Eurozone leaders have still failed to address the underlying problem of Greek solvency. Without some form of long term debt relief and a sustainable plan to return the Greek economy to growth, taxpayers will continue to be heavily exposed to a Greek default. A second bailout and the expansion of the EFSF may provide a liquidity boost, but will ultimately transfer risk away from the private sector onto the books of taxpayer-backed institutions.

It looks as if Greece will be forced into some kind of temporary default, but the mechanisms for dealing with this look to be thin on the ground. This plan offers the negatives of a default, albeit a temporary one, without proper backstops or the positives of long term debt relief, which is what Greece, and potentially other struggling eurozone countries, really need.

The deficit reduction debate is coming up against an August 2 deadline when the $14.3 trillion (8.77 trillion pounds) limit on America's borrowing capacity is exhausted, putting in jeopardy payments on US Treasury debt as well as paycheques for federal employees and soldiers. If an agreement is reached to raise the debt ceiling but nothing meaningful is done in terms of deficit reduction, the US would likely have its rating cut to the AA category, S&P said.

"While banks and broker-dealers wouldn't likely suffer any immediate ratings downgrades, we would downgrade the debt of Fannie Mae, Freddie Mac, the 'AAA' rated Federal Home Loan Banks, and the 'AAA' rated Federal Farm Credit System Banks to correspond with the US sovereign rating," S&P said in its report. "We would also lower the ratings on 'AAA' rated US insurance groups, as per our criteria that correlates insurers' and sovereigns' ratings," the firm said.

However, S&P said it sees a failure to reach an agreement on raising the debt ceiling and reducing deficits as the least likely scenario, adding that in such a case the global financial markets would be in turmoil and "likely shove the US economy back into recession." In such a hypothetical case, it envisages the US Treasury curtailing spending sharply and the US Federal Reserve launching another round of quantitative easing to help prop up the economy.

The leaders met in Brussels after the European Central Bank signaled in a policy reversal that it was willing to let Greece default temporarily as part of a plan involving longer official loans at cheaper rates, a debt swap, a bond buyback but no new tax on banks. Minds have been concentrated by the danger that Europe's debt crisis could engulf the much bigger economies of Spain and Italy. Greece, Portugal and Ireland have already succumbed.

The draft summit statement obtained by Reuters showed the EFSF rescue fund would be allowed for the first time to help states earlier with precautionary loans, to recapitalize banks and to intervene in the secondary bond market. "To improve the effectiveness of the EFSF and address contagion, we agree to increase the flexibility of the EFSF," it said, listing those three key steps, all of which Germany had previously blocked.

German Chancellor Angela Merkel and French President Nicolas Sarkozy crafted a common position in late night talks in Berlin with ECB President Jean-Claude Trichet. "I expect we will be able to seal a new Greece program. This is an important signal. And with this program we want to grasp the problems by their root," Merkel told reporters on arrival in Brussels. Dutch Finance Minister Jan Kees de Jager said a short-term or selective default for Greece, long vehemently opposed by the ECB, was now a possibility.

"The demand to prevent a selective default has been removed," he told the Dutch parliament.

The idea was that if several of our biggest banks collapsed at the same time the financial system would not be strong enough to keep things going and economic activity all across America would simply come to a standstill. Congress was told that if the "too big to fail" banks did not receive bailouts that there would be chaos in the streets and this country would plunge into another Great Depression. Since that time, however, essentially no efforts have been made to decentralize the US banking system.

Instead, the "too big to fail" banks just keep getting larger and larger and larger. Back in 2002, the top 10 banks controlled 55 percent of all US banking assets. Today, the top 10 banks control 77 percent of all US banking assets. Unfortunately, these giant banks are also colossal mountains of risk, debt and leverage. They are incredibly unstable and they could start coming apart again at any time. None of the major problems that caused the crash of 2008 have been fixed. In fact, the US banking system is more centralized and more vulnerable today than it ever has been before.

