India, meet B. Ramalinga Raju, your own personal Bernard Madoff. The founder and chairman of Satyam Computer Services Ltd., one of India’s largest outsourcing IT firms, Raju has admitted to a staggering fraud that includes inflating the amount of cash on his company’s balance sheet by nearly $1 billion, overstating its profits for years and understating its liabilities. Raju admitted to the shocking scandal in a startlingly honest letter to his board and the Securities & Exchange Board of India. The scheme, he wrote, reached "simply unmanageable proportions," leaving him in a position "like riding a tiger, not knowing how to get off without being eaten." The sham, which sent Bombay’s stock exchanges down 7.3 percent, is already being called India’s Enron.

Fighting in Gaza intensified today after a temporary truce made way for humanitarian relief early in the afternoon. Word also came from French President Nicolas Sarkozy that Israel and the Palestinian Authority agreed to an Egyptian-French plan for Gaza. But Hamas has so far refused, saying it does not guarantee open borders and an end to the violence. The U.S. has also thrown its support behind the cease-fire brokered by France and Egypt, which calls for limited cease-fire periods so humanitarian goods can be delivered to Gaza and allows Egypt time to continue working toward a permanent cease-fire. Israel has vowed to continue its assault on Gaza until it is satisfied that Hamas will be unable to rearm itself. Israeli officials on en route to Cairo to take part in further peace negotiations.

After a cheery beginning to the New Year, stocks took a tumble today on the heels of bad news from metals giant Alcoa and technology bellwether Intel. The Dow fell 245 points to 8769, losing its year opening gains and falling the most in a day in over a month. The S&P 500 fell 28 points to 9.06 and the Nasdaq was down 53 points to 1599. Today's news that the private-sector shed 693,000 jobs in December forced investors to face reality after the New Year's rally, said one analyst. Look for things to remain ugly going forward as a new economic data is released in the coming weeks.

After months of waffling, Chris Matthews brought the speculation over whether he’d run for the Senate in 2010 to an end today when he told staffers of Hardball today that his name is officially out of the hat. Matthews has been flirting with running for Arlen Specter’s seat in Pennsylvania for much of the past year. He held meetings with political operatives, looked into moving to the state and had extensive discussions with family and friends. Some speculated that the fair-haired talking head was flirting with the run in order to gain leverage in contract negotiations with MSNBC. He’s currently working on a new deal with the network that is likely to dwarf the $5 million a year he is currently making.

A day after denying Roland Burris the opportunity to enter the 111th Congress, Democrats in the Senate appear ready to change their tune on Wednesday. The Associated Press reports they now plan to seat the former Illinois state legislator as President-elect Barack Obama's replacement. The news came after Burris met with Senate Majority Leader Harry Reid and Majority Whip Dick Durbin, though Democratic aides deny a decision was made. "There's a growing sense that there is a prety flimsy basis to deny what is clearly a legal appointment," Sen. Russ Feingold said. Controversy surrounded Burris' appointment because it was made by disgraced Illinois Governor Rod Blagojevich, who is accused of trying to sell Obama the Senate seat.

Bernie Madoff's firm was investigated eight times over 16 years by the SEC and even though red flags were discovered and despite being interviewed twice, Madoff somehow evaded the feds. SEC emails show officials believed the hedge fun was "highly unusual" in its practices and other regulators determined that a section of the company lacked any clients. In November 2005, a rival of Madoff said his firm was "the world's largest Ponzi scheme." The SEC increased their scrutiny but found no evidence of fraud. The SEC will be forced to defend its actions and inactions on Monday, when Congress convenes a hearing on the fraud.

The Army issued a formal apology to the families of soldiers killed in combat yesterday after it sent letters addressed “Dear John Doe” to of their 7,000 relatives. "There are no words to adequately apologize for this mistake or for the hurt it may have caused," Brig. Gen. Reuben D. Jones wrote yesterday in a statement. Army Chief of Staff Gen. George W. Casey Jr. is also sending a personal apology letter to the families. The letter was sent to provide information about private companies that offer assistance to families of the fallen. The salutation prompted a strong reaction from some military families. "The indication that anyone would perceive that a hero is not significant, that they would not direct this personally to them, is shattering," said Merrilee Carlson, whose son died in Iraq in 2005.

