A horrifying municipal debt crisis is starting to unfold right in front of our eyes. It just did not happen as soon as she thought that it would. When most Americans think of our "debt problem", they think of the federal government. But the truth is that we have hundreds and hundreds of smaller "debt problems" all across the country. In 2012, cities such as Stockton, California and Harrisburg, Pennsylvania have already defaulted and a whole bunch of other cities and towns are headed down the exact same path.

Once we see the first major wave of municipal defaults, creditors will become much tighter with their money and that will cause even more municipalities to get into financial trouble. This crisis could start spinning out of control at any time. The frightening thing is that all of this is happening at a time when we are supposed to be having an "economic recovery". So what will things look like when the economy gets even worse than this? If hundreds of cities, towns and counties are barely able to keep their heads above water financially right now, what is going to happen when the next recession hits?

State governments are experiencing massive budget problems right now as well. For example, in California state government revenues for February 2012 were down by about 22 percent compared to February 2011. The state government is quickly running out of money once again, and nobody is quite sure how to fix California's rapidly deteriorating financial situation.

He added that Iran believes the talks should be based on “mutual cooperation.” Representatives from the P5+1 – the five permanent members of the UN Security Council plus Germany – have made it clear they expect Iran to meet its obligations under the Nuclear Non-Proliferation Treaty. As an NPT signatory Iran is obligated to allow International Atomic Energy Agency inspectors full access to its nuclear facilities, which Iran has refused to do.

Officials in Washington and Jerusalem have indicated they expect Iran to halt its controversial uranium enrichment program if it wants to avoid preemptive military strikes on its nuclear program. Iran on Monday confirmed it would return to nuclear talks, but rejected any “preconditions.” Iranian president Mahmoud Ahmadinejad on Tuesday went so far as to say Tehran would “punch the West in the mouth” if Washington and their allies sought to impose their will on Iran.

Nonetheless, key officials in Tehran – which is languishing under crippling economic sanctions – have already indicated willingness to compromise. Israeli prime minister Binyamin Netanyahu and defense minister Ehud Barak – both said to be proponents of a strike on Iran – have expressed deep skepticism about the outcome of the upcoming talks. “I don't believe that this amount of sanctions and pressure will bring the Iranian leadership to the conclusion that they have to stop their nuclear military program,” Barak told CNN on Sunday.

In the last few years, though, the anxiety has shifted a bit. Instead of worrying we'll be undercut on the price of manual labor, the concern is we could actually be out-competed in higher-end markets. You hear it when Democrats like President Obama talk about China winning the race on green jobs. And it came to my mind this week, thanks to a piece in Bloomberg Businessweek on China's growing prowess in heavy industry.

While China transformed itself into the world's top exporter by building light goods and electronics, the biggest chunk of its exports are now large, high-margin goods such as ships, locomotives, and construction equipment. Not only are China's capitalists moving in this direction, but they're getting a hand from the government. As Businessweek reports, "Equipment manufacturing, shipbuilding, and cars are among the industries slated to receive $2.5 billion from the government this year to improve technology and product quality."

This should be of some concern to US policy makers. Heavy machinery and transportation equipment are at the heart of the US industrial base. They're part of our Big Six manufacturing sectors, along with food, chemicals, electronics, and metal products. These are businesses where labor is a relatively small part of the overall cost of making the product, and where America's technologically advanced factories have traditionally given us an edge. If they founder, there's not much left to replace them.

Chinese firms might not be ready to start taking on US companies on their home turf, but they are in a good position to compete in the international market.

Indonesian President Susilo Bambang Yudhoyono said there were no immediate reports of casualties or damage in Aceh, the Indonesian province closest to the initial earthquake. But an aftershock of almost the same magnitude, less deep than the first quake, hit soon after he finished speaking. The first quake struck at 4.38 a.m EDT and an 8.2 magnitude aftershock just over two hours later, at 6.43 a.m. EDT. Two more strong aftershocks hit later.

