The Obama administration is considering a plan that would bankrupt General Motors and Chrysler and divide each company’s assets into “good” and “bad.” With the ejection of GM CEO Rick Wagoner, the plan marks the government’s rapidly increasing involvement in the auto industry. The plan is risky for Obama, as a bankruptcy filing could hurt thousands of important Democratic constituents—GM’s unionized workers. The “good” GM would retain brands like Cadillac and Chevrolet and remain independent, while the “good” Chrysler would be sold to Fiat SpA, if a proposed merger goes through. “We cannot, we must not, and we will not let our auto industry simply vanish,” Obama said in a speech Monday that set deadlines for both companies to draft plans to save their businesses before receiving more federal support.

Another chaotic start to the week: Off the news that President Obama forced the ouster of GM’s chief executive, the Dow Jones Industrial Average dropped 254.16 points, or 3.27 percent, to close at 7,522.02, with GM's share price falling below $3. The S&P and Nasdaq also sank 3 percent. Asian markets took a tumble in the early morning hours, with automobile and financial stocks falling sharply. The news that Japan’s industrial production was down for the fifth consecutive month caused the Nikkei 225 Average to finish down 4.5 percent. Meanwhile, the European Dow dropped 2.1 percent, causing the leads from last week to vanish. 

Ultimatums are always the smartest way to go: French President Nicolas Sarkozy is threatening to walk out of this week’s Group of 20 summit if his plan for tougher global financial regulations is not adopted. The main item on the agenda for the London summit is financial oversight, but Sarkozy, who has blamed the “Anglo-Saxons” for the financial crisis and says he will not tolerate empty talk at the meeting, specifically wants to create a global financial regulator, an idea British Prime Minister Gordon Brown has called ridiculous. Germany, Britain, and the US are pushing for a “college” of regulators, located in several countries, that will supervise companies. Meanwhile, a report from the Organization for Economic Cooperation and Development, a group of 30 Western democracies, predicts that unemployment will reach 10 percent next year in most developed nations and that growth will slump 4.3 percent this year.

Double standard alert: The Obama administration told GM CEO Rick Wagoner he had to fall on his sword to save his company, but the bailed-out bank execs all get to keep their jobs. What gives? wonders CNN Money’s Paul La Monica. “All it takes is for the stocks of big banks like Citigroup and Bank of America to plunge to multi-year lows for the government to come running,” he writes. Meanwhile, GM and Chrysler have to jump through hoops to get $17.4 billion in loans, and now the government has rejected their turnaround plans and forced Wagoner’s ouster. “There seems to be this belief about how you need to treat financial executives with kid gloves because they’re needed to dig us out of this mess,” Jamie Court, president of Consumer Watchdog, tells CNN. Getting rid of Wagoner while letting Citigroup’s Vikram Pandit and Bank of America’s Kenneth Lewis stay on is a “head-scratcher,” writes La Monica.

ShoWest, the big Hollywood convention held every year in Las Vegas, appears to be downsizing alongside the economy this year. While last year’s gathering included screenings of blockbusters like Transformers and Kung Fu Panda, this year no major titles made the cut. The headliners include The Proposal with Sandra Bullock, DreamWorks’ The Soloist, and a few other relatively small films. Attendance to the conference is down 15 percent to 2,400, due in part to the absence of studio executives, who are rumored to be lying low so as not to draw attention to their studios’ profits. Usually the MPAA releases industry stats the week before ShoWest to fuel the insider festivities, but this year it didn’t want to call attention to Hollywood’s high profits in case it might scare away a potential federal bailout.

Hillary Clinton must have missed her diplomat’s lesson on Catholicism: Politico’s Ben Smith reports that during her recent trip to Mexico, the secretary of state visited the Basilica of Our Lady of Guadalupe, where she left a bouquet of white flowers on behalf of the American people. Upon seeing Our Lady of Guadalupe, a portrait of Mary that miraculously appeared on the cloak of St. Juan Diego in 1531, Clinton asked, “Who painted it?” Her escort replied, “God!” Not realizing her faux pas, Clinton kept on, according to one Mexican report, asking, “But who painted the painting, the roses?”

