USA - The six largest US banks had their trading positions compared to a “global market shock” as part of the latest round of government-mandated stress tests. The tests included a doubling of German sovereign debt spreads and a 56 per cent drop in the price of benchmark oil. The US Federal Reserve’s annual exam calls for banks to test their balance sheets to ensure they would be adequately capitalised to withstand a “severely adverse” economic scenario. For Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley, the stress tests included a one-off instantaneous shock to their trading positions and counterparty exposures that mimic market movements last seen during the height of the financial crisis in the second half of 2008.

NAPLES, Italy - Bus services in the southern Italian city of Naples have ground to a halt after the city transport company ran out of money for fuel. Valeria Peti, of the ANM transport company, says only 30 of the usual 300 buses left the depot Wednesday morning, and they all had to return before their tanks ran dry. The company had announced overnight that service for the morning rush hour couldn't be guaranteed. Naples' municipal services have been in the news before, most notably when mountains of garbage have piled up. Peti says in this case, the company that provides gas for city buses refused to replenish them without payment guarantees. Limited service is expected later Wednesday.

USA - The US economy posted a stunning drop of 0.1 percent in the fourth quarter, defying expectations for slow growth and possibly providing incentive for more Federal Reserve stimulus. The economy shrank from October through December for the first time since the recession ended, hurt by the biggest cut in defense spending in 40 years, fewer exports and sluggish growth in company stockpiles. The Commerce Department said Wednesday that the economy contracted at an annual rate of 0.1 percent in the fourth quarter. That's a sharp slowdown from the 3.1 percent growth rate in the July-September quarter.

SPAIN - The downturn in the Spanish economy worsened in the final three months of 2012, as output fell 1.8% from a year earlier, official data has indicated. Output shrank 0.7% from the previous quarter - the worst performance in Spain since the 2009 global recession. Spain suffers from uncompetitiveness inside the eurozone, a troubled banking sector, excessive household and company debts, and harsh government austerity. Prime Minister Mariano Rajoy responded by announcing a new stimulus package. “The crisis of the real economy is far from being over.”

ZIMBABWE - Zimbabwe's Finance Minister Tendai Biti has said that the country only had $217 (£138) left in its public account last week after paying civil servants. However, he said that the following day some $30 million of revenue had been paid in. Mr Biti told the BBC he made the revelation in order to emphasise that the government was unable to finance elections, not that it was insolvent. Mr Biti has previously complained that diamond mining companies have not been paying revenues to the government. The power-sharing government set up in 2009 ended years of hyperinflation by using the US dollar, but the economy remains fragile.

ISRAEL - Israeli forces attacked a convoy on the Syrian-Lebanese border on Wednesday, sources told Reuters, after Israelis warned their Lebanese enemy Hezbollah against using chaos in Syria to acquire anti-aircraft missiles or chemical weapons. "The target was a truck loaded with weapons, heading from Syria to Lebanon," said one Western diplomat, adding that the consignment seemed unlikely to have included chemical weapons. "It attacked trucks carrying sophisticated weapons from the regime to Hezbollah," the source said, adding that it took place inside Syria, though the border is poorly defined in the area.

USA - You can thank the reckless money printing that the Federal Reserve has been doing for the incredible bull market that we have seen in recent months. When the Federal Reserve does more “quantitative easing”, it is the financial markets that benefit the most.

NEW YORK, USA - Stocks may be near record highs, but they are not terribly expensive, at least by one measure. Last week the broad Standard & Poor's 500 index closed above 1,500 for the first time in five years. This week the Dow Jones industrial average has been flirting with 14,000, a level it hasn't seen since October 2007. Robert Shiller, a famed Yale University economist, said historically low interest rates, which are making other investments less fruitful, were probably fueling the current rally. The Federal Reserve has been pumping money into the economy to lure investors into riskier assets like stocks.

USA - There is a new twist in the London Whale trading scandal that cost JPMorgan Chase $6.2 billion in trading losses last year. Some of the firm's own traders bet against the very derivatives positions placed by its chief investment office, said three people familiar with the matter.

USA - The nation's long-term fiscal outlook hasn't significantly improved following the recent agreement between Congress and the White House over tax and spending issues, according to a new analysis. The "fiscal cliff" deal, combined with the debt-limit agreement of August 2011, only slightly delays the United States reaching debt-to-gross domestic product levels that would damage the economy and risk another fiscal crisis, according to a report from the Peter G Peterson Foundation released on Tuesday. "The primary goal of any sustainable fiscal policy is to stabilize the debt as a share of the economy and put it on a downward path, and yet our nation is still heading toward debt levels of 200 percent of GDP and beyond," he said.

USA - On November 22, 2012, the Los Angeles Times published an alarming piece of news entitled “Cyber Corps program trains spies for the digital age”. The “cyber-warriors” who are headed for organizations such as the CIA, NSC, FBI, the Pentagon and so on, are trained to stalk, “rifle through trash, sneak a tracking device on cars and plant false information on Facebook.”

UK - Philip Hammond has announced that hundreds of troops could be sent to Mali as MPs raised fears that “mission creep” could turn the African operation into Britain’s Vietnam. The Defence Secretary said he knew of the risks that the UK could become involved in a lengthy conflict but insisted the government had placed strict limits on deploying forces to help the Malian government repel fighters linked to al Qaeda. There are no plans for British troops to take on a “combat” role on the front-line but up to 40 will be deployed inside Mali itself as part of a European Union force to train Malian troops. A former Labour Cabinet minister suggested that Mali could become Britain's "Vietnam". Frank Dobson, health secretary under Tony Blair, said: "The American catastrophe in Vietnam started off with American troops in a training capacity."

UK - It is named after the Celtic god of thunder, can fly faster than the speed of sound and evades enemy radar with its single-wing stealth design. This is Taranis, Britain’s latest pilotless combat aircraft, which is even capable of selecting its own targets. The revolutionary superdrone is due to make its maiden flight in the next few weeks and could spearhead the fight against terrorism in Africa. Military chiefs believe Taranis’s ground-breaking technology will allow a powerful new generation of drones equipped with deadly payloads to fly from British bases to attack targets worldwide. But the new developments in pilotless aircraft are controversial as they allow the possibility of autonomous computers targeting and killing enemy combatants outside human control.

CAIRO, EGYPT – The head of the Egyptian military warned political conflict could lead to the collapse of the state and said protecting the Suez Canal was one of the main objectives of the army deployment to nearby cities shaken by violence. Protesters defied a curfew in towns along the Suez Canal overnight, attacking police stations after President Mohamed Morsi imposed emergency rule to end days of clashes that have killed at least 52 people.

UK - As British jihadists venture abroad to capitalise on the aftermath of the Arab Spring and then return to the UK, they are likely to bring a greater level of violence back home, Maajid Nawaz, the chairman of the Quilliam Foundation, suggested.