NEW DELHI, India (CNN) -- "Monsoon rains in South Asia have driven millions from their homes and caused what the United Nations says is the worst flooding in living memory.

      More than 1,000 people have been killed or injured by rising waters, but aid agencies say the figure is expected to rise sharply.

      U.N. children's body UNICEF said it had lost track of how many people had been affected by the floods across India, Pakistan, Bangladesh and Nepal.

      So far about 20 million people are known to have fled their homes or trapped in villages at risk from landslides, snakebites and disease.

      "Hundreds of thousands have lost their homes, their possessions, livestock and fields and will have to begin their lives from scratch when flood waters recede," UNICEF said.

      The devastation comes on the heels of severe flooding in southern Pakistan, caused when Cyclone Yemyin struck the country's provinces of Balochistan and Sindh in late June.

      India appears to have been hardest hit by the latest inundations with floodwaters striking the densely-populated and poor states of Bihar and Uttar Pradesh.

      "According to government estimates, the cumulative number of human casualties stands at 1,103 in 138 affected districts and more than 112,000 houses have been damaged or destroyed though these figures are set to rise as the situation unfolds," UNICEF said. It was not clear whether the casualty figure includes injured as well as dead.

      Authorities in Bihar say at least 30 people have died amid the rains and flooding.

      "Nearly 180 relief camps have been set up in different parts of the state. Army helicopters will be pressed into service to distribute food packets from Saturday in some parts of the state," says Manoj Srivastava, the state's Disaster Committee chairman.

      Bihar state governor, R. S. Gavai, has appealed for political parties to work together to aid flood victims.

      Up to 500,000 people are believed to have been affected by floods in India's northeastern Assam, the state's Water Resources Minister, Bharat Chandra Narah, told the CNN.

      The Bottom Line:  How many weather records are going to be broken this year?

      NEW YORK (Reuters) - More signs of weakness in the mortgage market, another surge in oil prices and a Federal Reserve rate decision could create more turbulence for Wall Street next week.

      Widening fallout from the U.S. housing slump has rattled credit markets, putting investors on edge about the outlook for corporate takeovers and share buybacks -- two catalysts of the market's recent rally to record highs.

      On Friday, Standard & Poor's cut its ratings outlook on the debt of investment bank Bear Stearns Cos.(BSC.N: Quote, Profile, Research), fanning concern that troubles in the subprime mortgage market are spreading, which could threaten the economy's health.

      The ratings agency's move came as American Home Mortgage Investment Corp. (AHM.N: Quote, Profile, Research), a subprime mortgage lender, announced plans to close most of its operations, joining a growing list of casualties hit by the stalled housing market.

      "The market is really struggling with defining the size of the subprime problem. The market does not like uncertainty," said Jim Fehrenbach, head of Nasdaq trading at Piper Jaffray, in Minneapolis.

      Investors will tune in to what the Federal Reserve says in its assessment of the economy's outlook on Tuesday, when it releases its policy decision on interest rates.

      The Federal Open Market Committee, the Fed's policy-setting body, is widely expected to keep rates unchanged, so investors will be focused on the central bank's assessment of risk, especially regarding troubles in the subprime market, and following the government's report on Friday that showed job growth slowing. The FOMC statement is expected at about 2:15 p.m. (1815 GMT).

     
       Lake Superior (National Geographic) - "Lake Superior, the world's largest freshwater lake, has been shrinking for years—and now it appears to be getting hotter. Beachgoers at the lake, which is bounded by Wisconsin, Michigan, Minnesota, and Ontario, Canada, must walk up to 300 feet (100 yards) farther to reach shorelines. (See a map of the region.) Some docks are unusable because of low water, and once-submerged lake edges now grow tangles of tall wetland plants.

      The remaining lake water is also heating up at dramatic rates.

      Such changes are sparking implausible conspiracy theories about the water's fate, along with new scientific investigations.

      Researchers are also starting to suspect that the shrinking and heating are related—and that both are spurred by rising global temperatures and a sustained local drought. (Related: "Warming May Be Drying Up Alaska's Lakes, Photo Study Says" [October 17, 2006].)