The Pacific Tsunami Warning Center issued fresh tsunami warnings for the entire Indian Ocean after the aftershocks. Authorities in Indonesia said there were reports of sea-levels rising off Aceh, but by less than a metre (3.3 feet). But authorities in India's Andaman and Nicobar islands, to the north of where the quakes struck, said waves of up to 3.9 metres (13 feet) could hit there.

Individual countries, including Thailand, Indonesia, Sri Lanka and India, issued their own tsunami warnings and people near the coast in six Thai provinces were ordered to move to higher ground. Authorities shut down the international airport in the Thai beach resort province of Phuket. The quakes were also felt in Sri Lanka, where office workers in the capital, Colombo, fled their offices. In Bangladesh, where two tremors were felt, authorities said there appeared to be no threat of a tsunami.

On the eve of these talks – the first for over a year – Mr Ahmadinejad gave a defiant speech claiming that the central measure taken to increase the pressure on Iran's economy would have no effect. The European Union has agreed to stop buying oil from Iran by July 1 – and the state media in Tehran reported that the country had chosen to pre-empt this measure by halting exports to Greece, one of its biggest EU customers.

"They want to impose sanctions on our oil and we must say to them that we have that much saved that even if we didn't sell oil for two to three years, the country would manage easily," said Mr Ahmadinejad in a televised speech. "Whoever seeks to violate the rights of the Iranian nation will get a blow to the mouth," he added.

We have just learned about the true nature of Facebook's responses to subpoenas thanks to documents uncovered by the Boston Phoenix, an alternative weekly. While researching a story about a man dubbed the "Craigslist Killer," reporters at the Phoenix had access to "a huge trove of case files released by the Boston Police Department." And in the process of sifting through all of those documents, they discovered the Boston Police's subpoena of the suspect's Facebook information— as well as the data provided by the social network.

The data — which really did come in the form of an old-fashioned paper printout rather than as a digital file of some sort — included all of the suspect's wall posts, photos he'd uploaded, photos he'd been tagged in, a list of his Facebook friends, and "a long table of login and IP data." Based on a look at the actual documents, it appears the login and IP data actually lists which parts of Facebook the individual accessed — down to the photos, groups and profiles he viewed.

A statement from the organization posted on a militant website said Abu Qatada’s expulsion would open “an unnecessary door to evil that will harm (Britain) and its subjects.” Britain has been trying for years to deport the Palestinian-Jordanian Abu Qatada, whose real name is Omar Mahmoud Mohammed Othman. He has been described in both Spanish and British courts as a leading al-Qaeda figure in Europe and a threat to national security.

He spent six years in jail in Britain, although he has never been charged with any crime. He was freed last month on strict bail conditions that expire in three months, making British officials eager to find a solution. The British have been exploring the possibility of sending him to Jordan, where he has been convicted in absentia of terrorist offenses related to two alleged bomb plots in 1999 and 2000 and would face a retrial if returned.

But the European Court of Human Rights ruled in January that Abu Qatada cannot be sent back to Jordan because of a risk that evidence obtained through torture would be used against him if he is put on trial there. The al-Qaeda statement also invoked the possibility of torture in Jordan. “To deport him to a country known by everyone for its crimes, is something that we never accept and will not pass without (someone) being held accountable.” Jordan says it will guarantee Abu Qatada a fair trial.

This new way for the cash-strapped Greek state to raise money will "pay for the cost of using police materials and infrastructure, and allow to modernize them", the Ministry of Citizen Protection said in a statement. The Police services on offer were previously used in "exceptional cases" – escorting the transportation of dangerous material or art works and were free of charge. Now, Police services have a price-tag. If you need something special the hourly fee for patrol boats is €200, and €1500 for helicopters, according to the Proto Thema newspaper.

Even though the ministry said it would only accept such hires if they do not affect the security forces' operational capacity, only those with the cash will benefit from the initiative. The newspaper says the less wealthy will be left to deal with crime by themselves. The financial crisis left Greece with rising unemployment, a fast-growing crime rate and a surge in illegal immigration. Security has substantially deteriorated in the Greek capital in recent years, with previously safe and calm neighborhoods of the city becoming literally off limits after nightfall.

