The prime ministers of the two neighboring countries held a meeting in Russia’s Northern capital St Petersburg on Tuesday. Describing the current state of bilateral relations between Russia and China, Putin pointed out that they “do not depend on external conjuncture and develop dynamically in all areas, including politics, economy, science, education and culture”.

The Russian head of the government also expressed confidence that “today’s talks and joint work will give another powerful impetus to the development of interstate relations," cited Itar-Tass. The Chinese premier arrived in St Petersburg on the eve of the ceremony closing the Year of China in Russia and the Year of Russia in China.

Wen Jiabao noted that over the past year, significant progress has been reached in relations between the two countries. Thanks to regularly held summits, he noted, Moscow and Beijing can coordinate their policies. "China and Russia support each other in different issues, including those that concern sovereignty, and thus they ensure security in the region and in the world," he added. The Chinese premier also urged the necessity to increase efforts in strengthening stability in the border regions.

"China and Russia are both committed to restructuring their economy and addressing the risks and adverse influence in the global economy," Hu said during his talks with the visiting Russian president. The Chinese leader suggested that China and Russia expand their cooperation in investment, high technology, energy, large-scale projects and trans-border infrastructure as well as sub-national cooperation.

The two countries are also expected to sign a host of agreements and look to firm up their energy cooperation. Last year Russia supplied 15 million metric tons of crude oil through exclusive pipelines, and the two countries are in talks to reach a similar agreement to supply Russian natural gas to energy-hungry China. The Russian delegation included the heads of Russia’s energy giants Gazprom, Rosneft and Transneft, and other major Russian business people.

While energy is high on the agenda, a long-anticipated gas deal that could see Russia supply 70 billion cubic meters of gas a year directly to China, was not signed due to pricing disagreements, Gazprom said on Monday. Beijing is also looking to clinch agreements on high-end military technology which Moscow which have withheld so far, according to analysts. Russia and China have also signed a cooperation agreement between the Skolkovo Foundation and the Beijing-based Z-Park. The agreement marks a transition to full-scale collaboration in high technologies between the two countries.

"Recently joint navy exercises were held in the Yellow Sea, and they were the first of such exercises. We have agreed with Chairman Hu that we will continue such cooperation," Putin said following a meeting with his Chinese counterpart Hu Jintao in Beijing. The Russian leader said that security in the Asia-Pacific region was a top priority for both countries and they will work together to further develop ties.

"We favor the formation of an open and equal-minded security and cooperation architecture in the region, based on the principles of international law," Putin said. Russian and Chinese naval forces recently held six days of military drills in the Yellow Sea. The first drills of their kind, they included anti-submarine exercises and hijacked vessel rescue operations. Russia deployed four warships from its Pacific fleet for the drills with 16 Chinese ships and two submarines.

The strengthening of Sino-Russian relations also serves to counterbalance US influence in Asia.

The share prices of the big American banks, which are mostly trading below book value, tell the tale. And bank earnings for the second quarter, most of them to be reported next month, are expected to underscore the gloom. Many on Wall Street say pink slips are likely to follow.

"If things don't get better, then I would expect staffing levels to come down for sure," said Alan Johnson, chief executive of Wall Street compensation consulting firm Johnson Associates, who estimated that banks may cut another 5 percent of their workforce by year's end.

"When banks do that reassessment, it will go beyond just the short-term economics. They'll be asking, 'Where is the global economy going? And is there going to be a recovery, or more of a struggle than a recovery?'" As Europe lurches from one crisis to the next - on Tuesday, Spain said that it is shut out of credit markets - and economic growth slows in the United States, the banking business has become tough. Major developing economies such as Brazil, China and India have also been slowing, providing little relief.

Trading volumes are low and merger activity has fallen, while low interest rates are translating into lower profits on lending.

But if nobody does, the consequences will be terrible. The brinkmanship between the governments is over how much help the northerners, led by Germany, should give the southerners. The core is effectively threatening the peripheral countries with bankruptcy if they don’t cut their deficits and reform their economies.