      No More Rainy Days

      From the late 1960s to 1999, there was a 30-year period with water levels above average, said Scott Thieme, chief of the Great Lakes Hydraulics and Hydrology Office for the U.S. Army Corps of Engineers in Detroit, Michigan. But in 1999, the upper lakes started to fall below average and have mostly stayed that way.

      "Lake Superior is in its largest stretch of below average water levels since we've been recording water levels," Thieme said.

      Scientists predict that by this fall, the lake will set a new record low—about an inch (2.5 centimeters) below the old one.

      "Now people are saying, 'Wow, this is becoming more significant,'" Thieme said. (Related: "Shrinking African Lake Offers Lesson on Finite Resources" [April 26, 2001].)

      Falling lake levels have seemed dramatic to lake residents because they've spent most of their lives alongside a swollen Lake Superior, he added.

      United States  (BBC) - "Sustained oil prices close to $80 a barrel could hit US economic growth, Energy Secretary Sam Bodman has said.

      The US economy has never faced such high prices for "an extended period," Mr Bodman warned.

      There is concern about whether oil supplies can meet global demand and Mr Bodman urged oil producing nations to increase output to avoid shortages.

      Oil prices have fallen back slightly after hitting a record intraday high of $78.77 a barrel on Wednesday.

Sustainability fears

      Analysts say that a price rise above $80 is inevitable, raising concerns about the effect of energy costs on inflation.

      Higher oil prices drive up the costs for businesses who pass those increases on to customers. And with the price of petrol at the pump close to $3 a gallon, it is feared that higher fuel bills will begin to dent consumer spending.

      Mr Bodman said that the high oil prices had inflicted only a "modest" impact on the economy but he was unsure that this was sustainable.

      "I am concerned that where we are operating, in the ranges that we're talking about now," Mr Bodman said.

      "I am concerned for each uptick (in price)."

      And he called on the oil producers cartel Opec to "look carefully at the facts".

      However Qatar's Oil Minister Abdullah al-Attiyah said that Opec could do little about the high price of oil and that there was no shortage of crude in the market.

      On Thursday US light sweet crude settled up 33 cents at $76.86 a barrel while in London Brent crude rose 41 cents to $75.76.

      Before Wednesday's record high, the previous $78.40 high was recorded during the Israel-Lebanon conflict last year..."

More:

      The Bottom Line:  I may have sounded like a broken record in the past about the end of Cheap Oil, but sometimes I just have to say, "I told ya so."

      NEW YORK (CNNMoney.com) -- "The outlook for the housing market looks bleaker than ever. Foreclosures are skyrocketing. Home prices continue to fall. And forecasts for a recovery keep getting pushed back.

      Meanwhile the collapse of the subprime lending market has spread to the financial markets, sparking fears that tighter credit will have a broader impact on consumers and the economy.

      The U.S. government has downplayed the risk of the subprime meltdown spreading. Treasury Secretary Henry Paulson has said the effects are largely contained, and the economy is still strong. William Poole, the president of the St. Louis Federal Reserve branch is also reserved.

      "Unless the pressure becomes much more severe," he said on July 20, "the problems would not impact consumer spending or credit quality more generally."

      In the financial markets, credit, including corporate bonds, has become harder to get, but Mark Zandi, chief economist of Moody's Economy.com, is loath to call it a "credit crunch." He does admit to a "liquidity squeeze," however. The difference: In a crunch, nobody can get a loan; in a squeeze, only the riskier borrowers are cut out.

      According to Peter Schiff, president of Euro Pacific Capital Inc. and author of "Crash Proof: How to Profit from the Coming Economic Collapse," the problem goes way beyond subprime.

      "It's a mortgage problem," he said. "Subprime is like a little leak where the underlying problem is the integrity of the dam itself. Most of the mortgages taken out during the past few years will fail."

      Schiff expects huge losses in the housing market with home prices falling by half in some areas.

      Most economists are nowhere near as pessimistic. Standard and Poor's chief economist, David Wyss, and Moody's Economy.com's chief economist, Mark Zandi, have forecast 8 percent price drops in the housing market, peak to trough.

