The group, which follows state fiscal conditions and advocates for limited spending and taxes, said the deficit calculations that states make "do not offer a full picture of the states' liabilities and can rely on budget gimmicks and accounting games to hide the extent of the deficit."

The housing bust, financial crisis and economic recession caused states' tax revenue to plunge, and huge holes have emerged in their budgets over the last few years. Because all states except Vermont must end their fiscal years with balanced budgets, states have scrambled to cut spending, hike taxes, borrow and turn to the federal government for help.

Taxpayers are worried the states' poor fiscal health will persist for a long time and some Republicans in Congress have questioned whether the situation is worse than the states say.

Interim leader Mustafa Abdel Jalil said on Sunday, during his speech to the nation in Benghazi to formally declare the country's liberation from the ousted regime of Muammar Ghadafi, that sharia would be Libya's principal law. "Any law that violates sharia is null and void legally," he said, citing as an example the law on marriage passed during the slain dictator's 42-year tenure that imposed restrictions on polygamy, which is permitted in Islam. "The law of divorce and marriage... This law is contrary to sharia and it is stopped," Abdel Jalil said.

His comments have provoked criticism and calls for restraint both in Libya and in Europe, amid fears that the Arab Spring may give rise to a potentially intolerant Islamist resurgence. Many Libyans awaiting Sunday's historic speech expressed surprise at the decision by the National Transitional Council leader to mention the role of sharia law in the new country before addressing such important issues as security and education.

In his speech, Abdel Jalil also announced the introduction of Islamic banking in Libya in keeping with sharia which prohibits the earning of interest, or riba in Arabic, that is considered a form of usury.

Though the country's independent election commission hasn't announced any official results, the country's political parties, relying on data from party poll monitors around the country, said Nahda appeared to have won upwards of 40% of the popular vote. Some party officials reported Nahda looked likely to win an outright majority, with as much as 55% of the vote.

If official results, which may be released as early as Tuesday, support those results, it would be a substantially better showing for the Islamists than many predicted. The center-left Tekatil Party and a party led by a leading human-rights activist, the Congress Party for the Republic, looked set to come in second and third. The party most predicted to place second, the staunchly secular Progressive Democratic Party and Nahda's most outspoken critics, did far worse than expected.

The first free and fair elections to emerge from this year's string of Arab uprisings has been roundly praised by observers. Nine-term US congresswoman Jane Harman, who helped lead a team of observers from the Washington-based National Democratic Institute, said the vote was "hands down the best, the most promising election I have ever witnessed, including those I have seen in the United States."

Yingluck Shinawatra, Thailand's recently elected prime minister, said on a visit to the government's flood relief operations centre on Monday that she hoped the water level in the capital would not rise above one metre. But, with Ms Yingluck having consistently taken a more optimistic tone than the governor of Bangkok, who represents the opposition Democrat party, residents said they were preparing for the worst and have been stocking up on food and water. Some supermarkets have run out of supplies.

At least 350 people have been killed, several million forced out of their homes and big industrial estates and key infrastructure destroyed. Monsoon rains have pounded south-east Asia since July, wiping out large swaths of rice crops and raising the spectre of "serious food shortages", according to the UN's Food and Agriculture Organisation.

Despite initial attempts to divert the flood waters around Bangkok, which accounts for about 40 per cent of Thailand's economic output, the government is now attempting to drain the huge volume of water south into the sea through the city's canals and its main river, the Chao Phraya.

"Towards Reforming the International Financial and Monetary Systems in the Context of a Global Public Authority," was at times very specific, calling, for example, for taxation measures on financial transactions. "The economic and financial crisis which the world is going through calls everyone, individuals and peoples, to examine in depth the principles and the cultural and moral values at the basis of social coexistence," it said.

It condemned what it called "the idolatry of the market" as well as a "neo-liberal thinking" that it said looked exclusively at technical solutions to economic problems. "In fact, the crisis has revealed behaviours like selfishness, collective greed and hoarding of goods on a great scale," it said, adding that world economics needed an "ethic of solidarity" among rich and poor nations. "If no solutions are found to the various forms of injustice, the negative effects that will follow on the social, political and economic level will be destined to create a climate of growing hostility and even violence, and ultimately undermine the very foundations of democratic institutions, even the ones considered most solid," it said.

It called for the establishment of "a supranational authority" with worldwide scope and "universal jurisdiction" to guide economic policies and decisions. Asked at a news conference if the document could become a manifesto for the movement of the "indignant ones", who have criticised global economic policies, Cardinal Peter Turkson, head of the Vatican's Justice and Peace department, said: "The people on Wall Street need to sit down and go through a process of discernment and see whether their role managing the finances of the world is actually serving the interests of humanity and the common good. We are calling for all these bodies and organisations to sit down and do a little bit of re-thinking."

