Greek politicians have played down the prospect of abandoning the euro, which could lead to the break-up of the single currency.

Speaking from Athens yesterday, Doug McWilliams, chief executive of the CEBR, said: "Leaving the euro would mean the new currency will fall by a minimum of 15%. But as the national debt is valued in euros, this would raise the debt from its current level of 120% of GDP to 140% overnight."

"So part of the package of leaving the euro must be to convert the debt into the new domestic currency unilaterally." Greece's departure from the euro would prove disastrous for German and French banks, to which it owes billions of euros. McWilliams called the move "virtually inevitable" and said other members may follow.

"The only question is the timing," he said. "The other issue is the extent of contagion. Spain would probably be forced to follow suit, and probably Portugal and Italy, though the Italian debt position is less serious. Could this be the last weekend of the single currency? Quite possibly, yes."

As desperation grows and ecological misery spreads, the operative word on the ground now is, incredibly, August - the earliest moment that a real resolution could be at hand. And even then, there's no guarantee of success. For the United States and the people of its beleaguered Gulf Coast, a dispiriting summer of oil and anger lies dead ahead. Oh ... and the Atlantic hurricane season begins Tuesday.

The latest attempt - using a remote robotic arm to stuff golf balls and assorted debris into the gash in the seafloor - didn't work. On Sunday, as churches echoed with prayers for a solution, BP PLC said it would focus on containment rather than plugging the undersea puncture wound, effectively redirecting the mess it made rather than stopping it.

Perhaps most alarming of all, 40 days and 40 nights after the Deepwater Horizon blew up and began the underwater deluge, hurricane season is at hand. It brings the horrifying possibility of wind-whipped, oil-soaked waves and water spinning ashore and coating areas much further inland. Imagine Katrina plus oil spill.

Fear is afoot everywhere, and polarization prevails. Faith in institutions - corporations, government, the media - is down. Americans are angry, and they long ago grew accustomed to expecting the resolution of problems in very short order, even if reality rarely works that way. So when something undefined and uncontrollable happens, they speculate in all the modern forums about collusion and nefarious dealings. In the process, this tale of environmental disaster and economic damage cripples the sea-to-shining-sea narrative that usually offers Americans comfort during uncertain times.

This is, people are starting to say, a generational event - tragic to this generation, potentially crippling to the next. "The oil spill is part of prophecy," said Turner, the Louisiana minister. "The Bible prophesized hardships. If we believe the word of God is true - and we do - we also know that in addition to prophecying hardships he promised to take care of us."

They stressed that a US reprisal would be contemplated only under extreme circumstances, such as a catastrophic attack that leaves President Obama convinced that the ongoing campaign of CIA drone strikes is insufficient. "Planning has been reinvigorated in the wake of Times Square," one of the officials said.

At the same time, the administration is trying to deepen ties to Pakistan's intelligence officials in a bid to head off any attack by militant groups. The United States and Pakistan have recently established a joint military intelligence center on the outskirts of the northwestern city of Peshawar, and are in negotiations to set up another one near Quetta, the Pakistani city where the Afghan Taliban is based, according to the US military officials. They and other officials spoke on the condition of anonymity because of the sensitivity surrounding US military and intelligence activities in Pakistan.

The "fusion centers" are meant to bolster Pakistani military operations by providing direct access to US intelligence, including real-time video surveillance from drones controlled by the US Special Operations Command, the officials said. But in an acknowledgment of the continuing mistrust between the two governments, the officials added that both sides also see the centers as a way to keep a closer eye on one another, as well as to monitor military operations and intelligence activities in insurgent areas.

Obama said during his campaign for the presidency that he would be willing to order strikes in Pakistan, and Secretary of State Hillary Rodham Clinton said in a television interview after the Times Square attempt that "if, heaven forbid, an attack like this that we can trace back to Pakistan were to have been successful, there would be very severe consequences."

North Korea warned the UN to be wary of evidence that it said falsely accuses the country of torpedoing the warship, likening the case to the claims of weapons of mass destruction that the US used to justify its war against Iraq in 2003. The Security Council risks being "misused" by the US, the country's foreign ministry said last night in a statement carried by KCNA. "The US is seriously mistaken if it thinks it can occupy the Korean Peninsula just as it did Iraq with sheer lies," the statement said.

North Korean Major General Pak Rim Su said in Pyongyang yesterday that the international investigation into the March 26 sinking was biased because it was supervised by the South Korean military and included the US, KCNA said. Pak said the North does not have the type of submarines that the South said carried out the attack, Agence France-Presse reported, citing North Korea's Chungang TV.

South Korea's Yonhap News quoted South Korean officials as saying the North has about 10 of the Yeono class submarines, AFP said. Senior Colonel Ri Son Gwon also derided claims that writing on the torpedo was put there by North Korea, AFP reported. "When we put serial numbers on weapons, we engrave them with machines," Ri said, according to AFP.