The Athens City Council described the situation as, "The city's historic center and other major areas are suffering desertification, all manner of criminal activity and manifestations of violence, insecurity, lawlessness, the impoverishment of significant numbers of people – both native inhabitants and foreign nationals, illegal prostitution and illegal drug trading." Youth unemployment is soaring as high as 50 per cent, driving some to leave the country, others to protest, and a few to resort to breaking the law.

The Eurozone is larger than the United States, so America's debt per capita also exceeds the Eurozone's. According to the Census Bureau, the US has a population of 313 million, whereas the Eurozone has a population in excess of 331 million. Republican presidential candidate Mitt Romney frequently warns that the United States should not become like Greece. "We need to rein in government and unleash the extraordinary vitality and creativity of the American people," Romney wrote in a December op-ed. "We must not wait to suffer a crisis like Greece's or Portugal's to right the ship of state."

Since the troubled period began at the end of 2009, there has been a clear pattern to events: crisis, response, respite, new crisis. The latest recovery has been robust, but it was always a fantasy to believe that the ECB could solve all the euro's problems with its long-term refinancing operations, ladling out ultra-cheap three-year money to European banks. The current flare-up has three dimensions. The contingent cause of Spanish bond yields heading back into the danger zone (yields on 10-year debt were touching 6% on Tuesday night) was poor demand for bonds in last week's bond auctions.

Fears of contagion and growing opposition to Mario Monti's labour market reforms explain why the Italian stock market has been taking such a thumping, with the shares of badly hit banks suspended. A second factor is the emergence of political risk. Greece is holding an election early next month, and support has slumped for the two major parties that backed austerity in order to secure a second bailout from the European Union, the ECB and the International Monetary Fund earlier this year. The chances of the Greek public electing a government that repudiates the terms of the bailout is deemed to be high.

Analysts are also worrying about the outcome of the French presidential election, since the polls show that the socialist candidate François Hollande, who wants to rewrite the eurozone's painstakingly negotiated fiscal pact, has a good chance of defeating Nicolas Sarkozy in a run-off. Markets look at France, Italy, Spain, Portugal and Greece and see the potential for general strikes and civil strife as opposition to austerity hardens. It is not an outlook that inspires much confidence, so at the very best European markets face another two months of turbulence and uncertainty.

The mood of uneasy calm seen across Europe since the Greek bailout in February was shattered as financial markets took fright at evidence of a double-dip recession and growing popular opposition to welfare cuts and tax increases. Italy and Spain, the eurozone's third and fourth biggest economies, were at the centre of the market turmoil, with investors demanding an increasingly high premium for holding their bonds.

"Spain is right in the centre of a European storm," admitted finance minister Luis de Guindos, who declined to rule out an eventual bailout but insisted it could be avoided. In Italy, Mario Monti's coalition government is facing growing hostility to reforms of its labour market, while the sheer size of the country's public debt made it an obvious target for nervous traders. The prospect of Greek voters rejecting austerity and the French electorate denying Nicolas Sarkozy a second term as president was also weighing on the markets.

The Greek government said it would hold a general election on 6 May, with opinion polls showing support for the mainstream pro-austerity parties is too weak to allow them to form a government. "Spain is a big focus right now and even Greece will be coming back into the picture as it looks for another tranche of aid, so this eurozone debt tragedy is not going away, but seems to be getting worse," said Daniel Hwang, senior currency strategist at Forex.com in New York.

The markets closed in New York with Wall Street completing a fifth successive day of decline, with the Dow Jones having lost 213 points. In London, the FTSE 100 closed down 128 points, at 5,595.55. Oil prices also fell sharply amid concerns about the prospects for growth on both sides of the Atlantic and in Asia, with the price of a barrel of crude falling by more than $2. In contrast, safe haven assets such as gold, the US dollar and bonds in the US, Germany and Britain were all in demand.

After a tornado ripped through Springfield, Massachusetts, last year, R Paula Lazzari's home was badly damaged. The retired teacher found broken windows, missing siding and a damaged roof. Her insurer offered to fund repairs for one broken window and some of the siding. It took nine months - and mediation services from an independent adjuster and the Massachusetts Division of Insurance - to get her bills paid, according to the parties involved.

