It also emerged there are three times more senior officers than Apache attack helicopters, which play a vital role in Afghanistan. The disturbing imbalances were discovered by Frank Ledwidge, who served on the frontline in Iraq, Bosnia and Kosovo. 'Our priorities are hugely skewed,' he said. 'The British Army is over-burdened and over-staffed with senior ranks. We need to think about cutting top brass and the focus now should be on our conflicts rather than promotion.'

He believes retaining so many one-star generals and above earning £100,000-a-year plus while cutting spending is devastating morale in the Armed Forces. One tank officer said: 'When the MoD is making large cuts to equipment and personnel, the troops are rightly going to question why we need to retain so many well-paid senior officers living a good life.' The Royal Navy is suffering a similar plight with more admirals than active warships, according to an 2008 study. Following the recent defence cuts, the senior service now has just 20 fighting surface ships, which are destroyers and frigates.

"The FBI is aware of these schemes and threats and is looking into the matter," FBI spokesman Tim Flannelly told FoxNews.com. The hackers say they plan to launch a DDoS (or distributed denial of service) attack on the NYSE's computer systems -- the same type of computer attack that brought down numerous websites last Spring, making them inaccessible.

Anonymous has also separately declared the Stock Exchange announcement a hoax, and it remains unclear whether this is an official effort by Anonymous, a group of rogue hackers or someone else entirely. Either way, the FBI is investigating. "It is a crime to show the intent to carry out a hack when you are in possession of software or computer applications to do so and we take it seriously," FBI spokesman Flannelly said.

In one of the videos, which was addressed to the media, a narrator states, "We can no longer stay silent as the population is being exploited and forced to make sacrifices in the name of profit. We will show the world that we are true to our word. On October 10, NYSE shall be erased from the Internet... expect a day that will never, ever, be forgotten."

Welcome to the new normal. Billions of pounds were wiped off the value of shares in London on Tuesday 4 October. Dexia, a bank jointly owned by the French and the Belgians, teetered on the brink of collapse. One of the main barometers of Wall Street sentiment slid into bear-market territory. An emergency press conference called by Greece's finance minister was delayed because the building was being picketed by civil servants.

The UK construction sector looked like it was heading for recession as public sector projects dry up and in Spain more than one in five are out of work. The French and Belgian governments were forced to pledge that no depositor in Dexia would lose a cent let alone a euro as they tried to avoid a Northern Rock-style run on the bank. Traders, unsurprisingly, were scrabbling for their tin hats.

The turmoil overshadowed the Conservative party conference in Manchester just as it did three years ago in Birmingham when the shock waves from the collapse of Lehman Brothers diverted attention from David Cameron's attempts to portray himself as a prime minister in waiting. Coalition ministers know now, as Gordon Brown as his team knew then, that the global economy is teetering on the brink of recession. Jean Claude-Trichet, in his last few days as president of the European Central Bank, said: "We are experiencing the worst crisis since world war two."

So what happens now? Some things are not in doubt. It will be a tough winter. Greece will default at some point. Policy will respond to economic weakness. But answers to the bigger questions remain unclear. Will the euro survive? Will there be a second banking meltdown? Is the world facing a decade or two of sluggish growth to match the Great Depression of 1873-1896, as some historians believe. Nobody really knows. Which is why the new normal is not really normal at all.

In a report released after US stock markets closed on Tuesday, Moody's downgraded Italy's government bond ratings from Aa2 to A2 with a "negative outlook", suggesting further cuts could be to come. The move threatens to increase Italy's cost of borrowing, and will add yet more pressure to European finance ministers now wrestling with a financial crisis that has spread across the continent. Italy's prime minsiter Silvio Berlusconi criticised Moody's rival Standard & Poor's when it cut Italy's credit rating last month, saying the ratings agency's action was "dictated more by newspaper stories than by reality".

In its report, Moody's said the decision had been driven by three main factors: the debt crisis, which was causing a "sustained and non-cyclical erosion of confidence" in Europe and increasing "long-term funding risks" for Italy; the increased downside risks to economic growth due to macroeconomic structural weaknesses; and a weakening global outlook. "The implementation risks and time needed to achieve the government's fiscal consolidation targets to reverse the adverse trend observed in the public debt, due to economic and political uncertainties," Moody's said.

"Bank of America customers, vote with your feet, get the heck out of that bank," Durbin said on the Senate floor. "Find yourself a bank or credit union that won't gouge you for $5 a month and still will give you a debit card that you can use every single day. What Bank of America has done is an outrage." Durbin said consumers are rightfully outraged about last week's announcement.

"It is hard to believe that a bank would impose such a fee on loyal customers who simply are trying to access their own money on deposit at Bank of America," he said. "Especially when Bank of America for years has been encouraging their customers to use debit cards as much as possible." Most basic checking accounts at Bank of America will see a 40 percent jump in monthly costs and the bank says the debit fee will be waived for customers who upgrade to "premium" accounts that require higher minimum balances.

The accusation came from the interior ministry as it claimed on Tuesday that 11 security personnel were wounded when security forces clashed with protesters in the oil-rich eastern province, in an apparent fresh outbreak of protests by the country's Shia Muslim minority.