According to the documents - which Estulin obtained from his sources inside the secretive group - issues to be discussed in this year's formal deliberations are:

1. Will the Euro Survive?

2. Development in Europe: Europe's Exit Strategy... On Hold?

3. Do We Have Institutions to Deal With the World Economy?

4. Greece: Lessons and Forward-looking Strategies

5. NATO and Afghanistan: The Practical Agenda for the Alliance

6. Iran and Russia: Economic and Financial Threats to the Alliance

7. The Consequences of War Against Terrorism

8. The Influence of Domestic Issues on American Foreign Policy

9.The Outlook for Japan's Economy

10. The Future of the US Dollar: Alternative Scenarios

That the Bilderbergers - essentially a talking shop for European and North American power players - are interested in discussing the current meltdown of the European economy should come as no surprise, especially as the group's attendee list includes many of the key financiers and string pullers who helped steer Europe into the crisis in the first place. Past attendees of the meeting include current EU President Herman Van Rompuy who got the job as the first non-elected head of the undemocratic European Union after a special wine and dine session with Bilderberg steering committee members.

Last year he heralded the beginning of global government, praising the increased role of G20 in dealing with the global financial crisis. Other key Bilderbergers include Jean-Claude Trichet, who, as head of the European Central Bank, was instrumental in helping to craft the current European bailout which itself is designed to incentivize the bankruptcy of Europe. Trichet, too, also recently called for global government to regulate the world economic meltdown that his fellow Bilderbergers helped to create.

Those familiar with the Bilderberg group's long-cherished dream of achieving global government through the creation of an international financial framework will be unsurprised to see that a debate on the question "Do We Have Institutions to Deal With the World Economy?" is the third order of business at this year's meeting. Nor will it be a surprise when the question is inevitably answered with the standard globalist line that international institutions like the IMF and the World Bank need to be "strengthened" and even given enhanced regulatory powers as a result of the crisis they have brought about, exactly as Bilderberg observers have been predicting for years.

Indeed, as Estulin himself notes in his latest book, Shadow Masters, former US Undersecretary of State George Ball expressed the ambition of the globalists in an address to the 1968 Bilderberg meeting in Mont Tremblant when he stated that they were interested in developing a "world company" to take over the "archaic political structure of nation states"

First, the credit ratings of large Wall Street banks like Goldman Sachs (GS), Morgan Stanley (MS), JP Morgan Chase (JPM) and Citigroup (C) are all under siege due to aspects of the financial reform bill, which was passed by the Senate last week.

Second, that bill will restrict their lucrative derivatives and trading businesses, which is sure to put a crimp on their earnings. Finally, the vast amounts of government-backed cheap capital that these banks raised in the financial markets in 2009, will all have to be refinanced in 2012 at interest rates that could be as much as five times higher than those they got last year.

Uncle Sam Won't Catch Them If They Fall. Ratings today for the largest US banks are propped up by the assumption that the government will support them: The financial regulatory reform bill will probably remove that assumption.

"The Dodd bill contains provisions that, if passed into law, could weaken our assumptions regarding the probability that the US government would support the largest, most systemically important financial institutions," says Robert Young, managing director for Moody's North American Bank Ratings.

The Dow tumbled 122.36 points, or 1.2 percent, to 10,136.63 at 4pm in New York and lost 7.9 percent this month. The Standard & Poor's 500 Index sank 1.2 percent to 1,089.41, led by financial shares on the Spanish downgrade and energy companies after US President Barack Obama extended a moratorium on new deep-water drilling. Oil erased gains after rallying as much as 1.6 percent to more than $75 a barrel. Ten-year Treasury yields decreased 7 basis points to 3.3 percent. The euro slipped 0.7 percent to $1.2273.

Equities and commodities extended losses after Fitch Ratings stripped Spain of the AAA rating it's held since 2003, saying the nation's economic growth will slow as it attempts to cut its debts. Earlier losses followed disappointing US economic data and a North Korean general's warning of "all-out war" if any accidental clashes with South Korea break out.

"Spain's downgrade just adds to more uncertainty," said Quincy Krosby, chief market strategist for Newark, New Jersey- based Prudential Financial Inc, which oversees about $667 billion. "There are too many geopolitical events. We have a three-day weekend in the US, and traders will definitely want to lighten their books."

Standard & Poor's, another ratings agency, downgraded Spain's rating for the second time to AA last month but Moody's, the other leading agency, has maintained the rating at AAA. Any downgrade in a sovereign credit rating will push up the interest that a country must pay on its debts. Brian Coulton, Fitch's head of EMEA sovereign ratings, said that the process of cutting the country's debt could slow economic growth.

Analysts said that the full effect of Fitch's announcement, which came after the European markets shut last night, would not be felt until Monday. John Praveen, the chief investment strategist at Prudential International Investment Advisers, said: "The markets are reacting negatively. If Moody's also downgrades Spanish debt then we will probably have a very negative reaction because Spain is considered much bigger than Greece."

The unanimously agreed document also said that Israel should sign the NPT. US President Barack Obama backed the deal but said he was "strongly opposed" to Israel being singled out. The US says the reference could jeopardise efforts to persuade the Israelis to attend the 2012 talks. An Israel official later denounced the document as "hypocrisy".

