Noticing, perhaps, how well it worked for the other party, the Republican National Committee has chosen an African American man as its leader. After six rounds of voting, the RNC chose former Maryland Lieutenant Governor Michael Steele as its next chairman. In the final round of voting, Steele defeated Katon Dawson, the chairman of the South Carolina Republican Party and a former member of a whites-only country club. Steele’s politics are generally centrist.

With Wall Street and Main Street transfixed on how the Obama administration will fix the fledging economy, now comes news that their plan to form a "bad bank" for toxic assets might not come to be. "Significant questions remain about key measures of the plan, as well as where the funding will come from," CNBC reported this afternoon, per a source. A second source added that the plan may not see the light of day at all. "They'll be a lot more questions unanswered than answered and they've got to get it right," an industry source explained. CNBC's Charlie Gasparino reported the news on air. Watch his report here.

Will President Obama nominate Republican Sen. Judd Gregg to be secretary of the Commerce Department, thereby leaving Republicans without a respected leader on financial issues in the Senate? Worse for the GOP, if Gregg is tapped, his replacement would probably be a Democrat, which would hand Obama a 60-seat majority. "I am aware that my name is one of those being considered by the White House for Secretary of Commerce, and am honored to be considered, along with others, for the position," Gregg said in a statement this morning. At this point it's unclear how likely it is that Obama would pick Gregg. Stay tuned.

A sign, perhaps, of the long year ahead: The Dow Jones Industrial Average fell 9 percent in January, closing today at almost exactly 8000 points. According to The Wall Street Journal, “Historically, stocks' performance in January has foretold how well the market will perform for the rest of the year.” The S&P, meanwhile, fell 2.3 percent in the same period of time. “When the S&P falls in January, the index loses an average of 2.4% in the next 11 months, according to data going back to 1950 from Ned Davis Research. When the S&P rises in January, the index posts an average gain of 12.3% in the subsequent period.”

Start spreading the news. New York City Mayor Michael Bloomberg issued a stark assessment of the city's troubled fiscal situation in a budget address this morning. "It's fair to say that nobody was prepared for the severity of the downturn we are experiencing," he said. So how bad is it? The city must close a $4 billion gap for the 2010 fiscal year. And that's after $2 billion in cost cuts. But Bloomberg is optimistic that through labor concessions, Medicaid reimbursements and federal assistance, it's "manageable."

Fashion isn’t, apparently, the only field of design in which Michelle Obama has (relatively) affordable taste: According to Us Weekly, the new first lady will be decorating the White House with Pottery Barn. Of course, it helps to have high-profile interior decorator Michael Smith to help out. Smith says he wants to emphasize the Obamas’ “casual style” by “utilizing affordable brands.”

The Obama administration has authorized $20 million in emergency aid for relief missions in the Gaza Strip following the Israeli offensive that killed nearly 1,300 Palestinians and caused $2 billion in damage. The support comes after the United Nations asked for $613 million for the area hard-hit by the three-week conflict. The funds will be directed to food, medical care, shelter and other infrastructure advancements.

As soon as it finished impeaching Rod Blagojevich, the Illinois State Senate pulled out a bible, procured a State Supreme Court justice, and swore former Lt. Gov. Patrick Quinn in as the new governor. Quinn will face voters in the 2010 election. “I’m not for this imperial governance,” he said. “I want to say to the people of Illinois, the ordeal is over.”

When questions over Timothy Geithner’s taxes emerged, National Economic Council chief, Larry Summers, took charge of Obama’s stimulus package, leading some to ask whether the two economic heavyweights could coexist. At The New Republic, Noam Scheiber expects the two men will get along just fine, especially because both have a “formidable relationship with the president,” but that doesn’t mean Geithner shouldn’t watch his back. “In the end, Geithner should probably be more wary of another Clinton-era principal: Hillary. Foggy Bottom has spent the last month hinting at its designs on economic policy, which would presumably come at the expense of Treasury.”

Can we take this as a sign that Rudy Giuliani is not planning to run for governor in 2010? The former presidential candidate and New York mayor defended Wall Street bonuses in an interview with CNN today, citing their trickle-down effect on the city's economy. He warned that, "Those bonuses, if they are reversed, are going to cause unemployment in New York," noting that when "Wall Street has $1 billion, $2 billion in bonuses, the city had a deficit. Wall Street has $15 billion to $20 billion, New York City had a $2 billion, $3 billion surplus, and it's because that money gets spent. That money goes directly into the economy. First of all, it gets taxed as income. Secondly, it gets taxes again when somebody buys something with it."

After weeks of praising Obama, an ailing Fidel Castro has reverted to his usual brand of antagonism, demanding that the "abusive... empire" return Guantánamo Bay to Cuban control and stop "the genocide against Palestinians." The criticism came via the quondam dictator's preferred platform, a personal web column entitled "Reflections of Comrade Fidel." In the same column last week, Castro praised Obama as "a living symbol of the American dream." Though Obama plans to close Guantánamo's infamous prison, the US Navy plans to maintain its base there.

Iraq's last elections, in 2005, were hailed as a major achievement, but proved to be a precursor to civil war as many Sunni Arabs boycotted the polls, leading to skewed results and further sectarian divisions. This time around, Iraqis are hoping that Saturday's provincial elections will be more representative and lay the foundation for a stable government that can facilitate an American withdrawal. Some 14,400 candidates representing 407 parties are running for 440 seats and the campaigns have been more competitive this time around—partly because candidates enjoy enough security to campaign in public, a luxury few had the last time around. The dangers have not passed entirely, however, and five candidates were recently assassinated in a 24-hour period.