"A group of instigators inspired by a foreign country gathered in al-Awwamiya village near Qatif at 9pm on Monday and tried to undermine security," an interior ministry official was quoted as saying in a statement to the Saudi press agency. The claim of foreign meddling highlights the potential for unrest in Saudi Arabia, the world's largest oil producer, even though it has so far largely avoided the protests sweeping the Arab world.

Rioters in the town of al-Awwamiya fired machine guns and hurled Molotov cocktails at members of the security force on Monday night, the Saudi press agency said. The rioters "need to clearly decided if their loyalty is to their homeland or to that state and its religious authorities", the interior ministry added.

Mohamed al-Saeed, a Qatif resident, accused the Saudi state of ruthlessly suppressing the protest. He said in an email: "For the third day our families in Awwamiya town and Qatif live under brutal crackdown by Saudi forces, just because they went out and [asked] for our human rights and freedom." Saudi Arabia's Shia minority, which accounts for about 10 per cent of the population, often claims victimisation by a government they say questions their loyalty to the state and is suspicious of their religious affiliation with Iran.

Syrian President Bashar Assad on Tuesday threatened to set fire to the Middle East, and especially to Israel, if NATO attacks Syria, the Iranian Fars news agency reported. In a meeting with Turkish Foreign Minister Ahmet Davutoglu, Assad said: "If a crazy measure is taken against Damascus, I will need not more than six hours to transfer hundreds of rockets and missiles to the Golan Heights to fire them at Tel Aviv."

"All these events will happen in three hours, but in the second three hours, Iran will attack US warships in the Persian Gulf as American and European interests will be targeted simultaneously," Assad reportedly said.

But Moscow and Beijing said the draft contained no provision against outside military intervention in Syria. The US envoy to the UN said Washington was "outraged" by the vote. Susan Rice, who walked out after the vote, said opposition to the resolution was a "cheap ruse by those who would rather sell arms to the Syrian regime than stand with the Syrian people". The result is a huge blow to European and US efforts on the Syria issue, the BBC's Laura Trevelyan in New York says.

More than 2,700 people have been killed across Syria since the crackdown began in March, the UN estimates. The government of Syrian President Bashar al-Assad says it is in the process of introducing reforms and is speaking to members of the opposition. It blames the unrest on armed gangs.

Washington said earlier it hoped the council would send a strong message to Syria. Germany said the world had to show solidarity with Syrians on the streets.

Thousands of people are expected to join protests in central Athens, organised by the main unions. The European Commission is discussing ways of propping up banks in Europe to protect them from the Greek crisis. Global financial markets have been in turmoil over fears that the country could default on its debt, most of which are held by European banks.

Greece must implement the stringent austerity measures in order to secure its next instalment of bailout cash from the EU. It is, though, a race against time, as this country rushes to implement deep structural reforms and public sector cuts to avoid defaulting on its debt: something that could spread contagion throughout the global economy.

Many in the market expect Greece to default at some point which will mean a hit for banks with exposure to the debt-laden nation. Troubled Franco-Belgian bank Dexia fell as much as 31% in early trading on top of a 10 percent fall on Monday, as worries about its heavy exposure to Greece grew.

In London, Royal Bank of Scotland and Barclays - which also have exposure to Greek debt - were among the biggest fallers sliding 7% and 6% respectively. Man Group, the largest quoted hedge fund, dropped 7%. Last week they reported their clients had withdrawn $2.6 billion worth of funds during the past three months due to fears over market volatility.

Sterling collapsed from just under $1.5580 to just over $1.5480 in a matter of seconds at almost exactly the same moment that surprisingly strong manufacturing data were released at 9.30 am on Monday. The pound immediately rebounded to $1.5550, suggesting somebody took a bath on the hasty transaction.

"It was a miss-hit on cable and we hear an algo just stuck an offer at $1.5480 in the machine which should have been $1.5580," one trader said. Kathleen Brooks, research director at Forex.com, added: "The market legend is that it did spike down due to some sort of mis-trade. Usually when something like that happens, everyone blames an algorithm or a hedge fund."

Somehow it seems, in the trading world, a fat finger can be judged to belong to an algorithm rather than the programmer who built the algorithm. As it turned out, the mistake proved prescient. After the early rebound, sterling slumped again as currency investors dumped the euro and bought the dollar. Sterling rose 0.47 cents to 1.1659 as the euro crashed to an eight-month low against the dollar.

Two things became clear at the end of last week - a week that many pundits had prematurely predicted would spell the end of the center-right coalition of the CDU, its Bavarian sister party the Christian Social Union and the FDP.

First, the government can rely on its own parliamentary majority to push through euro bailout legislation - at least for the time being.

Second, Merkel's finance minister, of all people, has sown doubt about the government's crisis management.

Many German politicians are also insinuating that he has a hidden agenda. They fear that one of the last fully committed supporters of the European project is taking advantage of the crisis to advance his dream of a United States of Europe - at almost any price. Even the chancellor is sometimes annoyed by the finance minister's moves. The government may have survived yet another vote last Thursday, but the hurdles will be even higher next time around.