It really is difficult for ordinary Americans to get a handle on just how large these financial institutions are. For example, the "big six" US banks (Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo) now possess assets equivalent to approximately 60 percent of America's gross national product. These huge banks are giant financial vacuum cleaners. Over the past couple of decades we have witnessed a financial consolidation in this country that is absolutely unprecedented.

This trend accelerated during the recent financial crisis. While the big boys were receiving massive bailouts, the hundreds of small banks that were failing were either allowed to collapse or they were told that they should find a big bank that was willing to buy them.

But someday the dominoes are going to start to fall and the house of cards is going to come crashing down. It is an open secret that our financial system is fundamentally unsound. Even a lot of people working on Wall Street will admit that. It is just that people are so busy making such big piles of money that nobody wants the party to stop. It is only a matter of time until some of these big banks get into a huge amount of trouble again. When that happens, we might really find out whether they are "too big to fail" or whether we could get along just fine without them.

So could we potentially see a repeat of 2008? Sadly, when the next big financial crisis happens it might be worse than 2008. Back in the middle of 2008, the US national debt was less than 10 trillion dollars. Today it is over 14 trillion dollars. Back in 2008, none of the countries in the EU were on the verge of financial collapse. Today, several of them are. This time if the global financial system starts falling apart the big governments around the world are not going to be able to do nearly as much to support it. That is why what is happening right now is so alarming. As signs of weakness spread, the short sellers and the speculators are starting to circle. They can smell the money.

Back in 2008, bank stocks led the decline. Today, that appears to be happening again. The "too big to fail" banks are getting absolutely pummeled right now. Most people don't have much sympathy for the banksters, but if we do see a repeat of 2008 they are going to be cutting off credit and begging for massive bailouts once again, and that would not be good news for the economy.

In Europe, the EU sovereign debt crisis just seems to get worse by the day. Bond yields for the PIIGS are going haywire. The higher the yields go, the worse the crisis is going to get. Meanwhile, as I have written about previously, a bad mood has descended on world financial markets. Pessimism is everywhere and fear is spreading. The short sellers and the speculators are eager to jump on any sign of weakness. Investors all over the globe are extremely nervous right now.

So what happens next? Well, nobody knows for sure. But things certainly do not look good. The financial news is just going to keep getting worse. This financial system is simply unsustainable. It is fundamentally unsound. The reality is that financial bubbles cannot keep expanding forever. Eventually they must burst.

Over the next few weeks, keep a close eye on banking stocks and keep a close eye on European bond yields. Hopefully things will stabilize.

Hopefully the next wave of the financial collapse is not about to hit us.

Hopefully the entire global financial system is not on the verge of a major implosion.

But you might want to get prepared just in case.

Charles Plosser, president of the Philadelphia Federal Reserve Bank, said the US central bank has for the past few months been working closely with Treasury, ironing out what to do if the world's biggest economy runs out of cash on August 2. "We are in contingency planning mode," Plosser told Reuters in an interview at the regional central bank's headquarters in Philadelphia. "We are all engaged... It's a very active process."

Plosser said his "gut feeling" was that President Barack Obama and Congress will come to an agreement to increase the Treasury's borrowing authority in time to avert a default on government obligations. Obama was due to meet with top Republicans in Congress on Wednesday to discuss the latest attempts to end the dispute over raising the country's debt ceiling, a row which has raised the prospect of the Treasury Department running out of money to pay its bills next month.

The Treasury has repeatedly said default was unthinkable and that there was no alternative to raising the debt ceiling. Plosser's remarks marked the most extensive public comments yet on preparations for a default from a US official. A Treasury spokesperson could not be immediately reached for comment.

Fed Chairman Ben Bernanke last week warned that a default could have "catastrophic" effects on financial markets. Plosser, a former dean of the Simon School of Business at Rochester University, was more circumspect. "It could be very bad. At some level we don't really know what the consequences could be. It could be very serious. It could be less serious. Do we really want to run that experiment?"

Early on Thursday morning, after seven hours of talks, Germany and France reached a common position on a second bailout of Greece but details of the the accord were not revealed. The German chancellor and the French president had been barraged with pleas from political and financial leaders to reach an agreement - or risk the collapse of the single currency.