Zero Hedge has this scary report from an anonymous trader: Those unexpected profits at US banks in January and February weren’t as miraculous as they seemed. Not so coincidentally, those were the months when AIG’s financial products division was unwinding a huge number of its contracts—using taxpayer dollars. Such massive, desperate unwinds were exactly what the government’s takeover of AIG was supposed to avoid. The trades, explains Seeking Alpha, “were allegedly enormously profitable” for the biggest banks in the credit default swaps market. Says the anonymous trader: “I think for the big correlation players this could have easily been US$1-2bn per bank in this period.”

North Korea is set to indict the two American journalists who were busted on the wrong side of the China-North Korea border, and it looks as if the outcome may be a foregone conclusion: North Korea’s state-run press agency reports that “suspected hostile activities have been confirmed by evidence and [the journalists’] statements.” Laura Ling and Euna Lee, who were working for Al Gore’s TV network, Current TV, are being interrogated in Pyongyang after their March 17 arrest. Diplomatic efforts are under way to aid the pair, with the US using the Swedish Embassy as an intermediary. North Korea says it is treating the two prisoners in accordance with international law.

In dealing with the current economic crisis, the government is using Wall Street to help recover from all the damage it caused. At the same time, the government is putting in place policies that will severely restrain Wall Street in the future. The New Yorker's James Surowiecki says this "balancing act" is cause for concern. Surowiecki asserts that the U.S. will weather the storm—like it has in previous crises—but that this may be more of a curse than a blessing. The financial system is so "fundamentally unhealthy, too big and volatile for anyone's good" that if it survives it will likely wreak havoc further down the road. There has been plenty of talk of reforming and regulating the system during other crisis, and nothing actually changed. A successful economic recovery may doom us to repeat our mistakes. "We've been like people living on a floodplain who during the deluge talk about moving or making the levees higher but end up rebuilding in the same spot," Surowiecki writes.

Oh, joy. Fox has grown tired of pretty people so they’ve stolen the producer of The Bachelor and are launching the first “dating show for the rest of us” with—the horror!—average-looking people. The last time Mike Fleiss teamed up with Fox the dastardly duo spawned Who Wants to Marry a Multi-Millionaire? That led to countless imitators and the collective explosion of millions of viewers’ brain cells. "For six years it's been skinny-minis and good-looking bachelors, and that's not what the dating world looks like," said Fox's president of alternative programming. The show will feature a group of women competing for a Kevin James lookalike. The Bachelor meets The Biggest Loser? Can’t wait.

If President Obama's administration is successful, it will likely be in spite of, not because of Congress. “The contours of failure are now clearly visible," Jonathan Chait writes in The New Republic. "In Obama's case, as with his [Democratic] predecessors, the prospective culprit is the same: Democrats in Congress, and especially the Senate.” Chait’s article, entitled “Why the Democrats Can’t Govern,” contrasts Obama to Bush, who, with only 50 senators in his first term, passed a massive tax cut, education reform, two war resolutions, and a Medicare prescription drug benefit. He sees a few historical reasons for the Democrats’ troubles: one, 60 years of congressional control starting in 1933 left the party more attuned to the nuances of the chamber than to party discipline; two, “the influence of business and the rich unites Republicans and splits Democrats”; and three, a “self-fulfilling prophecy”: “When their party controls all of Washington, things tend to go south quickly. The president's popularity plunges, and soon his copartisans in Congress find themselves scrambling to keep from losing their own seats in the political undertow. … And, so, they hedge their bets by carving out an independent identity.”

Pakistani security forces have captured six and killed eight of the militants who assaulted a police academy in Lahore today. The assault left at least 11 police officers dead--earlier reports of at least 20 deaths appear to have been exaggerated, although the death toll is still expected to rise. Two of the militants died by blowing themselves up.

Paul Magliocchetti, one of the biggest lobbyists on Washington’s K Street, will be shutting down his operation, the PMA Group, next week after recent a raid by the feds. Magliocchetti, whose ties to Congress include the influential Rep. John Murtha, is suspected of breaking campaign finance law by funneling illegal donations to friendly lawmakers. More important, the feds are rumored to be poring over his records to see if he broke ethics laws by doling out gifts to politicians—an investigation that could ensnare many of the D.C. elite.

Although bonuses are out of the question, what about retirement packages? Rick Wagoner, the CEO of GM who was ordered to step down by the White House yesterday, will be getting a cozy $20 million to help him cope with retirement. Wagoner presided over GM as it lost billions, accepted billions from taxpayers, and "announced plans to cut 47,000 employees by the end of 2009."