      On Tuesday, the Case-Shiller Home Price Indices revealed a 3.4 percent fall in its market basket of 10 U.S. cities in the past 12 months; San Diego prices plunged 7 percent. Those declines will have an effect on consumer spending, which accounts for 70 percent of the gross domestic product.

      "Consumer spending growth has been stronger than income growth because the strength of housing prices enabled owners to borrow," according to Gault. "As prices decline, consumer spending will grow more slowly than income."

      Zandi does not believe a consumer spending slowdown is enough to trigger a recession, but he's not counting it out. What it will do, he said, is "ensure that the economy grows at a pace below its potential. I wouldn't dismiss the possibility of a recession. I put the possibility at one in five."

      Ken Goldstein, an economist for the Conference Board, doesn't believe the subprime contagion is enough to send the economy off-track..."

     
      Asia (BBC) - "Millions of people across South Asia have spent another night stranded in flood waters.

      Almost 150 people have died and almost 20 million people have been displaced or marooned in severe flooding across India, Bangladesh and Nepal.

      In some areas, the floods are being called the worst in living memory.

      A vast area is under water, damaging farmland and affecting thousands of villages. Aid agencies say stocks of food and water are running very low.

Flood politics

      Many of the rivers which flow through northern India and into Bangladesh are overflowing, and in some places they have burst their banks.

• 12 million displaced or marooned in India
• 5.5 million displaced in Bangladesh
• More than 750,000 affected in Nepal

      In Assam, in north-eastern India, three feet of rain fell in July.

      People in the state have clashed with police in their desperation for food, shelter and medicine.

      In Uttar Pradesh the army was called in to evacuate 500 villages..."

      United States (BBC) - "Oil prices have climbed to a record high of $78.71 a barrel amid worries about whether oil supplies can meet global demand.

      The price of a barrel of US light, sweet crude passed the previous high of $78.40 a barrel, reached in July 2006.

      Prices have risen steadily in the past few weeks following disruption to output in Nigeria and the North Sea and set a new closing high on Tuesday.

      The latest rise was triggered by data showing a fall in US crude stockpiles.

Falling stocks

      The Department of Energy said that oil inventories had fallen by a higher-than-expected 6.5 million barrels in the week ending 27 July.

      Analysts had been forecasting a far more modest fall of about 700,000 barrels.

      Oil markets have withstood recent stock market turbulence, taking their lead from positive economic signs in the US about employment and consumer confidence.

      Despite a rise in output from the members of the Opec oil producers' cartel last month, traders are still worried about the amount of spare capacity in the market amid robust demand and continuing instability in oil-rich Nigeria.

      "The market is looking closely at the unexpected large draw in crude stocks," said Jim Ritterbusch, president of energy analysts Ritterbusch and Associates.

      "These numbers are enough to keep the crude rally alive."

      The previous $78.40 high was recorded during the Israel-Lebanon conflict last year.

      The Bottom Line:  Wipe the dust off of that Mountain Bike.

      NEW YORK (MSNBC) - "Investors in two Bear Stearns Cos. hedge funds took action against the company Wednesday for allegedly misleading them about the extent of the investment bank’s exposure to risky mortgage-backed securities, a lawyer for the plaintiffs said.

      The move comes as the two funds filed for bankruptcy protection, two weeks after the company told investors one was essentially worthless and the other had lost more than 90 percent of its value.

      As the fate of those two funds moves into court, Bear Stearns said it moved late Tuesday to prevent investors from pulling money out of a third hedge fund, which had $850 million invested in highly rated mortgage-backed securities.

      The company told investors the Asset-Backed Securities fund was not near collapse, but that it froze redemptions to prevent from being forced to sell assets to a market with little appetite for mortgage-related securities.

      Those types of investments, primarily bonds backed by home loans, have lost value amid rising homeowner defaults as the housing market enters its third year of decline. The subprime sector, comprised of mortgages to home buyers with poor credit histories, has been particularly hard hit.

