $2,500 extra so we were like, no, we'll just wait it out and then our hotel made an emergency announcement and told us they're going to kick us out," Todd Napier said.

Shannon Drury didn't just leave her hotel, she was told the whole Bahamian island of Eleuthera would have to evacuate with officials telling her the danger was "catastrophic."

Fran Newman plans to ride out the storm in the Bahamas.

"The hotel has already told us the plans they have for us should there be a major storm and I am comfortable with the plans they have," she said.

China's military catching up to West, Pentagon says

The Defense Department assessment says Beijing appears on track to achieve its goal of building a modern, regionally focused military by 2020.

By David S. Cloud, Los Angeles Times

Reporting from Washington— China's military is closing technical gaps that long have given the United States and its allies a military edge in Asia, although several ambitious new weapons systems and platforms appear years from completion, according to a new Pentagon assessment.

China is developing a new stealth fighter, recently conducted sea trials on its first aircraft carrier and carried out a record number of satellite and other space launches in the last year, the report notes. It says China appears on track to achieve its goal of building a modern, regionally focused military by 2020.

The pace and scope of China's drive has "allowed it to pursue capabilities that we believe are potentially destabilizing" and "may contribute to regional tensions and anxieties," Michael Schiffer, deputy assistant secretary of Defense, said in a Pentagon briefing Wednesday

But China's People's Liberation Army may face difficulties trying to integrate new and complex weapons systems and capabilities into a military that has always relied on manpower, not technology, for national defense, the report adds.

The Obama administration has maintained high-level contacts with China. Vice President Joe Biden completed a visit there this week, and Chinese President Hu Jintao came to Washington in January.

The report comes amid growing concern at the Pentagon over deep cuts in the U.S. defense budget. Defense officials have agreed to cut roughly $400 billion in spending over the next decade, but they worry that the Pentagon will be targeted for deeper cuts to help reduce the federal deficit.

The Pentagon's defenders in Congress have long cited China's military modernization as a potential threat to American interests and a reason not to cut the Pentagon budget.

The Defense Department spends more than $500 billion a year, not including the cost of the wars in Iraq and Afghanistan. That dwarfs the estimated $160 billion that China spent on its military last year.

The report warns that China's growing capabilities could allow it to project power in the Western Pacific in an effort to deny access to U.S. and allied naval vessels someday.

But China's first aircraft carrier is a decades-old former Soviet vessel, and the navy won't be able to fly fighter jets from its deck for years, the report says.

Schiffer said he believes Beijing is working toward building its own aircraft carriers, but the report notes that no domestically produced Chinese aircraft carrier could be operational before 2015, assuming construction began this year.

"Whether or not this proves to be a net plus for the region or for the globe, or proves to be something that has destabilizing effects and raises blood pressure in various regional capitals, I think remains to be seen," he added.

The new stealth fighter Beijing is developing, along with longer-range missiles, could give China the ability to strike air bases and other facilities in the region, but the advanced aircraft is still years away from completion, the report says.

Virginia Earthquake a Sign of the End Times? Public Looks to Pat Robertson

By Nicola Menzie / Christian Post Contributor

Is it a coincidence that an earthquake that struck Virginia and rattled dozens of other states occurred amid Pat Robertson's "Sign of the Times" special on the "700 Club?"

"Are we in the last days?" Robertson asked during Wednesday morning's live online streaming of the "700 Club" as he continued his teaching on the "Sign of the Times."

"The earth moved," Robertson said ominously, describing the earthquake that struck Virginia Tuesday, "and then it moved all over this part of the country."

As a magnitude 5.8 earthquake struck Virginia around 1:51 p.m. on Tuesday, many folks wondered about its unusual strength. Aftershocks were felt all along the East Coast, West Coast, in some southern states, and even in Canada.

Don Blakeman, a geophysicist with the National Earthquake Information Center (NEIC), told The Christian Post Wednesday that although Virginia has a fair number of earthquakes like most other states, the temblor's strength was unusual.

"Virginia has a fair number of quakes ... but they are typically small. [Virginia] does have a number of them every year, but it is pretty unusual to have one of this size," Blakeman said.

The NEIC geophysicist added, "We should expect some aftershocks, because when you have a good size quake like this then it’s pretty typical to have some aftershocks. It's possible to have some fairly large ones, but most of them will be [in the 3.0 range]."

Earthquake activity was one of the signs of the end, Robertson said, referring to other occurrences such as food shortages and conflicts between nations, which Christians believe will precede Christ's return.

Robertson explained in Wednesday's program, which focused on natural disasters, that earthquakes are one of the "birth pangs" Jesus Christ refers to in Matthew 24 after his disciples ask about the signs preceding his second coming.

The televangelist, who started his series on signs of the end times on Monday, was not alone in looking to the fulfillment of biblical prophecies amid the quake.

Twitter users took to their accounts yesterday, wondering if the CBN televangelist would speak out on the earthquake.

"Earthquake in DC? Stand by for a Biblical explanation from Pat Robertson," tweeted Armistead Maupin (@ArmisteadMaupin).

