Party's over, Wall Street! With taxpayers $700 billion lighter thanks to the financial industry's ineptitude, President Obama is planning a rapid overhaul of regulations to prevent them from spinning out of control in the future. Treasury Secretary nominee Timothy Geithner is expected to pursue new rules, including an overhaul of credit rating agencies, which officials say face a conflict of interest by rating the companies that pay them. Without such a move, "people are not going to have confidence that the ratings are worth relying on, worth the paper they're printed on," the new SEC head, Mary Schapiro said. Other plans include new federal standards on mortgage brokers as well as creating a "central clearinghouse" to better oversee derivatives like credit default swaps, a kind of pseudo-insurance that played a major role in turning the subprime mortgage crisis into an all-out economic meltdown.

It’s that time of year again, when the stars of Hollywood and the business world mingle on the Alpine slopes of Davos, Switzerland, at the World Economic Forum. But this year’s forum, which starts Tuesday, is going to look a whole lot different. John Thain canceled his ticket. Lloyd Blankfein’s sending his deputy. Larry Summers is concentrating on the financial crisis at home. Angelina’s got other plans. And even Bono won’t be there—he’s got a new album to promote. And Obama’s got no time to discuss Davos’ agenda, “Shaping the Post-Crisis World,” in a ski lodge. He’s not even sending Ben Bernanke—instead the other world leaders will have to make do with his senior adviser and longtime pal Valerie Jarrett.

Watch your back, Cuddle Guv! The Kennedy family is spoiling for a fight over New York Gov. David Paterson’s treatment of Caroline during her bid for Hillary Clinton’s Senate seat. The clan is “apoplectic,” the New York Post reports. “The governor’s going to pay for this,” a “well-placed Democrat” tells the paper. “Ted is furious. The family is furious. The Kennedys are now against the governor.” And New York magazine reports Paterson wanted Caroline to lie about her withdrawal. “You can’t withdraw,” he reportedly told her late Wednesday. “You’ve got to stay in this thing, and I’ll just not pick you.”

The fighting on the ground in Gaza is over. Now Israel’s preparing for a wave of international litigation in the wake of its 22-day war with Hamas, appointing a team of international law experts to defend its soldiers against any war crimes charges. “Officers and soldiers sent on the mission in Gaza must know that they are safe from various tribunals and that Israel will help and defend them just as they protected us with their bodies during the military operation,” Prime Minister Ehud Olmert said today. While some human rights groups have accused Israel of war crimes in the deaths of hundreds of civilians in Gaza, Israel says Hamas used civilian centers and women and children as shields in the densely populated area. A spokesman for Hamas said today the group will sign a one-year truce if Israel and Egypt open their border crossings with Gaza.

It was Paul Blart: Mall Cop—yawn—atop the box office again this weekend, but this year’s award show darling, Slumdog Millionaire, rocketed up to No. 5 on the strength of its 10 Oscar nominations to earn an estimated $10.6 million, up 80 percent from last week. Kevin James’ security guard caper (“laffer,” in Variety parlance) earned $21.5 million, holding off the Kate Beckinsale-less Underworld: Rise of the Lycans, which picked up $20.7 million and the No. 2 spot. And it looks like another bomb for Brendan Fraser, whose family adventure Inkheart made its debut at No. 7 with just $7.7 million from 2,910 theaters.

Chesley Sullenberger, the US Airways miracle pilot, yesterday returned to his home in Danville, Calif., and was met by thousands of cheering, flag-waving fans. Sullenberger humbly deferred to his "experienced crew" and told the gathered crowd, "We were simply doing the job we were trained to do." The hero pilot has stayed out of the public eye since Jan. 15, when he successfully landed Flight 1549 in the Hudson River despite losing power in both engines. His first media interview will be with Katie Couric for 60 Minutes and is expected to air Feb. 8.

One way never to get bored of the news: Stick to an all Boris Johnson diet. The blond-mopped London mayor’s op-eds in The Daily Telegraph and elsewhere, and generally any old story about him, are better than most of what’s out there. And today’s profile of him the Daily Mail is no exception—he greets the reporter with “welcome to my kingdom” and his quotes just get better. His PR and communications people can’t help as Bojo “scratches his head and bumbles” when asked about his prime ministerial ambitions before he replies: “At the moment I am like some underwater sea creature, a gigantic coelenterate, sucking everything in, and later on I am going to start expelling.” And that’s before he calls himself a “Tory pirate who’s captured Labour’s vital vessel” and blushingly stammers he’s “no sex god.”