The periphery is saying that, if they collapse, so will the entire single currency which has been so beneficial to Germany’s economy. The game is being played out transparently in Greece and covertly in Spain. But even if the core eventually decides to help the periphery, there is a struggle of whether the aid should come from governments or from the ECB. Politicians would like the central bank to do the heavy lifting to avoid having to confront taxpayers with an explicit bill. But the ECB doesn’t think it is its job to help governments, arguing that such support violates the Maastricht Treaty.

This standoff is making it hard to devise a Plan B to cope with what is now a clear and present danger: an explosion in the euro zone. Of course, all hell might not break loose. And, if it does, some clever compromises might be found. But multi-dimensional chicken certainly heightens the risks.

Later today, the company will announce a new warning system that will alert Gmail users when Google believes their accounts are being targeted by state-sponsored attacks. The new system isn't a response to a specific event or directed at any one country, but is part and parcel of Google's recent set of policy changes meant to allow users to protect themselves from malicious activity brought on by state actors. It also has the effect of making it more difficult for authoritarian regimes to target political and social activists by hacking their private communications.

"We are constantly on the lookout for malicious activity on our systems, in particular attempts by third parties to log into users' accounts unauthorized. When we have specific intelligence - either directly from users or from our own monitoring efforts - we show clear warning signs and put in place extra roadblocks to thwart these bad actors," reads a note to users by Eric Grosse, Google's vice president for security engineering, to be posted later today on Google's Online Security blog, obtained in advance by The Cable. "Today, we're taking that a step further for a subset of our users, who we believe may be the target of state-sponsored attacks."

When Google's internal systems monitoring suspicious internet activity, such as suspicious log-in attempts, conclude that such activities include the involvement of states or state-backed initiatives, the user will now receive a specialized, more prominent warning. The warning doesn't necessarily mean that a user's account has been hijacked, but is meant to alert users that Google believes a state sponsored attack has been attempted so they can increase their security vigilance.

Google wants to be clear they are not singling out any one government for criticism and that the effort is about giving users transparency about what is going on with their accounts, not about highlighting the malicious actions of foreign states.

Closeted gay people historically used bright colors to signal their homosexuality to each other. Oscar Wilde was famous for wearing a trademark green carnation on his lapel, and the flower is thought to have been used by him and other Londoners and Parisians of the late 19th and early 20th centuries to quietly express their orientation. Novelist Robert Hitchens described the phenomenon in 1894’s The Green Carnation, and the book in part spurred Wilde’s trial for sodomy.

Yellow was used for the same purpose in Australia. According to the book Sunshine and Rainbows, a study of gay culture in Queensland, “If you wanted to attract the attention of the same sex, displaying a pair of bright yellow socks often did the trick.” During the Holocaust, gay men were forced to wear pink triangles, and that symbol has since been reclaimed by the gay community. Purple also became a popular symbol of gay pride in the 1960s and 1970s, when San Franciscans tried to make a symbol of “the Purple Hand” and gay Bostonians put up posters emblazoned with a purple rhino.

The rainbow, however, wasn’t popularized as an official symbol of the gay community until the 1970s. In 1978, San Francisco artist Gilbert Baker designed what is believed to be the first modern gay pride flag by combining eight stripes, each a different color with its own symbolism: pink for sex, red for life, orange for healing, yellow for sunlight, green for nature, blue for art, indigo for harmony, and violet for the human spirit.

When he wanted to manufacture the flag for sale, he found that hot pink wasn’t as available as the other colors, and so the flag dropped to seven colors. Baker later dropped indigo to maintain an even number, and the flag arrived at its contemporary six colors. When San Francisco gay activists marched to protest the 1978 assassination of city supervisor Harvey Milk, they marched with Baker’s flags.

Of course, rainbows and rainbow flags carry significance outside the LGBT community. The rainbow is an important symbol in the Bible, representing a promise of peace from God to Noah, and some Christian groups have used that symbol in their iconography.

Egypt's ruling military council has issued the parliament a 48-hour ultimatum to agree to a constitutional assembly, or contend with one decided on by the generals. Protesters are rallying for the death penalty for former President Hosni Mubarak, who has been sentenced to life in prison. The demonstrators are also indignant because six former Mubarak-era senior security officials have been acquitted of involvement in the deaths of hundreds of protesters during Egypt’s uprising last year.