The accord between the two most powerful states in the eurozone will now be presented to the crisis summit in Brussels on Thursday of all 17 leaders of the bloc, described as the "last chance saloon" for the euro project. Mr Sarkozy decided to travel to Berlin after the pair repeatedly failed to agree on how to get private bondholders to share the costs of a new 115 billion euros (101 billion pounds) bail-out for Greece.

Jose Manuel Barroso, the president of the European Commission, said: "Nobody should be under any illusion: the situation is very serious. It requires a response. Otherwise the negative consequences will be felt in all the corners of Europe and beyond."

In a rare outburst, Mr Barroso, accused European leaders of endangering "a strong single market and a strong euro. That is what is at stake. That is why we must provide a solution tomorrow. I believe now is the time to decide," he said. "Leaders need to come to the table saying what they can do and what they want to do and what they will do. Not what they can't do and won't do."

"Part of the reason it is called 'tiger' is also because it is very aggressive," says Dina Fonseca, an associate professor of entomology at Rutgers University. "You can try and swat it all you want, but once it's on you, it doesn't let go. Even if it goes away, it will be back for a bite."

Since urban areas tend to be warmer - often by 5 to 10 degrees - than rural areas, cities are seeing tiger mosquitoes earlier and sticking around longer, often into October. "The Asian tiger mosquito arrived this year in June - three months earlier than last year," says Wayne Andrews, superintendent of the Bristol County Mosquito Control Project in Taunton, Massachusetts.

The species has been traced to 1985, when a ship arrived in Texas loaded with used truck tires, perhaps from Japan, which is a major used-tire exporter, according to research by the Centers for Disease Control and Prevention. The eggs hatched when they were exposed to water. Since then, the species has made its way from Texas to Florida and up the East Coast, says Gary G Clark, a research leader with the Agriculture Department. "Now, more than half of the states have this aggressive species," he says.

These urban mosquitoes are what entomologists call "container mosquitoes." Instead of marshes and natural bodies of water, both Asian tiger and rock pool mosquitoes can breed in small, artificial containers, such as tires, toys, cans and concrete structures. "A rule of thumb for container mosquitoes is: Water plus seven days equals mosquitoes," Dr Fonseca says.

Reports suggest a new tax on banks will also be debated. But German Chancellor Angela Merkel has cautioned against over optimism. Greece received its first aid package in May last year, but the debt crisis continues to undermine confidence in global financial markets, with some commentators suggesting it threatens the future of the euro itself.

Politicians and investors are calling for decisive action to help bring the crisis to an end. "Nobody should be under any illusion; the situation is very serious," European Commission President Jose Manuel Barroso said on Wednesday. "It requires a response. Otherwise, the negative consequences will be felt in all corners of Europe and beyond."

President Barack Obama has also weighed in, calling Mrs Merkel on Tuesday night to stress the importance of tackling the debt crisis in sustaining the global economic recovery. The International Monetary Fund has also called on European leaders to take swift and decisive action. Delaying such action further would be "very costly" for the world economy, it said.

Germany has proposed allowing Athens more time to repay, effectively rolling over existing debts into new bonds. It wants private investors, largely banks, to participate in this restructuring. But the European Central Bank has strongly opposed this plan, arguing that such a rollover would constitute a default in the eyes of the international credit ratings agencies and, as such, would undermine investor confidence and the euro itself.

An alternative way to get private investors to contribute to any aid package would be to introduce a new bank tax. Reports suggest leaders will discuss precisely such a tax, even though this would prove hugely unpopular with the banks. It is these divisions that explain Mrs Merkel's attempts to dampen expectations ahead of the summit. The summit will take place in Brussels at 1300 local time (1100 GMT).

Far from the innocent, upright democracy of its self-image, Britain is showing a seamy side that anti-corruption campaigners say is getting worse and may be politically explosive as society becomes more unequal due to the financial and economic crises. Behind a facade of probity, London offers a haven for oligarchs and despots, a place where foreign media magnates have bought access to and influence over the government.