Sir John claimed it was likely that Europe was heading towards a ''federal state within the eurozone'' as leaders try to find a resolution for the current crisis. He told the BBC's Andrew Marr show: ''There won't necessarily have to be a treaty in this country for fiscal union. It is conceivable there would be a treaty just among members of the eurozone.'' He added: ''But at some stage there will be another treaty because if there is fiscal union in Europe it changes our relationship to Europe."

"The decision has already been made by the government that leaving the euro is a possibility. I think they have already got the printing machines going and are bringing out the old deutsche marks they have left over from when the euro was introduced." Malmgren, co-founder of Principalis Asset Management, acknowledged that leaving the euro would be a radical move that would cause Germany's export prices to jump, but said German industries are strong enough to handle price increases, Citywire reported. Other countries have left currency unions before, Malmgren said, citing the report, "Checking Out: Exits from Currency Unions."

Countries leaving currency unions are usually larger, wealthier, and more democratic and typically have higher inflation than their partners, according to the report, published by the Monetary Authority of Singapore. Malmgren predicts that more eurozone countries will default, causing deep changes in society, Citywire reported. "It is important to begin preparing the public to deal with this situation." Malmgren isn't the only one saying the euro is in trouble.

"The euro is nearing its ugly end," said Stefan Homburg, head of Germany's Institute for Public Finance, according to The Telegraph. "A collapse of monetary union now appears unavoidable."

The virus, first detected nearly two weeks ago by the military's Host-Based Security System, has not prevented pilots at Creech Air Force Base in Nevada from flying their missions overseas. Nor have there been any confirmed incidents of classified information being lost or sent to an outside source. But the virus has resisted multiple efforts to remove it from Creech's computers, network security specialists say. And the infection underscores the ongoing security risks in what has become the US military's most important weapons system.

"We keep wiping it off, and it keeps coming back," says a source familiar with the network infection, one of three that told Danger Room about the virus. "We think it's benign. But we just don't know."

Military network security specialists aren't sure whether the virus and its so-called "keylogger" payload were introduced intentionally or by accident; it may be a common piece of malware that just happened to make its way into these sensitive networks. The specialists don't know exactly how far the virus has spread. But they're sure that the infection has hit both classified and unclassified machines at Creech. That raises the possibility, at least, that secret data may have been captured by the keylogger, and then transmitted over the public internet to someone outside the military chain of command.

Despite their widespread use, the drone systems are known to have security flaws. Many Reapers and Predators don't encrypt the video they transmit to American troops on the ground. In the summer of 2009, US forces discovered "days and days and hours and hours" of the drone footage on the laptops of Iraqi insurgents. A $26 piece of software allowed the militants to capture the video.

Fitch cited the "intensification" of the eurozone debt crisis that "constitutes a significant financial and economic shock which has weakened Italy's sovereign risk profile". The agency also cut Spain's rating by two notches, to AA-. Fitch raised concerns about the strength of Italian banks, particularly in light of the current debt crisis.

It talked of the "small but no longer negligible risk that a further worsening of the eurozone debt crisis and volatility in the value of Italian government bonds will further erode confidence in the banking system". The agency said a "vicious cycle" could emerge where a growing lack of confidence in Italian banks could knock confidence in government debt, which could in turn undermine the banks further. With regards to Spain, Fitch also cited the deepening debt crisis, and raised questions about the country's ability to cut its debt levels quickly - and its growth prospects.

It was 10 years ago that the United States, together with its NATO allies, marched into Afghanistan to put an end to Taliban rule and begin the hunt for al-Qaida chief Osama bin Laden. A decade later, the terrorist leader is dead. But, says Harald Kujat, former general inspector of the German military, the mission has been a failure.

"The mission fulfilled the political aim of showing solidarity with the United States," Kujat told the German daily Mitteldeutsche Zeitung. "But if you measure progress against the goal of stabilizing a country and a region, then the mission has failed." Kujat said that it was ignored for too long that "the opponent was fighting a military battle and we needed to do the same." In reference to claims from German political leaders, among others, he said "the argument that it was a stabilization mission was maintained for too long." The result, he said, is that soldiers were not given what they needed in order to effectively fight the enemy.

Kujat is hardly the first to criticize the Afghanistan war. But his words carry weight in Germany. He was a leading planner of the German mission to Afghanistan and served as general inspector of the German military - the Bundeswehr's highest-ranking soldier - from 2000 to 2002. Part of his job included advising both the German government and the Defense Ministry on military matters.

With the turmoil threatening to spiral into financial meltdown as the value of banks' sovereign bond holdings slide, Merkel and Sarkozy are likely to discuss in Berlin both how to manage Greece, prevent contagion and strengthen lenders. The implosion of Belgian lender Dexia, the first victim of the crisis, has added a sense of urgency to the talks."Dexia will be among the topics that will be discussed but the main topic is Greece and the euro zone, as banks are only a consequence" of the crisis, a source at the French finance ministry told Reuters.