In yet another celebrity illness scoop, sources are telling the National Enquirer that Michael Jackson has only a few months left to live. An addiction to painkillers and alcohol is to blame, it says, and one source close to the star adds, "It's tragic. His condition is just so far gone, I'd be surprised if he lasts six months.” According to Ian Halperin, author of a new biography of the star, Jackson has been diagnosed with a rare genetic condition, alpha-1 antitrypsin deficiency, which causes lung and liver disease. "His muscles and lungs are deteriorating, and he's bedridden much of the time. He can walk, but not for very long,” says a family friend. Meanwhile, Jackson’s spokesman denies the reports: "Mr. Jackson is in fine health.” Normally it would be easy to dismiss pretty much any claim made by the Enquirer, but given its recent scoops on Paul Newman’s affliction with lung cancer and Patrick Swayze’s bout with pancreatic cancer, the Enquirer just might be transforming into a reputable—or at the least, semi-accurate—rag.

In a juicy profile in the new issue of Conde Nast Portfolio, Lloyd Grove casts aging media mogul Sumner Redstone as a latter-day King Lear. With Viacom and CBS way down, the 85-year-old may be forced to start selling off parts of his empire. But he’s still full of bluster, bad-mouthing his rivals—“Disney is getting killed!”—in between knocking back vodka cranberries. Redstone even gripes about CBS chief Les Moonves overpaying for CNET, though Redstone himself signed off on the purchase price. Two weeks after Redstone’s public split with his 47-yeear-old second wife, Paula, after five years of marriage, Grove finds the couple still sharing an abode.

Country First: It was the theme John McCain adopted for his 2008 presidential campaign and now it's the name of his new political action committee. The PAC will aim to raise money for like minded politicians and finance McCain's travels around the country. In an email to supporters, the maverick-y Arizona Senator described the group as a “grassroots organization” meant to “strengthen our Party, better define our Republican ideals and message” and recruit and support “a new generation of Republican leaders.” Known as a leadership political action committee, this type of PAC is opposed by advocates for strict campaign rules because they provide a way around contribution limits, allowing politicians to hand out money to candidates in exchange for future favors.

Atlantic writer Michael Hirschorn has an article this month about the imminent death of the New York Times paper edition that not all of the intelligentsia agrees with. Felix Salmon of Portfolio thinks that Hirschorn is dead wrong. The Times, he writes, is currently only losing a small amount of money and the company has a lot of assets to sell off in the case that it needs to. Plus, the Times is essentially a national newspaper and its presence will only grow as small papers around the country continue to fold. “I think it’s pretty safe to say that the NYT is going to continue to exist in its present form for quite a long time yet,” Salmon writes. James Surowiecki over at the The New Yorker agrees with Salmon but he's feeling a little more sentimental about it all. "I am one of those dinosaurs who finds the idea of a morning without the print edition of the Times pretty much unimaginable," he writes.

Joe the Plumber—famous for being a campaign '08 ploy—plans to go to Israel to cover the conflict in Gaza for conservative Web site pjtv.com. Samuel Wurzelbacher will spend ten days there to report on the "Average Joes" in Israel, he told a Toledo TV station. During the campaign, Wurzelbacher was called out by Fox News anchor Shepard Smith for claiming a vote for Obama would mean the end of Israel.

With all eyes on Leon Panetta’s appointment to head the CIA, there’s another nomination certain to make waves: Obama has tapped CNN and CBS medical correspondent Dr. Sanjay Gupta be the next surgeon general. The president has reportedly offered the job to the neurosurgeon, who is definitely interested. Vetting is in its final stages and a formal announcement could come over the next few days.

President-elect Obama, President Bush and the three living ex-presidents, Carter, Clinton and George H.W. Bush, lunched at the White House today in an unprecedented photo-op. The meeting of the minds was Obama's suggestion, which Bush thought was a "fantastic idea," his press secretary said. Bush and Obama are expected to meet privately for thirty minutes as well.

How goes Patrick Swayze's battle with pancreatic cancer? "You can bet that I'm going through hell," Swayze tells Barbara Walters in an interview that airs on ABC tonight. "I'm at the beginning of my battle. And I expect it to be a long, hard battle, one that I'm going to win. I keep my heart and my soul and my spirit open to miracles. I pray." Swayze was diagnosed with stage four pancreatic cancer last January and acknowledges that his time may be running out. "I'd say five years is pretty wishful thinking," he said. "Two years seems likely if you're going to believe the statistics. I want to last until they find a cure, which means I better get a fire under it." During his cancer battle, Swayze has been filming a new series for A&E called The Beast, which stars him as an FBI agent fighting internal demons.

The recession is hitting every corner of the American economy--including porn. With X-rated DVD sales down 22% from a year ago, porn moguls Larry Flynt (of Hustler fame) and Joe Francis (of Girls Gone Wild) are heading to D.C. seeking a bailout. "With all this economic misery and people losing all that money, sex is the farthest thing from their mind," Flynt said. "It's time for Congress to rejuvenate the sexual appetite of America." Francis hopes for a Detroit-sized rescue. “We feel we deserve the same consideration,” he said.