The scandal engulfing Rupert Murdoch's media empire has already destroyed a newspaper, cost two top police officers their jobs, seen the arrest of powerful media figures and embarrassed the prime minister and political elite.

But it points to a bigger problem in British society - overly cozy relationships among elites that are ethically dangerous, even when they do not involve outright criminality.

It's not just Britain. A Reuters investigation this month showed how some US states - notably Wyoming and Delaware - were failing to meet international standards, offering "shelf companies" to help hide assets and avoid tax. Christensen argues that states have been losing control of the financial system for more than 30 years and now find themselves increasingly at its mercy. Even groups such as Transparency International - which has traditionally focused on criticizing "conventionally" corrupt states in emerging economies - are beginning to shift their attention to developed world corruption.

Political advisers to banks warn of a growing global anti-establishment backlash. John Bassett - a former senior official at the British signals intelligence agency GCHQ and now a senior fellow at the Royal United Services Institute - says that coming after the financial and economic crises the hacking scandal "has revitalized the narrative of a corrupt elite. The long-term result is likely to be a further erosion in the credibility of the British establishment, particularly the media and police, in the eyes of citizens."

The authorities have banned live broadcasts of the riots. The trouble started after a court ruled on Tuesday the protests, called against the high cost of living, were illegal. Northern Region Police spokesperson Norah Chimwala told the BBC that one person had died in the unrest in Mzuzu, some 300km (185 miles) north of the capital, Lilongwe.

A nurse at Mzuzu Central Hospital told the Associated Press news agency medical staff were treating people with gunshot wounds."We have more than 10 people in the hospital right now, some are in a serious condition," she said, speaking on condition of anonymity. The demonstrations were called to protest against rising fuel prices, a shortage of foreign exchange reserves, alleged bad governance and poor international relations.

The UK accused Malawi of mishandling the economy and failing to uphold human rights. The government recently passed an austerity budget, raising taxes to reduce dependence on aid. Malawi is one of the poorest countries in the world, with an estimated 75% of the population living on less than $1 (60 pence) a day.

On Wednesday, state-run Xinhua news agency reported that police responded by shooting and killing 14 rioters, who the agency said threw gasoline bottles and rocks. [Updated July 20, 2011: Exile Uighur groups have disputed the official version of events. The Munich-based World Uyghur Congress says that a group of about 100 Uighurs were protesting "illegal seizures of land and the forcible disappearances of relatives by Chinese security forces" when police opened fire, prompting the clash.]

Outbursts of violence have been regular if relatively infrequent events in Xinjiang for the past two decades. In August 2010 a Uighur man who was targeting police and paramilitary officers set off a bomb rigged to a three-wheeled cart, killing seven people and injuring 14. Two years before in the city of Kashgar two Uighur men drove a truck into a group of border patrol officers who were out on an early morning run, then attacked the survivors with knives and homemade explosives. Seventeen guards were killed, and 15 injured.

The largest-scale violence in recent years happened on July 5, 2009, when young Uighur men went on a rampage in the regional capital of Urumqi, attacking non-Uighurs with clubs and knives. Two days later Han Chinese, who are the dominant ethnic group in China, launched retaliatory attacks on Uighur neighborhoods. Nearly 200 people were killed and some 1,700 injured, according to official reports. Tens of thousands of paramilitary troops flooded the city to restore order, and Internet service was blocked, only to be restored months later.

The authorities have said little about the widespread discrimination faced by Uighurs in China. It is not uncommon to hear Uighurs called "thieves" or worse in China, and such bias creates a serious obstacle to Uighurs enjoying a share of the economic opportunity afforded Han Chinese. China may well achieve its growth targets in Xinjiang, but if Uighurs are left behind the ethnic strife will only continue.

With a shoreline at the lowest land point on the globe (1,388 ft. below sea level) and no outlet, millennia of evaporation has left the seabed so caked with minerals the freshwater that flows in turns immediately lethal.

Not that much freshwater flows in these days. That's why the sea is dying, or drying up, at the rate of more than three vertical feet per year - which on the gradual slope of the western shore can translate into 65 ft. of exposed seabed. Most of the damage has been done in the last half century, when almost all the water that once reached the Dead Sea was diverted to farms and taps.

