In The News:

The EU is bracing for it's next financial crisis, which is just beginning:

Stock And Bond Markets Rocked By Fears Of Italian And Spanish Debt Spirals

Global stock and bond markets suffered a rout as traders fled the renewed spectre of a eurozone default and fresh evidence of a global recession.

Italy's leading MIB index plunged 5pc and Spain's Ibex fell 3pc amid fears that the eurozone's third and fourth biggest economies were in the grip of a deadly and uncontrollable spiral of debt and recession.

The yields reflected a level of fear on the bond markets not seen since the fraught period before Christmas when traders bet that the eurozone could collapse.

The Real Threat Is Spain, Not Greece

Greece who?

The greatest threat to the global economy has quickly shifted west to Spain. Spain’s stock market and big bank stocks continue to tumble. The benchmark IBEX 35 index is down 10 percent since Jan. 1 and nearly 30 percent over the past year.

Spain’s economy is the 14^th biggest in the world, nearly five times larger than Greece. Spain’s unemployment rate is a staggering 23 percent. That’s worse than the jobless rates in Mozambique, Micronesia or Equatorial Guinea and means there are nearly as many people without a job in Spain as there are working age people in Greece.

Put simply: Greece is papas pequenas (small potatoes) when compared to Spain. If Spain’s problems worsen and any of its big banks need a backstop or bailout, it is unclear where the money will come from. The bailout funds in Europe currently aren’t big enough to handle it and many I speak with aren’t optimistic the money could be easily raised.

Last week I wrote that $4 gasoline would not take down the macro American economy. It won’t, but given the interconnectedness of the global financial markets, one big, bad Spanish bank certainly could.

The Spanish stock market is now the first thing I check on CNBC.com every morning. I suggest you do too.

Spain's 'lose-lose' Struggle Reignites Euro Crisis

North Korea Threatens 'Merciless Punishment' As It Readies Rocket Launch

North Korea has threatened retaliation and “merciless punishment” against any country that shoots down the long-range rocket it is preparing to launch this coming week.

Japan and South Korea have put their armed forces on standby in response to North Korea’s plans, prepared to shoot down the missile if it passes over their territory.

North Korea was this weekend believed to be at the first stage of launching the rocket, expected between April 12 and 16, claiming that it is part of the centenary celebrations for the birth of the state’s founder Kim Il Sung.

However, the United States, Japan and South Korea believe that in reality it will be a ballistic missile test in violation of UN resolutions.

Russia Plans To Flatten Georgia If Israel Attacks Iran

Russia is building up forces in the Caucasus region, preparing to protect its interests in case Israel attacks Iran with the help of the United States, the western media said.

GenerationalDynamics.com and the Business Insider saidthe Russian military believes that when the US goes to war with Iran, it may deploy forces in friendly Georgia and warships in the Caspian Sea with the possible help of Azerbaijan.

Hence, Russia is deploying guided anti-ship missiles on the Caspian shore in preparation, and is forming an offensive spearhead force, heavily armed with modern long-range weapons, it added.

In the case of an Iranian war, it’s expected that the Russian spearhead will be ordered to strike south to prevent the presumed deployment of US bases in the region, to link up with the troops in Armenia, and take over the South Caucasus energy corridor along which Azeri, Turkmen and, other Caspian natural gas and oil may reach European markets, the website added.

By one swift military strike Russia may ensure control of all the Caucasus and the Caspian states, for the first time since the Soviet Union dissolved, it said.

Iceland Volcano: And You Thought The Last Eruption Was Bad

On the second anniversary of the ash cloud that grounded Europe’s flights, Iceland is facing further volcanic havoc, warns Andy Hooper .

This month marks the second anniversary of the eruption of Eyjafjallajökull that left millions stranded across Europe, and cost airlines an estimated €150 million a day for six days.

But alarmingly, there are signs of high activity beneath the much larger, neighbouring Katla caldera in Iceland – a possible sign of an impending eruption. This should prompt extensive high-level contingency planning across Europe, as Katla has the potential to be much more damaging than Eyjafjallajökull.

Since Iceland was settled in the ninth century, Katla has erupted on average every 60 years, but has not had a significant eruption since 1918. Ominously, eruptions of Eyjafjallajökull in 1821-23 and 1612 were followed within months by eruptions of Katla. Judged by the historical calendar, an eruption is overdue.