One longtime US ally won't be on Obama's side at this week's G-20 summit: German Chancellor Angela Merkel says that, though she looks forward to working with Obama, she opposes a deficit-heavy global stimulus resembling Obama's economic policy. As the European Union's biggest economy, Germany's economic policy will hold great sway in the effectiveness of any unified global economic plan. In an interview with The New York Times, Merkel balanced geniality with her bottom line rejection of Obama's economic leanings: "International policy is, for all the friendship and commonality, always also about representing the interests of one's own country." Merkel remains stalwart on her rejection of stimulus spending and refusal to allow the European Central Bank to operate like America's Federal Reserve.

Google is hell-bent on gaining ground in the biggest Internet market in the world: China. To do so, the ubiquitous company has begun a foray into music downloads, one of the few realms it does not have much influence. Chinese users dedicate most of their time online to searching for music, and Google had not included illegal music sites in its search results, putting it at a competitive disadvantage. Now, Google has struck a revenue sharing deal with numerous record companies and will offer free downloads to users. It is likely that they will be closely watching to see if the new business model could help revive the struggling music industry. However, beyond quick downloads and no viruses, what is the incentive to stop using the illegal sites?

A lengthy story in the new issue of Vanity Fair takes the gloves off, portraying New York Times publisher Arthur Sulzberger as a man who inherited the position due to his name alone. Mark Bowden writes that with the death of newsprint looming on the horizon, the Times doesn't need a leader with absolute faith in the infallibility of the paper of record, it needs an innovative mind ready to shepherd the company into the new age of journalism. Numerous high-profile buyers are rumored to be waiting in the wings should the paper be put on the auction block, including Bloomberg, Google and Rupert Murdoch. Sulzberger's attitude is said to be arrogant, aloof, and born from a sense of entitlement--all qualities inappropriate for the man at the helm of the nation's most respected paper during journalism's darkest hour.

World War I was started by the assassination of the Archduke Ferdinand in Sarajevo. World War II was started by Germany’s invasion of Poland. World War III will be started by … Al Franken? So says Texas Sen. John Cornyn, if Democrats try to seat Franken to the Senate before Republican Norm Coleman has a chance to appeal the election results in federal court. Cornyn, chairman of the National Republican Senatorial Committee, said a federal challenge to the results could take “years.”

In a riveting piece in Vanity Fair, Christopher Hitchens recalls the three different Lebanons he experienced during a recent trip: the buoyant modern Valentine's Day rally commemorating the assassination of former prime minister Rafik Hariri; the brutal beating and attempted kidnapping Hitchens experienced in broad daylight after attempting to deface a poster of a swastika promoting a Syrian political group; and Hezbollah's commemoration of the loss of its martyrs, that hints that Lebanon may have violence in its future. On the one hand, the Lebanese live in a vibrant secular society; on the other hand, the country remains the prime ground for a proxy war between the militant Hezbollah and the west. As Hitchens put it, "The whole place has an ominously pre-war feeling to it, as if the dress rehearsals are almost over."

It's not a chicken-and-egg paradox: the toaster came before pre-sliced loaves, and it's turning 100 this year. Invented by General Electric technician Frank Shailor, the D-12 toaster, which had no covering and required users to turn the bread, sold a million units before the design crossed the Atlantic and took Britain by storm. Mechanic Charles Strite improved on Shailor's basic design by adding springs and a timer to create a pop up toaster in 1919, which went oh-so-well with the pre-sliced loaf that Otto Frederich Rohwedder introduced in 1929. In other words: toaster technology reached its height in the 1920s, and breakfast was forever changed.

He cries, he preaches, he accuses FEMA of operating concentration camps. “I’m a rodeo clown,” says Glenn Beck, Fox News' newest commentator, who draws 2.3 million viewer in the notoriously slow 5 pm slot—more than any other cable news host except Bill O'Reilly or Sean Hannity. Beck's rallying cry, "You are not alone," obviously resonates with fearful Americans. Although he may linger over doomsday scenarios on the show—last month Beck talked to experts about the possibility of widespread violence due to global financial panic and asked viewers to "think the unthinkable”—The New York Times writes “he understands his role as commentator. In an interview last week Beck said, 'I say on the air all time, "if you take what I say as gospel, you’re an idiot."’”