"The Broken Jug" is one of the most frequently performed plays in German theater. With the village judge Adam, who passes judgment on a crime he committed himself, Heinrich von Kleist created one of the classic comedic figures of world literature. US President Barack Obama currently seems to be portraying a modern version of Kleist's village judge. He is increasingly vocal in his criticism of Europeans for supposedly having exacerbated the ongoing economic crisis with their caution. His audience, however, seems to sense that the plight Obama is lamenting originated in his own country.

It stems from a doctrine that has dominated economic thought for the last two decades and consists of two elements: turbo-capitalism, whose only tenet is that any regulation of financial markets inhibits growth, and its more accommodating but no less dangerous brother, turbo-Keynesianism.

American economists, central bankers and fiscal policy makers have reinterpreted British economist John Maynard Keynes's clever idea that government spending is the best way to counteract a serious economic downturn - and have turned it into a permanent prescription. In their version of the Keynesian theory, declining growth or tumbling stock prices should prompt central banks to lower interest rates and governments to come to the rescue with economic stimulus programs. US economists call this "kick-starting" the economy.

The only problem is that this method of encouraging growth has not stimulated the US economy in recent years, but in fact has put it on a crash course. From the Asian economic crisis to the Internet and subprime mortgage bubbles, economic stimulus programs by monetary and fiscal policy makers have regularly laid the groundwork for the next crash instead of encouraging sustainable growth. In the last decade, the volume of lending in the United States grew five times as fast as the real economy.

Cheap money created the fertilizer for the excesses of the US financial industry. Low interest rates seduced mortgage providers into talking even the homeless into taking out mortgages. And the same low rates made it easier for investment banks and hedge funds, using increasingly risky loan structures, to transform the once-leisurely insurance and bond markets into casinos.

Now the bubble has burst. This has not, however, prompted the US government to conclude that its prescriptions could have been wrong. On the contrary, now it wants to increase the dose. [Mr] Obama plans to follow the largely unsuccessful 2008 economic stimulus program with a new program this year. Meanwhile, Federal Reserve Chairman Ben Bernanke says that he intends to flood the economy with cheap liquidity - for years, if necessary.

The real problem, though, is a different one. The US economy doesn't lack money. Rather, it lacks products that can compete in the global marketplace. The country has a deep trade deficit, yet the Obama administration is borrowing money at the same rate as near-bankrupt Greece.

The fact that Europeans are unwilling to comply with [Mr] Obama's strange logic gives reason for hope. It makes no sense to pile up more and more debt on already unstable piles of debt. The world doesn't have too little debt, but too much. [Mr] Obama should retract his advice, or he might end up like the village judge in Kleist's comedy. When his deception was discovered, he was forced to flee and his days as a judge came to a rapid end.

Between now and mid-December, the sheer onslaught of high-level gatherings - whether euro zone finance officials, EU leaders or the G20 - is likely to force a resolution of the most pressing issues confronting policymakers as they battle to get to grips with Greece, Spain and Italy. On Monday and Tuesday, euro zone finance ministers meeting in Luxembourg will discuss how they can increase the firepower of the European Financial Stability Facility, the bailout fund set up last year and so far used to help Ireland and Portugal.

The aim is to give the EFSF far greater clout than its 440 billion euro capacity, either by leveraging its capital in some way or by using it to guarantee only a portion of at-risk euro zone sovereign debt, allowing its funds to stretch further. While no decisions are expected in Luxembourg, it will prove critical preparatory work for when all 17 euro zone countries have ratified changes to the EFSF agreed in July, changes that will allow the facility to lend to governments preemptively and help recapitalise banks, among other steps.

Guntram Wolff, the deputy director of Bruegel, a think-tank whose analysis frequently informs EU policymaking, told Reuters late last month, referring to a default. "In the middle of October I think there will have to be a decision not to go ahead with the current PSI (private sector involvement) and in November you look at a more fundamental debt restructuring.

That may not come in time for the G20 heads of state meeting in Cannes on November 3/4, but it could arrive by a meeting of euro zone finance ministers in Brussels on November 29, and sharpen the minds of EU leaders as they prepare to meet for their last summit of a hectic year on December 9.

In a coordinated response, the Chinese central bank and the ministries of commerce and foreign affairs accused Washington of "politicizing" global currency issues. The bill to be debated in the United States this week violates World Trade Organization rules and forcing the yuan to appreciate would weaken joint efforts to revive the global economy, the foreign ministry said.

"By using the excuse of a so-called 'currency imbalance', this will escalate the exchange rate issue, adopting a protectionist measure that gravely violates WTO rules and seriously upsets Sino-US trade and economic relations," foreign ministry spokesman Ma Zhaoxu said in a statement posted on China's official government website (www.gov.cn) on Tuesday.

"China expresses its adamant opposition to this."

US senators voted on Monday to open a week of debate on the Currency Exchange Rate Oversight Reform Act of 2011, which would allow the US government to slap countervailing duties on products from countries found to be subsidizing their exports by undervaluing their currencies. US lawmakers, eyeing 2012 elections, said the undervaluing of China's currency had cost American jobs and that a fairer exchange rate would help cut an annual trade gap of $250 billion.