Many protesters are expressing frustration that the choice of presidential candidates they have been given is no choice at all, says RT's Tom Barton who was in Tahrir Square late Tuesday. He says Egypt's Islamists are trying to use the protests for their own benefit ahead of the looming second round of the presidential vote, and seem eager to capitalize on the unrest. Islamist candidate Mohamed Morsi is from the Muslim Brotherhood. Morsi has already promised that if he wins he will drag Mubarak back to trial and try to get a death sentence.

His opponents say the Muslim Brotherhood is a religiously conservative group trying to highjack the revolution. Protesters seem just as angry with presidential candidate Ahmad Shafiq because of his past: Shafiq was Prime Minister during Mubarak’s rule. The demonstrators say this candidate should be barred from the election because of his close links with the former regime. So for Shafiq the task is to distance himself from Mubarak and the ruling military council as much as possible.

Huge demos are to be seen not just in Cairo, where there could be as many as a million protesters involved, but throughout the country. Many Egyptians say the revolution is actually going to end with very little change for them. Dr Conn Hallinan, contributing editor at Foreign Policy in Focus, says it's likely that the military is working to extend the Egyptian impasse, and therefore extend its rule over the country. “The military has set things up in such a way that they will continue as a major force,” he told RT.

Robert Ward chief executive of the multi-billion dollar and almost five hundred year old institution said Lloyd's may have to write-down on its £58.9 billion investment portfolio if the euro collapses. In the interview for The Sunday Telegraph he explained the market has put in place a contingency plan to switch euro underwriting to multi-currency claims settlements. It seems Lloyds believes ‘grexit’ is looking more and more likely day by day. Insurers are a good reference point on this, since risk management lies at the very heart of insurance and reinsurance.

London as well as Germany are two of the key global long-term risk management markets, counting on extensive expertise and experience in such potentially catastrophic financial upheavals. Another major insurer providing credit insurance for Eurozone trade – the Franco-German Euler Hermes Group – has also stated it would be reducing coverage for trade with Greece. Clearly, a tell-tale sign that a country is about to go bust is when credit insurance providers decide to stop trading with it.

Also going into Orange Alert Mode are the German mega-bankers. Last weekend Juergen Fitschen, co-chief executive of Deutsche Bank, described Greece as a "failed state" run by corrupt politicians adding that even though he did not think that if Greece exits the euro that would immediately lead to the collapse of the eurozone, he was nevertheless jittery about the whole matter adding that “what we need to do is prepare for that eventuality."

Correct, Juergen! If Greece goes, then the temptation for Portugal, Ireland, Spain, Italy and others to follow suit would indeed be great. And maybe we should not just be focusing on the weak end of the Eurozone – Greece, Portugal, Spain, Italy – but should also turn an eye on its strong end: because even you Germans might – for very different reasons – end up realizing that you too would be far better off dumping the euro and going back to the proverbially strong Deutsch Mark.

Then, Germany would have no need to bail-out and rough up “Today Greece, tomorrow Europe!”. As German interior minister Hans-Peter Friedrich just told the Leipziger Volkszeitung newspaper, Germany was prepared to help rescue Greece but only if it helps itself and honours its agreements, adding that “We're not willing to pour money into a bottomless pit.”

The Bloomberg helpdesk described it as "an internal function which is set up to test." The news comes in the wake of the heated discussions over the future of the euro zone and the membership of Greece. While many experts insist that Greece should leave the Euro and default, some suggest it should remain in the union and introduce a parallel currency to the Euro to repay the country’s debt.

The Head of the European Investment Bank Werner Hoyer said on Tuesday that Greece will be able to remain a member of the union. “Greece will have the opportunity to solve the huge problems that it is facing. Continuing support from the EU will contribute to this, in case, of course, the Greeks would want that,” Hoyer said.

And a survey at the weekend showed that Greeks prefer to stick to the Euro and not revert to the old drachma. The Greek Drachma details have now been taken down from the Bloomberg service.

Moody's said its move was driven in part by 'the increased risk of further shocks emanating from the euro area debt crisis in combination with the banks' limited loss-absorption capacity.' Despite the downgrading of the banks, world markets rose, buoyed by the prospect of action from the European Central Bank which is due to meet tomorrow to discuss the crisis.