The Jordan River, so mighty in the Bible, is today a puny creek that draws snarls from disappointed tourists. "Everything changed when we started diverting water from the Sea of Galilee," says Mira Edelstein of Friends of the Earth in the Middle East. "The Jordan River used to bring 1.3 billion cubic feet of water a year. Today it's 50 million. That's 2% of what it was."

At the same time, a unique and thirsty industry has been taking water from the sea, accelerating its decline. At the southern tip of the sea, the sprawling Dead Sea Works leaches huge quantities of the fertilizer potash from the seawater by funneling water through a canal into vast evaporation ponds in what once was the sea's southern basin. The Israeli company puts some of the water back, but combined with a similar operation on the Jordanian side the result is a net loss for an already shrinking lake. "It's the combined issue of the Jordan River not flowing in anymore and industry drawing out water from the south," Edelstein says. "No wonder the Dead Sea is dying."

To add insult to injury, it emerged yesterday that those largely responsible for bringing Britain's economy to its knees - bankers and finance workers - have scooped bonuses totalling 14 billion pounds this year. While the phone-hacking scandal will be investigated by a public inquiry led by a senior judge, there has been no equivalent investigation into the actions of bankers and the Government's failure to hold them to account for triggering the financial crisis.

There were growing calls for Westminster to lift its gaze from phone-hacking and focus on the threat to the livelihoods of millions.

David Cameron, speaking in Lagos, Nigeria, pledged to focus on issues that 'really matter' to people amid fears the Government is beginning to look paralysed by the phone-hacking furore. The Prime Minister, who cut short a tour of Africa last night to return to address MPs, said: 'It is important for the British Prime Minister and Government to get on with those things that really matter to Britain, which is making sure there are jobs and exports.'

Office of National Statistics figures showed that between April 2010 and March 2011, a total of 13.6 billion pounds in bonuses was paid out to workers in the 'finance and insurance' sector. They account for just 4 per cent of the workers in this country, but get about 40 per cent of the bonuses paid. The size of the massive windfall will outrage millions of hard-working Britons who face a daily battle to stay financially afloat during the economic downturn.

Their finances are under attack from tax rises, pay freezes or paltry pay rises, soaring gas bills, rip-off petrol prices - and no bonus from their boss. The figures reveal the average finance and insurance worker got a bonus of 12,500 pounds. The average worker in Britain, who does not get a bonus, has to work for six months to earn that much.

Some of the big bonus winners even work for banks which are part-owned by the taxpayer. There are 323 'key staff' at Royal Bank of Scotland who shared a pay and bonus pot of 375 million pounds last year, an average of 1.16 million pounds each. By comparison, the rest of the country is being crippled by the first fall in disposable household income since 1981, according to the ONS.

Anxiety over current and future hardships is driving many Greeks into the streets. But while the lines continue to get longer outside food banks, many of the wealthy are getting through the crisis more or less unscathed. The average Greek consumer is now forced to pay the third-highest VAT rate in Europe, the third-highest social insurance contributions and the second-highest fuel taxes.

Two-thirds of Greeks regularly pay their taxes as well. Indeed, "contrary to widespread views," as the Friedrich Ebert Stiftung study put it, these taxes are automatically deducted along with social contributions from the paychecks of Greeks employed in both the private and public sectors. It is mainly the small wealthy class that manages to cheat the authorities out of 40 billion euros in tax each year. That is the OECD's estimated volume of annual tax evasion. The Greek central bank puts the losses at somewhere between 15-20 billion euros.

These tax cheats have little to fear. As Panos Kazakos, an Athens-based professor of politics, puts it: "I have never seen a single person put in jail for tax evasion." Robolis adds that the government, which supposedly has no money available for social services, just published a list of companies that owe the state a total of 9 billion euros in social contributions - but it does nothing to get that money.

This injustice is what is making people in Greece so angry. The government has promised to change the system. But Robolis no longer has faith in its pledges. "This situation has been going on for 30 or more years," he complains. "They're just trying to protect themselves with these statements."