Push back expectations for a rebound. The U.S. GDP shrank 3.8 percent in the fourth quarter, the most since 1982, the Commerce Department reported this morning. "A collapse in spending led to a buildup in inventories that will cause companies to retrench even more in the early part of this year," according to Bloomberg. Still, the contraction was less than the 5.5 percent decline that analysts expected.

Two weeks after its approval in the House, a bill that will provide 11 million low-income children with health insurance passed in the Senate last night. According to the Washington Post, the law will expand “The State Children’s Health Insurance Program, which is aimed at families earning too much money to qualify for Medicaid but not enough to afford private insurance.” The new law expands the program’s budget by $32.8 billion and, for the first time ever, contains provisions for pregnant women and legal immigrant children. Senators voted mostly along party lines to approve the measure.

Long-held campaigns to save rainforests across the world appear to be all for naught—in a good way. New "secondary" forests are proliferating in Latin America, Asia, and the tropics, on the farmland that people abandon before moving towards cities in search of urban life. For every acre of rainforest destroyed each year, 50 new acres formed from old farmland replace them, resulting in absorption of carbon dioxide and creation of homes for endangered species, reports The New York Times. Environmentalists still encourage efforts to save the native growth, and Bill Laurance, senior scientist at the Smithsonian, said, "Yes, there are forests growing back, but not all forests are equal." Because of the heat and tropics, new jungle can expand rapidly.

With Bush's $700 billion financial rescue failing to stabilize the industry, President Obama's much anticipated plan for a second financial bailout to pick up where it left off is beginning to take shape. Top officials are discussing a two-part rescue that would create a "bad bank" to absorb toxic assets while also guaranteeing against losses on some other holdings. The plan is similar to one originally suggested by then-Treasury Secretary Hank Paulson after the initial crisis broke and another version of the "bad bank," Resolution Trust Corp, was employed during the savings-and-loan crisis. The costs, however, may be staggering, even compared to big tickets like Bush's first bailout and Obama's proposed stimulus plan. According to the Wall Street Journal, the "bad bank" could end up taking on some $2 trillion in assets—all without any clear idea of how much, if anything, they're worth on the market.

This year's Super Bowl Sunday might just be the best of the worst of times for advertisers. As the industry faces one of their most dismal years ever, agencies still need to deliver the high quality entertainment expected during their 30-second spots (which run $3 million this year) while trying not to alienate consumers by pushing their most expensive products. "Advertisers have to strike a delicate balance this year," said Tim Calkins, a marketing professor at Northwestern University, adding, "You don't want to seem tone-deaf" regarding the recession. At least two ads for Denny's and the Universal Orlando Resort will reference the economy through savings offers, and the Anheuser-Busch beer commercials (with those trotting Clydesdales) will have lighthearted tones.

Harold Nicholson, the highest ranking CIA officer ever convicted of spying, already had a sensational enough life story after intelligence officials caught him selling the secret identities of his fellow agents to the Russians for a pile of ducats. Now the government is accusing the famed traitor of continuing his spy work through his army veteran son, Nathan, who was only 12 when Nicholson was put in jail in 1997. According to an unsealed indictment, the two coordinated trips to Mexico, Peru, and Cyprus to meet Russian agents and pass on information beginning in 2006. Nathan would return with $35,000 for his troubles, partly hidden in PlayStation videogame cases. "You have been brave enough to step into this new unseen world that is sometimes dangerous but always fascinating," Harold Nicholson wrote to his son last July, according to the New York Times.

So much for a low-profile for Joe Biden. President Obama announced this morning that Biden will head a White House task force on the middle class. "This isn't just an economic concept," Obama said after addressing the nation's 3.8 percent GDP contraction. "This is a continuing disaster for America's working families. As worrying as these numbers are, it's what they mean to the American people that really matters." Economic advisor Jared Bernstein will also serve as executive director of the task force. To coincide with the announcement, Biden published an op-ed in USA Today outlining the agenda and promising transparency.

Every day brings gloomier news for the economy, but Amazon.com has proved itself a rare bright spot with rising profits and innovative new products. The online retailer posted an 8.7 percent increase in profits in the fourth quarter fueled by an increased use of promotions and discounts to attract customers wary to part with their cash in the recession. The company also got a boost from their popular new digital book reader, Kindle, which sold out for the second straight holiday season.

In response to rumors about an improper relationship between New York Times publisher Arthur “Pinch” Sulzberger and would-be senator Caroline Kennedy, the newspaper has issued a statement: “Mr. Sulzberger is not and never has been romantically involved with Ms. Kennedy.” Gawker led the charge to connect the odd couple; Page Six offered an alternate Sulzberger-lover, a “vivacious woman” by the name of Helen Ward. Asked for comment, Ward responded enigmatically: “There is only one woman in Pinch Sulzberger’s life, and that is the Gray Lady.”

Could Ellen Barkin be the new Carrie Bradshaw? The actress seems primed for the ultimate comeback: she’s set to executive-produce and star in a pilot for HBO based on her post-divorce dalliances as a so-called cougar. And Page Six suspects the target of the show will be her billionaire ex Rob Perelman. Barkin, 54, has $60 million from their 2006 split. “You have this character in her early 50s whose life explodes suddenly," writer Shauna Cross told Variety. "Her nerve and life experience allows her to tell the world to go screw itself, and they love her for it." Added a source: "There's so much source material to work with… The first week, Ellen could be out on the sidewalk in her socks screaming as the movers are loading up her things. In the second week, she could soak Ron with water."

The bishop in the news for denying the Holocaust and receiving rehabilitation from the Pope has apologized for his "imprudent" remarks. Bishop Richard Williamson posted a note on his personal blog today expressing his regret for causing "distress and problems" for the Vatican.