Erin Fleming (@ERINonyourRADIO) tweeted, "A hurricane headed for the US, an earthquake this morning in D.C. and rioting in parts of the states as well. Back to you Pat Robertson."

Some Twitter users were skeptical, scoffing at the possibility of God revealing any kind of prophetic word to Robertson.

A handful of comments appeared to make reference to Robertson's controversial remarks during the 2010 earthquake that struck the Caribbean nation of Haiti.

Robertson said, just one day after the rattler devastated the small island, that its people were possibly cursed for allegedly making a deal with the devil during the 1791 slave rebellion against the French.

User warrenstjohn (@warrenstjohn) tweeted, "Eagerly awaiting Pat Robertson's pronouncements on who did what to deserve an earthquake."

Patti (@Floridaline) wrote, "Yippee!!! Tomorrow, Gods Meteorologist, Pat Robertson, will tell us why there was an earthquake near DC!!"

Despite the anticipation, Robertson made it clear Wednesday that he had not received any prophetic word from God regarding the earthquake.

"I can't claim any kind of particular revelation," Robertson said in response to a viewer's question about upcoming natural disasters.

Some viewers of the "700 Club's" "Sign of the Times" program were also skeptical that Tuesday's earthquake was any kind of sign from God about the end of the world.

"We've always had natural disasters, many far worse than the Great Virginia Quake of 2011. So why are the events more of a sign than the events of the past," a viewer watching the live program asked in an accompanying chat room.

Other viewers asked Robertson to comment on the rapture, the possible role of the Roman Catholic Church in end time prophecies, and about the possible identity of the antichrist.

No one appeared to ask when the world can be expected to end, but Robertson had an answer for that anyway.

"It will end when the Gospel is preached to the whole world as a witness," Robertson concluded in Wednesday's program.

The "Sign of the Times" program runs through the rest of the week.

Cholesterol-Lowering Foods Reduce LDL Levels More Than Low-Fat Foods

By MIKAELA CONLEY

Millions of Americans pop statins to keep their cholesterol levels down. But new research suggests that cholesterol-friendly foods, such as soy products and tree nuts, may also contribute to lowering LDL, or "bad," cholesterol levels.

The study, published in the Journal of the American Medical Association, found that people who ate a healthy diet filled with cholesterol-lowering foods experienced a 13 percent decrease in their LDL cholesterol levels. Those who followed a diet low in saturated fats experienced a 3 percent decrease.

"The main takeaway here is that people can lower their cholesterol with diet if they put their minds to it," said Dr. David Jenkins, a professor of nutrition and metabolism at University of Toronto and lead author of the study. "These can be small changes. We're not asking people to live behind bars."

Jenkins created the "portfolio diet," which combines foods that allow maximum benefit in lowering cholesterol and preventing heart disease. The regimen includes regular consumption of tree nuts and high amounts of fiber from oats, barley and vegetables. The diet says to replace butter with plant sterol-enriched margarine and substitute soy-based products for meat.

"The study highlighted the power of food to lower risk for cardiovascular disease: What you do eat and what you don't eat are both important," said Dr. Jane Klauer, a New York internist specializing in metabolism and nutrition.

While Jenkins said most study participants followed a moderately healthy diet to begin with, it's possible for people to see positive changes in their cholesterol levels even after making small changes to eating regimens.

"Replacing sources of saturated fat, such as red meat and dairy products, with sources of healthy fats, such as nuts and soy products will definitely have greater benefits than replacing red meat and dairy products with carbohydrates," said Dr. Walter Willett, professor of epidemiology and nutrition at the Harvard School of Public Health.

Lower Your Cholesterol Without Medication

Before suggesting medication, doctors generally encourage high cholesterol patients to change their diet and lifestyle. If noninvasive measures do not sufficiently lower the levels, they will often prescribe statin drugs, which reduce the production of cholesterol in the liver.

"Diet should be used with drugs to reach LDL and non-HDL cholesterol goals," Dr. Robert Eckel, director of the General Clinic Research Center at Colorado Health Science University, wrote in an email to ABCNews.com. "The bulk of evidence indicates the importance of fruits and vegetables, whole grains (fiber), lean poultry and fish to reduce cardiovascular disease risk."

"If goals are not reached with lifestyle changes (including appropriate amounts of physical activity), statins are the drug of choice to reduce cardiovascular disease risk," continued Eckel.

The study had only a six-month follow-up, and many experts suggested a longer follow-up period was necessary to understand the long-term effects of the portfolio diet.

Many experts also noted that an herbivorous, or plant-based, diet would be difficult for meat eaters to maintain.

"The diet was vegetarian and, not surprisingly, had dropouts, even with the counseling," said Dr. Merle Myerson, director of the Cardiovascular Disease Prevention Program at St. Luke's and Roosevelt Hospitals. "I don't think that really long-term adherence would be good.

"The authors state that this is 'long-term.' I don't feel that six months is long term."

"Convincing people to change dietary patterns is difficult, much less convincing them to become vegetarians," said Klauer. "Change is difficult for people. But as they are rewarded with looking and feeling more vital, they are motivated to persevere."