      But the Asset-Backed Securities fund, started in 2000, had less than one-half of 1 percent of its funds invested in those types of loans, Bear Stearns said. It also did not use any borrowed money to make its investments.

      “There are no plans to shut down the fund,” said Russell Sherman, a Bear Stearns spokesman. “We believe the fund portfolio is well positioned to wait out the market uncertainty. We don’t believe it’s in the interest of our investors to sell assets in this current market environment.”

      The two bankrupt funds — the Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd. and the Bear Stearns High-Grad Structured Credit Strategies Enhanced Leverage Master Fund Ltd. — bet heavily on subprime loans. When those loans began to default with increasing frequency, the funds’ creditors asked for their collateral, leaving the funds short on cash.

      When investors sought their money, they learned that the assets in the Enhanced fund were essentially worthless, while assets in the other were worth 9 percent of their value at the end of April.

     
      WOLF CREEK, Mont. (Fox) —  "Campers and residents of another 60 homes were told to evacuate Tuesday after a fire in a wilderness area grew to about 23 square miles.

      A day after residents of about 20 homes were asked to leave, officials ordered the evacuation of the additional homes in the Gates of the Mountains Wilderness. Campgrounds on the north shore of Holter Lake were closed.

      The latest evacuations were ordered after the fire "blew up" and crept to within a quarter-mile of one of the campgrounds, Lewis and Clark County Sheriff Cheryl Liedle said.

      Meanwhile, in northern Idaho, an 81-square-mile blaze was threatening as many as 100 buildings but had been allowed to advance into the Hells Canyon Wilderness area, away from homes.

      Crews made progress and fire lines appeared to be holding, Jodi Kramer, a U.S. Forest Service spokeswoman, said Tuesday evening. The blaze isn't expected to be fully contained until mid-October..."

More:

Dozens more flee Montana wildfire

      MELVILLE, N.Y (MSNBC)  - "Shares of American Home Mortgage Investment Corp. plunged 90 percent Tuesday after the company raised fears it may become insolvent, renewing concern about worsening credit quality in the mortgage market and killing a Wall Street rally.

      The struggling mortgage lender said its financial backers have essentially pulled the plug. The Wall Street banks that lend American Home Mortgage money for home loans — which include firms like UBS AG, Bear Stearns Cos., and JPMorgan Chase & Co. — will not extend the company any more money, and some have demanded back the money they have lent.

      American Home shares, which were halted all day Monday, plummeted when trading finally began at about 2 p.m. EDT and ended the day at $1.04 a share, down from $10.47 on Friday before the company first disclosed the depths of its financial woes.

      The Dow Jones industrial average, which had been up as much as 140 points earlier in the day, reversed course after the resumption of trading in the company’s stock and then kept falling. It fell 1.1 percent or almost 146 points for the day.

      Keefe, Bruyette & Woods analyst Bose George said American Home Mortgage will probably go bankrupt, or at least be restructured into something leaving very little value for shareholders.

      “The chances are low,” he said of the company’s prospects for survival. “The situation is radically going to be altered.”

      American Home Mortgage said it has over the last three weeks paid “very significant” margin calls, which occur when a lender demands compensation after a borrower’s collateral loses value. The company still faces “substantial” unpaid margin calls.

      This echoes reports from a number of other mortgage lenders of late, including New Century Financial Corp., the Irvine, Calif.-based lender that filed for bankruptcy protection earlier this year.

      American Home Mortgage hired Lazard Ltd. and Milestone Advisors to assist in evaluating the company’s options. One of those options, the company said, is an “orderly liquidation of its assets.”

      The company failed Monday to deliver $300 million in mortgages promised to home buyers, and said it expects to be unable to finance $450 million to $500 million in additional mortgages Tuesday.

      The reason American Home Mortgage’s lenders are balking is the mortgage loans that act as collateral for the company’s credit lines have sunk in value. The market where investors buy mortgage loans has suffered “unprecedented disruption” this year, the company said, and it is having trouble selling its mortgages.

      Last year, the lender sold two-fifths of its loans to Countrywide Financial Corp., Deutsche Bank AG, and Wells Fargo & Co.