"Only Israel is mentioned, while the text is silent about other countries like India, Pakistan and North Korea, which have nuclear arms, or even more seriously, Iran, which is seeking to obtain them," a senior government official told AFP news agency on condition of anonymity. Correspondents say Arab nations want to put pressure on Israel to relinquish its undeclared nuclear arsenal.

In Guatemala, at least 1,700 people have fled the eruption, some 30km (19 miles) south of the capital city. President Alvaro Colom has declared a state of emergency in Escuintla region, Guatemala City and areas surrounding the capital.

The volcano has covered parts of Guatemala City in ash - up to 7cm thick in some areas - forcing the closure of the country's main international airport. Seismologists have warned of more eruptions from the Pacaya volcano "in the coming days". Several thousand people have evacuated their homes in the area, 95 miles (150km) south-east of the capital Quito.

A powerful tropical storm has struck Guatemala, bringing torrential rains that have added to the disruption caused by an erupting volcano. At least 12 people have died in mudslides and floods caused by tropical storm Agatha, which is moving in from the Pacific Ocean. Officials are warning that flooding could be worse than usual because ash from the volcano has blocked drainage systems.

They fear the rains will turn the black volcanic ash into cement-like mud.

Unlike previous Jewish ascensions to the Mount in the recent past, and in contrast to this group's last ascension on Passover, in which their entry to the Mount was blocked, police on the Mount were courteous and friendly. The group was allowed in promptly upon arrival and without delays. They were gripped by excitement when one of the rabbis prostrated himself facing the presumed location of the Temple's Holy of Holies in ancient times. Police allowed this religious act as well.

Jews are usually forbidden from openly praying or even mumbling prayers on the Mount, as part of an Israeli policy of complying with Muslim Wakf's demands in this matter. It is not completely clear whether the friendly police attitude Tuesday was a fluke or a sign of changing attitudes.

Temple Mount activist Yosef Rabin told Arutz Sheva that the event is a significant one. "There has been a long running effort to bring hareidim to the Mount for a long time and now it is starting to take root," he said.

The worst oil spill in US history began when a drilling rig exploded and sank last month, killing 11 people. The thick crude has already permeated more than 70 miles (110km) of Louisiana's coastline, threatening fragile wetlands and putting the vital fishing industry at risk. Mr Suttles said BP had determined that the "top kill" method - which had been going on since Wednesday - had failed after studying the results for three days.

"We have not been able to stop the flow," he told reporters on Saturday. "This scares everybody, the fact that we can't make this well stop flowing, the fact that we haven't suceeded so far," he said. The company says it pumped 30,000 barrels of mud into the well, in three attempts, at rates of up to 80 barrels a minute, but it had not worked.

Our correspondent says that people in Louisiana are growing increasingly impatient and angry. Some fishermen have nailed up signs, with one reading "BP, you ruined our futures and our heritage", our correspondent adds. "Everybody's starting to realise this summer's lost. And our whole lifestyle might be lost," Michael Ballay, the manager of Cypress Cove Marina, told Associated Press.

South Korea says its ship, the Cheonan, was attacked by a torpedo from the North in March. Pyongyang denies the claim. The comments ended three-day talks on Jeju resort island in South Korea. Tensions have been rising in the region since the Cheonan sank on 26 March, with the loss of 46 sailors.

Chinese Premier Wen Jiabao said avoiding conflict between the Koreas was "most urgent", but did not apportion blame for the sinking of the Cheonan. "The urgent task for the moment is to properly handle the serious impact caused by the Cheonan incident, gradually defuse tensions over it, and avoid possible conflicts," Mr Wen said.

"China will continue to work with every country through aggressive negotiations and co-operation to fulfill our mission of maintaining peace and stability in the region," he added.

By comparison, the stated amount spent by Pittsburgh on security for last September's G-20 summit was US$12.4 million. London's stated amount for the G-20 last year was US$10.9 million. Public Safety Minister Vic Toews said in Parliament on Thursday the cost is expensive but "the security is worth it."

Toews argues that hosting separate summits back-to-back is unprecedented. Canada is hosting the G-20 - the group of leading rich and developing nations - economic summit on June 26-27 in Toronto. The G-8 - the group of leading industrial nations - is meeting in Huntsville, Ontario, the day before the G-20 summit. Opposition parties call it a billion-dollar boondoggle.

Pyongyang's threat to abandon the agreements - designed to prevent accidental armed clashes and protect the safety of South Korean workers in a Northern factory enclave - came as Seoul elevated its alert level and began anti-submarine exercises off the west coast of the peninsula.

The threats mark the most serious deterioration in relations between the neighbours, who are still officially at war, in more than a decade and have rattled international markets. They stabilised on Thursday and financial regulators in Seoul said overseas investors had overreacted to the sinking of the Cheonan, a South Korean warship, in March. The Korean won rose to 1,224 per dollar for the first time in six sessions and the benchmark Kospi index closed up 1.6 per cent.

A joint international team last week found that North Korea was responsible for the sinking of the Cheonan. Tensions have mounted in recent days as the two Koreas threatened to sever ties and the North threatened conflict in response to any international sanctions.