Germany's DAX rose 1.5 per cent while the FTSE re-opened following the Jubilee four-day weekend up 1.3 per cent at 5,336.86 at lunch time. The ECB isn't likely to take any new steps that will address immediate concerns when it meets, analysts say, even as anxiety builds over the deteriorating outlook for Europe's economy and banking system.

Indeed Herman van Rompuy, European Council president, will detail long term plans for eurozone integration that are not intended to deal with Spain's crisis as it asks for help. The request for aid comes as the European Union unveiled plans to stop taxpayers' money from being used to bail out failed banks.

Treasury Minister Cristobal Montoro sent out the dramatic distress signal in a radio interview about the impact of his country's banking crisis on government borrowing, saying that at current rates, financial markets were effectively shut to Spain. "The risk premium says Spain doesn't have the market door open," Montoro said on Onda Cero radio. "The risk premium says that as a state we have a problem in accessing markets, when we need to refinance our debt.

The country is beset by bank debts triggered by the bursting of a real estate bubble in 2008, aggravated by overspending by its autonomous regions.

Only a fortnight ago all the attention was being lavished on France's new president, François Hollande, being sworn in in Paris as Monsieur Growth and rushing off on his first assignment to challenge Europe's Frau Austerity, Chancellor Angela Merkel. "We need new solutions. Everything's on the table," Hollande pledged, meaning he would force Merkel to remove the noseclip and consider things that give off a foul odour in Berlin, foremost among them eurobonds – Germany solving the crisis at a stroke by agreeing to underwrite the debt of Spain, Greece, Italy and all the rest. Fat chance.

By Saturday the growth versus austerity contest had receded as Merkel turned the tables on Hollande. It was her turn to declare there should be no taboos in grappling with the hard options facing Europe's leaders as they wait to see what will happen in Greece and Spain, and plot their next moves at what is shaping up to be a momentous summit at the end of the month.

Merkel appeared to be calling not only Hollande's but France's bluff. By announcing there could be no censorship of the eurozone to-do list, she meant tabling radical, federalist steps involving gradual loss of national sovereignty over budgetary, fiscal, social, pensions, and labour market policies with the aim of forging a new European political union over five to 10 years. The USE – United States of Europe – is back. For the eurozone, at least. Such "political union", surrendering fundamental powers to Brussels, Luxembourg and Strasbourg, has always been several steps too far for the French to consider.

In the third year of muddling through, the choices facing Europe's leaders are getting starker – the death of the euro or the birth of a new European federation.

The outcome would be that the South - including Spain, Italy and Greece - would require a constant influx of cash from their northern neighbors. "It would be a German empire with the periphery as the hinterland," Soros said of the European Union.

He said the eurozone is likely to survive because a breakup would be "devastating" for its member states, including Germany, noting that "Germany is likely to do what is necessary to preserve the euro - but nothing more."

Soros has been sounding the alarm about the eurozone crisis for months. In the words of Felix Salmon, Reuters' financial blogger, Soros was "the winner by far of the most-talked-about-person-in-Davos award" at the World Economic Forum meeting in Davos in January "because he's happy being brutally honest, and because he's giving voice to the plutocrats' darkest fears."

Yet the deluded, self-aggrandising EU elite – currently seeking an unbelievable 6.8 per cent budget increase – think nothing of squandering your money on vanity projects which contribute zero to solving the ever-deepening crisis. As a report by the Open Europe think-tank reveals, the EU’s bloated budget could be cut by £350 million simply by scrapping its many pointless quangos. Closing the European Parliament’s additional building in Strasbourg – which is empty for 317 days a year and exists only as a sop to France – would claw back another £146 million.

The list goes on, with Open Europe saying that, by slashing waste, and refocusing the EU budget on boosting jobs and growth, a total of £33 billion could be saved. The tragedy, of course, is that there is no chance of the eurocrats listening to anybody but themselves.

History will not only damn the current generation of European politicians for being useless. It will also record their breathtaking arrogance. They could not be in charge at a worse – or more financially perilous – time.