      Dozens of mortgage lenders have gone bankrupt this year as more people miss payments on home loans, housing prices sag and skittish investors flee risky mortgage debt.

      But while most of the bankrupt lenders catered to “subprime” borrowers — or borrowers with checkered credit histories — almost none of American Home Mortgage’s $58.9 billion in loans last year were classified as subprime.

      American Home Mortgage specializes in adjustable-rate mortgages, which carry interest rates that reset according to certain benchmark interest rates. This type of debt has hamstrung a lot of borrowers in the past year because interest rates have jumped.

      The company also lends to so-called Alt-A borrowers, or borrowers that cannot document their income. While Alt-A credit is not considered as unreliable as subprime, it is a step down from prime. Some banks, such as M&T Bank Corp., have recorded accounting charges this year assuming a worsening in Alt-A mortgage credit.

      Alliance Bancorp, an Alt-A lender based in Brisbane, Calif., went bankrupt this year.

      The Bottom Line:  Bye bye lending markets.

      BOGRA, Bangladesh (MSNBC) - "Flooding caused by monsoon rains have stranded hundreds of thousands people in Bangladesh and India, and a lack of boats, food and drinking water has hit rescue and relief work, officials said on Tuesday.

      In low-lying Bangladesh, more than half a million people have been marooned in towns and villages in the north of the country after the Brahmaputra and Padma rivers burst their banks.

      A local official in Bogra district said she had received frantic calls from people in flooded villages calling for help.

      “Please send us a boat,” Furti Begum quoted one desperate villager as saying in a mobile phone call from the village near Bogra town. “Probably this is my last call.”

      Thousands of people had been living on rooftops for over a week, but evacuating them was difficult due to a shortage of boats, she said.

      Across the border in India’s eastern states, tens of thousands of villagers have been displaced from their homes or were cut off and officials said lack of resources and equipment such as motor boats was making rescue efforts difficult.

      In the impoverished state of Bihar, which has seen incessant rain for the past week, 48 school girls remained trapped for the third day on the first floor of their boarding school in the northern district of Darbhanga.

      “We are taking steps to shift the girls to safer places and also arranging food and drinking water for them,” said Ramji Prasad, a local official.

      In the northeastern state of Assam, thousands of displaced people are staying in makeshift shelters under tarpaulin sheets by the side of roads, on bridges and in government buildings.

      Homeless people complained that food supplies given by the government were unfit for use and accused authorities of not coordinating relief efforts..."

      MIAMI (MSNBC) - "Tropical Storm Chantal, the third named storm of the Atlantic hurricane season, was expected to weaken as it moved across the ocean on Tuesday but could still carry heavy rain to Canada, forecasters said.

      The storm, which was not expected to threaten the United States, had maximum sustained wind of 50 mph and was centered about 235 miles south-southwest of Halifax, Nova Scotia, at 5 p.m. ET, according to the National Hurricane Center. It was moving northeast at about 26 mph.

      Chantal was expected to be short-lived as a tropical storm, possibly weakening later Tuesday or Wednesday. Its rain could affect Newfoundland late Wednesday or early Thursday, but it will not be very strong, hurricane specialist Eric Blake said.

      The first named storm of 2007 was Subtropical Storm Andrea, which formed in May. It was followed by Tropical Storm Barry, which formed on June 1, the first day of the official hurricane season.

      Federal government forecasters said in late May that they expected a busier than normal Atlantic hurricane season, with 13 to 17 tropical storms and seven to 10 of those becoming hurricanes. A tropical storm has sustained wind of at least 39 mph and becomes a hurricane when sustained wind reaches 74 mph.

      Last year, there were 10 tropical storms in the Atlantic and five hurricanes, none of which made landfall in the United States. It was a mild year in comparison with the devastating 2005 season, which set a record with 28 named storms, 15 of them hurricanes, including Hurricane Katrina.

      The Atlantic hurricane season, which officially runs from June 1 to Nov. 30, averages 9.6 named storms, with 5.9 of them becoming hurricanes and 2.3 major hurricanes..."