President Obama's famously hotheaded and legendarily crude chief of staff, Rahm Emanuel, may be the "second most powerful man in the country," ahead of Vice President Joe Biden and Secretary of State Hillary Clinton, The New York Times reports. Emanuel is a far greater political celebrity than previous chiefs of staff, inspiring sketches on Saturday Night Live and articles in Mad magazine, but his behind the scenes role is crucial to carrying out Obama's agenda. He had a hand in bringing in nearly every member of the new Cabinet as well as top White House staff and is the president's point man for dealing with Congress. His reputation as a hothead also gives him an instant reputation as Obama's "enforcer." The president once joked that an injury to Emanuel's middle finger as a teenager "rendered him practically mute."

Politico reports that Kirsten Gillibrand's "aggressiveness and self-confidence"—which may have endeared her to the aggressively self-confident Hillary Clinton and David Paterson—has earned the Senate appointee her share of foes, too. Her nickname: Tracy Flick, after Reese Witherspoon's ruthlessly high-strung character in Election. The conventional wisdom on Gillibrand is a flashback to Clinton's early Senate years: "She's smart and capable, but she's rubbed people the wrong the way"..."I think she's going to get a serious primary in 2010."

One sign of the new culture in the White House? Obama’s “man hug.” The Chicago Tribune reports the president has been greeting senior staffers with “a handshake, followed by a quick one-handed hug and two hearty pats on the back.” “I call that a ‘shug,’” an editor at Esquire magazine told the paper. “It’s a shake and a hug together.” But be careful trying this at home, the Tribune warns. There are unspoken rules—no lingering!

During the Q&A portion of last night's Miss America pageant, Miss New York fielded a strangely relevant question: Was media coverage of Governor Sarah Palin's own pageant past unfair? A cut-away shot during the question's formulation revealed contestant Leigh Taylor Smith mouthing silently: "It's true." Her answer: "I don't think it's fair because I don't think people understand what the Miss America organization is all about, and that is why we're all here. We're here to prove that it is about scholarship, it is about intelligent women, it is about caring for others." Originally from Hampton, Va., Smith lost out to Miss Indiana Katie Stam for the Miss America title.

Remember that pesky "but the terrorists want Obama to win" argument from the election? It's settled: Al Qaeda hates Obama, too. To combat his international popularity the group has launched a full-blown propaganda attack, hurling insults like "house negro," "hypocrite," and "enemy to Muslims." The Washington Post reports the attacks constitute "a deliberate, even desperate, propaganda campaign against a president who appears to have gotten under al-Qaeda's skin. The departure of George W. Bush deprived al-Qaeda of a polarizing American leader who reliably drove recruits and donations to the terrorist group."

Indian Prime Minister Manmohan Singh's heart problems couldn't have come at a worse time, with an economic crisis spiraling out of control, terrorism on the rise, and tensions with Pakistan high. The 76-year-old leader underwent heart bypass surgery yesterday and is currently in intensive care, where doctors say he will remain for at least three days. India doesn't have an established procedure for replacing its leader in an emergency. Foreign Minister Pranab Mukherjee has taken over temporarily as acting prime minister, but does not have full responsibilities, as authority over the military rests with the defense minister. Singh previously underwent a heart bypass in 1990 and an angioplasty in 2003, and he's diabetic, raising concerns that his health could affect his ability to function during a crisis period.

Detroit's Mr. Song Millinery is brimming with orders for Aretha Franklin's memorable—some might say fanciful—inauguration hat. The Los Angeles Times reports that Franklin, who sang (live!) My Country, 'Tis of Thee at Obama's inauguration, was an established fan of Luke Song's hats, and "she helped come up with the concept, wandering around the store and 'adding and subtracting to what we had already' to match a coat she wanted to wear." But does it take a diva of Franklin's caliber to pull off the look?

The BBC is drawing sharp criticism from government officials, religious leaders, and even its own staff for refusing to air a segment in which groups asked viewers to help fund humanitarian aid in Gaza. Citing bias, the BBC declined to air the plea, which was assembled by 13 major charities. Rival broadcasters ITV and Channel 4 consider the documentary a public service and will air it. The Archbishop of York's response, according to The Guardian: "This is not an appeal by Hamas...By declining their request, the BBC has already taken sides." A BBC reporter told the newspaper anonymously: "There's a feeling of real anger—made worse by the fact that contractually we are unable to speak out."

Toy company Ty, famous for its Beanie Babies, is rubbing some the wrong way with its latest dolls—"Marvelous Malia" and "Sweet Sasha." The toys' similarity to the Obama daughters, Malia and Sasha, has the new first lady upset. "We believe it is inappropriate to use young, private citizens for marketing purposes," Obama spokeswoman Katie McCormick Lelyveld said in a statement. Ty Inc. originally credited the girls with inspiring the dolls, but later backtracked and claimed the names were chosen simply because they were "beautiful."