With demand for crude oil, gas and fuel falling in line with the recession, a government report showing an increase in supplies led oil futures to drop 12 percent--the largest decline in more than seven years. "We have the making of a huge glut here," said one trader in Chicago. The price of a barrel of crude closed Wednesday at $42 and futures trading are down 55 percent from a year ago. Domestic fuel consumption, meanwhile, is down 2.9 percent from a year earlier.

Count Austrian investor Sonja Kohn near the top of the list for Madoff victims who have it worst. After her Bank Medici lost $2.1 billion thanks to Madoff, Kohn has now disappeared and those close to her believe it is because the Russian oligarchs whose money she lost are seeking retribution. "With Russian oligarchs as clients," said another Viennese banker, "she might have reason to be afraid." Kohn lived in New York in the 1980s, when she befriended Madoff. After returning to Vienna, she was known as "Austria's Woman on Wall Street," attracting investments from Russians, Ukrainians, and Israelis. Since Kohn's losses were exposed, Bank Medici has been taken over by Austrian regulators.

According to The Wall Street Journal, Barack Obama is planning to push states "to permanently change their unemployment-insurance laws to cover part-time workers and prevent other laid-off workers from falling through the cracks in coverage." Even before such changes, however, New York State's computerized system crashed after the holidays as, reports The New York Times, it "could not handle the volume of calls and online inquiries it was receiving"—as many as 10,000 an hour. In order to entice states like New York, Obama will offer $7 billion as an incentive. However, the proposal, along with similar ones, is raising concerns over the ballooning deficit: a Congressional Budget Office report later today is expected to put the federal deficit at near $1 trillion, more than double the $438 billion that was projected in September.

New York Attorney General Andrew Cuomo has denied wanting Hillary Clinton's Senate seat, but behind the scenes, a different story is unfolding. According to The New York Times, Cuomo's aide Joseph Percoco has been urging labor leaders and upstate officials to oppose Caroline Kennedy. According to one prominent upstate Democrat who Percoco spoke with, Kennedy's name was never specifically mentioned: "[Percoco] said, 'Don't you think it should be someone who understands upstate? Don't you think it should be someone with experience? Shouldn't it be somebody who knows New York better?' " Cuomo's office denied any effort to undermine Kennedy.

Forget the banking and media sectors--the real pain of the current economic meltdown is being felt most by the trucking industry, the Los Angeles Times reports. In just the third quarter alone, a whopping 785 trucking companies with a combined fleet of 39,000 trucks went out of business. And with economic activity drying up across the country, competition among trucking companies for remaining cargo has sent shipping prices off a cliff, making it hard for drivers to make ends meet.

Here’s a problem you probably haven’t been thinking about: How do you make swag recession-proof? Variety reports that as the Golden Globes approach, Hollywood is rethinking its approach to “gifting suites”—the sites where celebrities typically show up during awards season and are photographed getting bags of free stuff. Naturally, “in hard times, a photo of a star holding up a free pair of jeans in People magazine may rub some consumers, especially those recently laid off, the wrong way,” the paper notes. One creative solution: When the stars shows up at the gifting suite, write a check to charity. That’s swag we can believe in.

Adolf Merckle, one of Germany's richest men, has committed suicide after talks with creditors failed to save his business empire, which spanned from pharmaceuticals to cement. Merckle's personal wealth was estimated by Forbes to be about $9 billion, and he was known as a modest man who bicycled to work. Merckle was particularly hurt when, after shorting Volkswagen, the auto company's share price jumped after Porsche unexpectedly revealed it controlled more of VW than previously believed. He died after being hit by a train. In a statement, his family said, "The desperate situation of his companies caused by the financial crisis, the uncertainties of the last few weeks and his powerlessness to act, have broken the passionate family entrepreneur."

If all the bad economic news has you down, here's something from the world of celebrity childbirth: Jennifer Garner gave birth to her and Ben Affleck's second daughter yesterday at a Los Angeles hospital. Garner's rep confirmed the news to Us Weekly. Both Affleck and Garner are 36, and their first daughter, Violet, is three.

It may not be stylish, but the new presidential limo, set to debut on inauguration day, should be the most impenetrable vehicle on the road. Dubbed "The Beast" for its tank-like construction, the custom-built Cadillac will feature tougher material than its predecessors, CNN reports. The vehicle's doors are likely as heavy as a 757's and can lock like a bank vault if necessary. The interior will be completely sound-proof and should help the president-elect feel like he's in a cocoon. While a Cadillac may seem like a gas-guzzler, the car's expected diesel engine should help Obama maintain his green bona fides.