In this era of unpredictable weather patterns, Lazzari's case is not unique. Insurance companies are raising rates, cutting coverage, balking at some payouts and generally shifting more expense and liability to homeowners, according to reports from the industry and its critics. "Insurance companies have significantly and methodically decreased their financial responsibility for weather catastrophes like hurricanes, tornados and floods in recent years," the Consumer Federation of America said in a statement after studying industry data.

The industry concedes that it is trying to avoid getting trounced by those same punishing weather patterns. "Last year (2011) was an extraordinary year for natural disasters," said Michael Barry of the Insurance Information Institute (III), an industry trade group. "Insurers have taken a step back to assess whether or not they can absorb severe losses."

That leaves two options: raising private capital or turning to the EU for bailout funds. Prospects for a private sector solution are poor. Nothing on the horizon looks likely to persuade foreign fund managers to invest, such is the fear of the banks' growing bad loans, their holdings of shaky sovereign debt and the worsening economy. Already battered by a property market crash that began four years ago and continues unabated, few Spanish banks are able to borrow funds on wholesale credit markets and the majority are instead relying on the European Central Bank.

"Most are currently on liquidity life support from the ECB but asset quality continues to deteriorate as house prices keep falling and unemployment is still rising," said Georg Grodzki, head of credit research at Legal & General Investment Management. "Their funding remains constrained and competition for deposits intense," he told Reuters. Economy Minister Luis De Guindos told Reuters last week that all Spanish banks had met capital requirements set by the European Banking Authority under a 115-billion-euro recapitalization plan decided by European Union leaders in December.

But fund managers remain skeptical due to the slow-burning property crash. They include Mark Glazener, head of global equities at Dutch asset manager Robeco, who sold off his exposure to Spain at the end of last year. "Given the scale of over-building over all these years, the present provisioning that the banks have made does not appear to be enough," he said.

The decision to cast out Bo Xilai from the party's Central Committee and its Politburo effectively ends the career of the former high-flyer, widely seen as pressing for a top post in China's next leadership to be decided later this year. The official Xinhua news agency confirmed a Reuters report several hours earlier on Tuesday that Bo had been suspended from his party posts, and separately reported that his wife, Gu Kailai, was suspected in the murder of Briton Neil Heywood.

"Comrade Bo Xilai is suspected of being involved in serious disciplinary violations," said Xinhua, citing a decision by the central party leadership to banish Bo from its top ranks. "Police set up a team to reinvestigate the case of the British national Neil Heywood who was found dead in Chongqing," the news agency said, referring to the sprawling southwestern municipality where Bo was party chief until he was dismissed in March as a scandal surrounding him unfolded.

It was the most dramatic convulsion in China's secretive leadership since 1989, when Jiang Zemin was plucked from obscurity to head the Communist Party after the bloody crackdown on democracy protests in Beijing. Bo's ouster has sparked public contention and revealed friction among China's leaders, pitting reformist Premier Wen Jiabao against conservative officials who sources have said were dismayed by the upheavals months before the party congress that anoints the new leadership. There were even outlandish rumors of an attempted coup.

Prime Minister David Cameron said he was "very pleased" with the news. "It's quite right that we have a proper legal process, although sometimes you can be frustrated by how long things take," he added. The court's decision is one of its most important since 9/11 because it approves of human rights in US maximum security prisons, making it easier for the UK to send suspects to its closest ally. There could still hypothetically be an appeal against the court's ruling in its final Grand Chamber - but in practice, very few cases are re-examined in that final forum.

The men have three months to try to persuade the Grand Chamber to reopen the entire case and examine it. If the men fail to launch an appeal, they will be extradited to the United States. The family of one of the men, Babar Ahmad, who has been held for a record of nearly eight years without trial, said he would fight on against extradition.

Home Secretary Theresa May welcomed the ruling, and said she would work to ensure that the suspects were handed over to the US authorities "as quickly as possible". The US Justice Department also said it was "pleased" about the decision on the five. "We look forward to the court's decision becoming final and to the extradition of these defendants to stand trial in the United States," it said in a statement.