New York Times article.

As Greece's debt troubles batter the euro, Britain has done its utmost to stay above the fray.

Until now, that is. Suddenly, investors are asking if Britain may soon face its own sovereign debt crisis if the government fails to slash its growing budget deficits quickly enough to escape the contagious fears of financial markets.

Times article.

The world's most powerful investors have been advised to buy farmland, stock up on gold and prepare for a "dirty war" by Marc Faber, the notoriously bearish market pundit, who predicted the 1987 stock market crash.

The bleak warning of social and financial meltdown was delivered today in Tokyo at a gathering of 700 pension and sovereign wealth fund managers.

Gavin Hewitt on the BBC News site.

However, the believers out there are few. Giant hedge funds have placed their bets; the euro will drop further. In their view the euro's inherent weaknesses are not being addressed. Most senior European officials believe some kind of bail-out will be needed.

Reuters report.

Senior Chinese military officers have proposed that their country boost defense spending, adjust PLA deployments, and possibly sell some U.S. bonds to punish Washington for its latest round of arms sales to Taiwan.

[...]

China has the world's biggest pile of foreign currency reserves, much of it held in U.S. treasury debt. China held $798.9 billion in U.S. Treasuries at end-October.

But any attempt to use that stake against Washington would probably maul the value of China's own dollar-denominated assets.

Telegraph report.

Evidence is mounting that Chinese sales of US Treasury bonds over recent months are intended as a warning shot to Washington over escalating political disputes rather than being part of a routine portfolio shift as thought at first.

A front-page story in the state's China Information News said the record $34bn sale of US bonds in December was a "commendable" move. The article was republished by the National Bureau of Statistics, giving it a stronger imprimatur.

Telegraph report.

There is now more than a one-in-five chance of another asset price bubble implosion costing the world more than £1 trillion, and similar odds of a full-scale sovereign fiscal crisis, a key report warned.

Investors must steel themselves for the possibility of a second leg to the financial crisis, and should be equally prepared for a fiscal crisis, in which a major economy faces either default or a "sudden stop" in financing themselves on capital markets, according to the World Economic Forum.

Anatole Kaletsky in the Times.

If nothing is done to change the US healthcare system, it can be stated with mathematical certainty that the US Government and many leading US companies will be driven into bankruptcy, a fate that befell General Motors and Chrysler largely because of their inability to meet retired workers' contractually guaranteed medical costs.

Telegraph report.

Theodoros Pangalos, deputy prime minister, said Germany had no right to reproach Greece for anything after it devastated the country under the Nazi occupation, which left 300,000 dead. "They took away the gold that was in the Bank of Greece, and they never gave it back. They shouldn't complain so much about stealing and not being very specific about economic dealings," he told the BBC.

Twisting the knife further, he said the current crop of EU leaders were of "very poor quality" and had botched this month's crisis summit in Brussels. "The people who are managing the fortunes of Europe were not up to the task," he said.

One banker said the situation was surreal. "How can they call the Germans incompetent Nazis and still expect a bail-out?"

Guardian report.

Police fired teargas in clashes with demonstrators in central Athens today after more than 30,000 people took to the streets to protest against austerity measures aimed at reducing Greece public debt.

Sean O'Grady in the Independent.

Is Britain about to suffer a "Black Swan" event? This, if you follow trendy financial ideas, is the one that shocks observers who assumed such a thing could never happen, just as the first Western visitors to Australia to see a black swan were similarly startled. The idea was popularised by a former financial trader, Nassim Taleb, whose The Black Swan became a bestseller soon after its publication in 2007, at a time when the unthinkable was happening to the big banks and markets every day, and black swans were biting us with painful frequency.

Juan Cole (Informed Comment) comments.

It appears that, the International Atomic Energy Agency is at least allowing for the possibility that documents allegedly found on a laptop some years ago --but discounted by the US Central Intelligence Agency and the Defense Intelligence Agency as of dubious provenance and incompatible with other intelligence gathered in Iran -- point to a nuclear weapons program that no one has been able to locate. Some close observers have concluded that the laptop documents are forgeries. A new IAEA report that declines to dismiss the alleged documents will certainly cause the war lobby in the United States to redouble its efforts to get up an attack on Iran.

[...]

But Russia's General of the Army Nikolay Makarov, Chief of the General Staff of the Armed Forces of the Russian Federation, warned that an American attack on Iran now, when the US is bogged down in two wars, might well lead to the collapse of the United States. He said that such an attack would roil the region and have negative consequences for Russia (a neighbor of Iran via the Caspian Sea). And, he said, the Russian military is taking steps to forestall such an American strike on Iran.

Independent report.

Britain's public finances are in a worse position than those of Greece, according to the latest figures on government borrowing. The Office for National Statistics said yesterday that January alone saw a net shortfall of £4.3bn, far worse than City forecasts and in a month which has always previously shown a healthy surplus. It puts the UK on track for a deficit of £180bn this year, or 12.8 per cent of GDP, economists said, shading the Greek figure, hitherto the worst in the European Union, of 12.7 per cent. In the pre-Budget report the Chancellor forecast a deficit of £178bn for the current year. Warnings that the UK could face a Greek-style crisis of confidence have been building for some weeks, and yesterday saw a sell-off of sterling and British government securities, or gilts, on the disappointing news.

Reuters report.

Greek opposition lawmakers said on Thursday that Germans should pay reparations for their World War Two occupation of Greece before criticising the country over its yawning fiscal deficits.

Telegraph report.

Bank of America and Barclays Capital, two leading oil traders, have told clients to brace for crude above $100 (£64) a barrel by next year, before it pushes relentlessly higher over the decade. This is a stark contrast from recessions in the 1980s and 1990s, when it took years to work off excess drilling capacity built in the boom.

[...]

"The groundwork for the next sustained step up in oil prices is now almost complete. Global spare capacity is likely to be reduced to low levels within a relatively short time. The global economic crisis has postponed, but not cancelled, a crunch which would otherwise be starting to bite now," said Barclays.

Financial Times article by Otmar Issing.

Once Greece was helped, the dam would be broken. A bail-out for the country that broke the rules would make it impossible to deny aid to others.

Speculation by Gregory White in Business Insider.

The Greek Prime Minister is set to visit Russia next week in the middle of the biggest crisis in the country's recent history. He will sit down to economic talks with his Russian counterpart Vladamir Putin and it has to be suspected that the debt crisis may be up for discussion.

They'll also be discussing military and energy policy. Could the Greek PM be trying to strike a bargain with Putin to save his troubled country?

If so, this seems like a monster blow to the EU, and posibly to NATO.