Sarkozy is due to arrive in Berlin late Sunday afternoon and hold a meeting with Merkel followed by a working dinner. Talks are continuing over a vital aid tranche for Greece, which could run out of cash as soon as mid-November. "There is a high risk that this crisis further escalates and broadens," German Finance Minister Wolfgang Schaeuble was cited as saying by a newspaper Sunday.

While that level remains the second highest decennial rate, analysts say the US may never return to its mid-decade housing boom peak in which nearly 70 percent of occupied households were owned by their residents. The reason: a longer-term economic reality of tighter credit, prolonged job losses and reduced government involvement.

Unemployed young adults are least likely to own, delaying first-time home purchases to live with Mom and Dad. Middle-aged adults 35-64, mostly homeowners who were hit with mortgage foreclosures or bankruptcy after the housing bust in 2006, are at their lowest levels of ownership in decades. Measured by race, the homeownership gap between whites and blacks is now at its widest since 1960, wiping out more than 40 years of gains.

"The changes now taking place are mind-boggling: the housing market has completely crashed and attitudes toward housing are shifting from owning to renting," said Patrick Newport, economist with IHS Global Insight. "While 10 years ago owning a home was the American Dream, I'm not sure a lot of people still think that way."

However, the firm emphasised that the downgrades did not "reflect a deterioration in the financial strength of the banking system". Moody's also downgraded nine Portuguese banks, blaming financial weakness. Shares in RBS and Lloyds fell sharply at the start of trading, but then recovered. By early morning RBS shares were down 0.25% while Lloyds was 1% lower.

In a statement, Moody's said: "Moody's Investors Service has today downgraded the senior debt and deposit ratings of 12 UK financial institutions and confirmed the ratings of one institution. "The downgrades have been caused by Moody's reassessment of the support environment in the UK which has resulted in the removal of systemic support for seven smaller institutions and the reduction of systemic support... for five larger, more systemically important financial institutions."

The downgrades include a two-notch cut for government-controlled RBS, and a one-notch cut for Lloyds TSB, a division of part-nationalised Lloyds Banking Group. Spanish bank Santander had its UK business downgraded by one notch, while Nationwide Building Society suffered a two-notch reduction. RBS said it was "disappointed" that Moody's announcement did not reflect the "significant progress" the bank had made to restructure it finances. Nationwide said that Moody's announcement was part of an industry-wide review, and "not a reflection of Nationwide's business model". The building society said in a statement: "Nationwide remains one of the strongest and best capitalised financial organisations in the UK".

Credit rating: The assessment given to debts and borrowers by a ratings agency according to their safety from an investment standpoint - based on their creditworthiness, or the ability of the company or government that is borrowing to repay. Ratings range from AAA, the safest, down to D, a company that has already defaulted. Ratings of BBB- or higher are considered "investment grade". Below that level, they are considered "speculative grade" or more colloquially as junk.

Explaining the move Sir Mervyn told Sky News: "This is the most serious financial crisis we've seen at least since the 1930s, if not ever." The Bank has already pumped 200 billion pounds into the economy. It has done this by buying assets such as government bonds, in an attempt to boost lending by commercial banks. Sir Mervyn said: "We're having to deal with very unusual circumstances and to act calmly and do the right thing. The right thing at present is to create some more money to inject into the economy."

The Bank's Monetary Policy Committee has been split for months over whether the UK needs a boost to the economy through QE, an increase in interest rates to stave off inflation - which at 4.5% is well over double its target - or to leave things as they are. Sir Mervyn said the economic landscape was unfamiliar and the world had changed in the past three months and so had the policy response necessary.

He said the amount of money in the economy was not growing quickly enough. Sir Mervyn also said he could not rule out a further bout of QE.

"Operation Enduring Freedom" aimed to track down Osama Bin Laden after 9/11 and eliminate the Taliban. The UN says more than 10,000 civilians have died in the past five years alone. More than 2,500 international troops have been killed - most of them American. The conflict has already surpassed Vietnam to become the longest war in US history.

Speaking at the Council on Foreign Relations, General McChrystal, who commanded coalition forces in 2009-10 before being forced to resign after a magazine interview, said the US and Nato allies were "a little better than" half way to achieving their military goals. The most difficult task would be to create a legitimate government that ordinary Afghans could believe in and that would balance the influence of the Taliban, he said.

The war is said to have cost the Americans $120 billion, and the British 18 billion pounds. "Just think how, if that money had been judiciously and wisely invested here, it might have transformed everything," said John Simpson, BBC World Affairs editor in Kabul.