The eurozone debt crisis is spreading across Europe. The latest Irish bailout is not quelling the fear factor. Now, all eyes are turned to Spain, Portugal and Italy.

What has happened is that banking systems are freezing up, the Financial Times explains. One Spanish banker told the paper, "The bond and credit markets are completely closed."

So you thought the sovereign debt crisis in Europe was over? Wrong. For the past two months we've had a temporary respite. The euro rose and we got a nice warm and fuzzy feeling. But now the problem is back.

According to Bloomberg Markets Magazine's October issue, even though Europe did stress tests on their banks, there is still concern that one or more countries could default. Banks hold sovereign debt bonds from many different countries. That is putting pressure on all eurozone banks.

A default by Greece could trigger the collapse of banks with large holdings of Greek debt. Europe's largest banks hold €134 billion in Greek, Portuguese and Spanish government bonds.

Speaking to state legislators, Federal Reserve Chairman Ben Bernanke detailed specific areas in the economy that are still weak and holding back full recovery.

Among them are:

• Topping the list is high unemployment and a weak housing market. Speaking to this point Bernanke said: "We have a considerable way to go to achieve full recovery in our economy, and many Americans are still grappling with unemployment, foreclosure and lost savings."

After a brief sell off, buyers are returning to the gold market. Spot gold in London is trading at $1,212.85 per ounce. On the COMEX, June gold futures are at $1,210.50 per ounce, up $12.50.

The demand for gold continues. Investors are worried about the euro and eurozone sovereign debt. They wonder where all the money will come from to refinance upcoming bond maturities. Banks in Europe were gun shy about lending to one another. Chairman Bernanke of the U.S. Federal Reserve opened credit lines with Europe to ease the tightness. However, in a recent statement he said that the credit lines would not remain open forever. Those words added fuel to the euro fears.

Financial guru, Nouriel Roubini foresees rising sovereign debt leading to defaults.

Roubini predicted the U.S. financial collapse at least a year before it happened. Now he is predicting sovereign defaults for European Union (EU) nations.

We've read a good deal about the Greek financial crisis. Prime Minister, Papandreou, has imposed tax increases and spending cuts aimed at cutting the Greek deficit. Greece is most indebted nation in the EU.

Last week the Greek government floated a 10 year bond offering with rates rising to 6.3%, twice as much as the German government pays to borrow money.

Greece's ongoing debt crisis is coming to a head this week. Germany's biggest banks are proposing that they buy Greek bond debt with a guarantee from Berlin.

In the past, German banks have refused to participate in the plan. They already hold billion of euros of Greek debt. Hypo Real Estate, Eurohypo and Deutsche Postbank are among those unwilling to join. However, if Berlin sweetens the deal with guarantees, they may decide to participate. One bank official told the Financial Times last week: "This could be one of the outcomes, but it would not be a purely private solution -- there has to be government involvement if it were something on the eurozone level. I don't think my bank would say: We would not take part."

The Dow Jones Industrial Average sank below 10,000 Monday, closing at 9,908.39. So what? In market analysis, round numbers like 10,000 often trigger a change in market sentiment.

For example, when the Dow first pushed through 10,000 on the upside in 1999, investors and traders took this as a sign of strength. Conversely, when it crashed through 10,000 on its way down to 6,400, panic gripped Wall Street. Then, in 2009, we had a bounce back through 10,000 on the upside in November. Again, investors and traders saw this as a sign of strength.

It started with Dubai. Then it spread to Greece, Now its moving to Spain and Portugal. What is it? It's fear that some European countries will default on their sovereign debt.

The Europe Markit Sovx index, which measures the cost of insuring against default, jumped 100 basis points for the first time, along with heavy buying of credit default swaps (CDS). CDS spreads on Portugal hit record highs, up 17 basis points to 212. Greek swaps rose 7 basis points to 398.

Fitch's rating service has cut Russia's local and foreign currency rating to BBB --two ratings above junk. The ruble held steady in trading but is trading near the lower level set by the central bank.

Russia is facing the worst economic crisis in a decade. Thousands of people are being laid off and there is fear of social unrest. Fitch said it was concerned by Russia's weakening sovereign balance which plunged to $210 billion from $386.5 billion just 6 months ago.

First deputy minister Shuvalov said that the country is facing drastic budget cuts but he emphasized the need to support the banks. Shuvalov also said that the state would suspend the release of $50 billion to help firms repay foreign debts.

The government will still support the military complex, the gas monopoly, railway monopoly and power firms.

What is your comment on Russia's BBB rating?