CHINA - A shockwave is looming in China’s multi trillion dollar “shadow banking” system, with an unprecedented default only days away on a $500 million investment product sold to hundreds of people. Staff at China’s biggest bank ICBC pushed the “Credit Equals Gold #1 Trust Product” by promising returns of 10 percent a year, far more than traditional deposits, investors say. But the coal company it was supposed to fund never obtained key licences for its activities, state media reported, and now the firm that structured it, China Credit Trust, says it may not be able to repay 3.0 billion yuan ($492 million) due on Friday.

USA - With no end in sight to California’s drought, farmers in the San Joaquin Valley fear federal officials could seize water in the San Luis Reservoir intended for their crops. The Fresno Bee says dropping reservoir levels across the state are leading to struggles over water set aside via the Central Valley Project, a federally-run network of reservoirs, pumping plants and canals. That includes about 340,000 acre-feet of water stored at San Luis Reservoir.

GERMANY - In the run-up to the Munich Security Conference, prominent German foreign policy specialists are calling for "German Leadership" in the EU's foreign and military policy activities.

USA - The worst selloff in emerging-market currencies in five years is beginning to reveal the extent of the fallout from the Federal Reserve’s tapering of monetary stimulus, compounded by political and financial instability. The Turkish lira plunged to a record low and South Africa’s rand fell yesterday to a level weaker than 11 per dollar for the first time since 2008. Investors are losing confidence in some of the biggest developing nations, extending the currency-market rout triggered last year when the Fed first signaled it would scale back stimulus.

USA - As California faces the worst drought in its 163-year history with no hint of relief in sight, some scientists are calling the event a red flag for the future of the nation. Governor Jerry Brown raised the issue in his State of the State address Wednesday, saying “we do not know how much our current problem derives from the build-up of heat-trapping gases, but we can take this drought as a stark warning of things to come.”

UK - Used by millions of Britons every day, they can increase blood pressure by killing off “good” bacteria that help blood vessels relax. Professor Amrita Ahluwalia, of Queen Mary University of London, said: “Killing off all these bugs each day is a disaster when small rises in blood pressure have significant impact on morbidity and mortality from heart disease and stroke.” Corsodyl makers GlaxoSmithKline said their product was for short-term use to stop plaque and prevent gum disease.

BAHRAIN - Unrest has gripped the Persian Gulf kingdom - which hosts the US Navy's Fifth Fleet and participates in US-led military coalitions - since February 2011, when an Arab Spring-inspired uprising launched by the Shiite majority demanded reforms. Protesters have voiced concerns about discrimination from the Sunni minority - an accusation which the government denies. It is now feared that Sunday’s clashes could trigger new tensions between the Shiite opposition and the Sunni-led government, just as efforts to revive reconciliation talks were showing some signs of progress.

USA - Let’s face it: a disturbingly large portion of the American electorate are not-so-knowledgeable about their world. As of 2008, 30% still maintained that Saddam Hussein was stockpiling weapons of mass destruction and 18% think the sun revolves around the earth. So, when our friends in the press ran headlines about how most Americans had heard “nothing at all” about President Obama’s recent surveillance reforms, I would have been surprised by exactly the opposite.

CHINA - In what’s been described as the biggest online outage in history, China’s Internet went completely down Tuesday afternoon. Theories have abounded since as to what caused it, and whether the crash was intentional on the part of the Chinese government to block citizens from seeing a controversial news story on the nation’s leadership and their offshore bank accounts. The historic outage, which affected about 500 million Chinese, began at 3:30 pm local time on January 21, according to GreatFire.org, a group that monitors China’s efforts to censor Internet information.

USA - The effectiveness of the Fed’s aggressive monetary policy can best be gauged by the stock market which has been soaring for five years, though it has gotten a little wobbly recently, up there at its dizzying heights. The hope is that it won’t lose balance altogether and topple, but that it might sit down a while and catch its breath before climbing into what mountaineers call the “death zone,” where oxygen is so sparse that human life, or hardly any life, can be sustained for longer than a brief period. It’s where hopes go to die.

CHINA/JAPAN - The FT's Gideon Rachman notes, "this is not a situation that is getting better; it is getting worse." We have two countries, each building up their militaries while insisting they must do so to counter the threat of their regional rival. China and Japan’s war of words reveals a larger struggle for regional influence akin to a mini Cold War. Each country insists it loves peace, and uses scare tactics to try to paint its opponent as a hawkish boogeyman. Sound familiar to anyone else?

USA - A growing number of farmers are abandoning genetically modified seeds, but it’s not because they are ideologically opposed to the industry. Simply put, they say non-GMO crops are more productive and profitable. Modern Farmer magazine discovered that there is a movement among farmers abandoning genetically modified organisms (GMO) because of simple economics. “We get the same or better yields, and we save money up front,” crop consultant and farmer Aaron Bloom said of non-GMO seeds. Bloom has been experimenting with non-GMO seeds for five years and he has discovered that non-GMO is more profitable.

EUROPE - Fears after scientists link two plagues that occurred 800 years apart. A strain of plague which has killed up to 100 million people could strike again, scientists warn. They have linked the Black Death, which killed 50 million Europeans in the 1300s, and The Plague of Justinian, which struck 800 years earlier, suggesting they were caused by ‘distinct’ strains of the same pathogen. Dave Wagner, professor in the Center for Microbial Genetics and Genomics at Northern Arizona University warned that it could return in the future.

USA - Data related to food stamp rolls is one way to gain real insight into the true state of the US economy. In an excellent article from the Associate Press, we learn several things. For the first time ever, working-age people now make up the majority in US households that rely on food stamps. Food stamp participation since 1980 has grown the fastest among workers with some college training. By education, about 28 percent of food stamp households are headed by a person with at least some college training, up from 8 percent in 1980.

UK - Royal Bank of Scotland is on course for its largest loss since the crash because of blunders under former boss Fred ‘the Shred’ Goodwin. It is having to set aside £3 billion to cover expected costs for legal actions and compensation for mis-selling thousands of policies. The massive black hole illustrates the long-lasting damage done by Goodwin’s leadership before the bank was bailed out with £45 billion of taxpayers’ money in 2008. RBS is now on course to lose around £8 billion this year, its biggest deficit since its record £24 billion loss more than five years ago.