Robert Stewart, 45, allegedly shot and killed seven patients and a nurse at a nursing home in Carthage, North Carolina yesterday until police shot and wounded him. Three other people, including a police officer and a nursing home visitor were wounded in the attack. A witness said Stewart was armed with a rifle, shotgun and other weapons. Stewart's possible motives are unclear, as he was not employed by the nursing home, nor did he know any of the patients. He's facing eight counts of first-degree murder, plus felony assault on a police officer. Other charges are pending.

With GM ordered to restructure within 60 days, its Hummer brand may be all but dead. Who wants to tell the Iraqis? The New York Times reports on “Al Sultan for Trading Cars,” a Baghdad car dealership specializing in Hummers. “Iraqis love them because they’re really a symbol of power,” says Ali al-Hilli, who runs the dealership. He has so far sold over 20 H3s, or about one every ten days. “In Iraq, people judge you by your car, and you’re not a man without one,” says al-Hilli.

Might the future of your local newspaper depend on a housing project in Brazil? Ailing real estate mogul and Tribune Company owner Sam Zell has invested in a controversial housing development project in Brazil. His real estate private-equity firm, Equity International Properties, has a stake in the $15 billion government program to create one million low-income homes there. The program has been widely criticized for its reliance on private money, and the possibility that the new homes will create urban sprawl in the country. Half of Equity International Properties’ invested capital is in Brazil.

Transcripts of the 911 calls placed after Natasha Richardson’s skiing accident reveal the last few hours of the late star’s life. Shortly after her fall on the slopes of Mont Tremblant, Quebec, a call went out to 911. "Priority 3, Tremblant resort … female, 42 years old, 17-Bravo-1," the dispatcher said, which means “possibly dangerous.” The ambulance arrived 17 minutes later, but no one was there. Richardson had walked off, feeling fine. But after she went back to her hotel, she experienced more headaches, and the hotel called 911. This time, the the injury was classified as "dangerous." From the ambulance, Richardson had lost orientation and rated a 12 out of 15 on the Glasgow measurement of conciousness, which is “worrisome,” but still treatable. She was then transferred by ambulance to a hospital in Montreal, where a neurologist said that her pupils were unresponsive, which is a sign of brain damage. The next day, Richardson was airlifted to New York, and died shortly thereafter.

Madonna's adopted son David was reunited with his father, Yohane Banda, after the pop singer arrived in Malawi yesterday to adopt Mercy, a four-year-old girl she first met when she adopted David, The Times of London reports. An employee of the Kumbali lodge outside the country's capital of Lilongwe, where the reunion took place, said Yohane was so happy that he was hopping from foot to foot, although the actual reunion was private. Madonna's adoption of David three years ago became mired in controversy as she was apparently able to bypass the 18 to 24-month assessment period required by Malawian law.

Three decades after the Khmer Rouge’s genocide in Cambodia, its leaders are finally standing trial. Hearings begin today for top leaders facing charges of crimes against humanity, war crimes, torture, and premeditated murder. Questioning began for Kaing Khev Iev, (aka. “Duch”), who ran the country’s most notorious death camp, the S-21. Prison guards, survivors and their family of the S-21 will share their experiences over the course of this trial. Several former Khmer Rouge still hold prominent positions in the Cambodian government, and after decades of corruption there, this trial marks a new period of accountability.

Apparently, the Obama administration's dismissal of Rick Wagoner as head of GM wasn't enough to save the car giants. The president slammed the restructuring plans of General Motors and Chrysler today, saying that neither company's proposed changes were enough to justify further bailout money. Obama also demanded "painful concessions" from creditors and unions and said that controlled bankruptcy could help the companies "restructure quickly and emerge stronger." The administration will fund GM for 60 more days to allow it time to come up with a new plan for restructuring, and will give Chrysler 30 days and consider lending it up to $6 billion to accomplish a merger with the Italian automaker Fiat.

He's been off leaderboards for months following reconstructive knee surgery last June, but USA Today says Tiger Woods is back in action after a soaring win at the weekend's Arnold Palmer Invitational. Recent lackluster performances had golf aficionados worried that Tiger would be a dud at the coming Masters championship. Though Woods began the Arnold Palmer respectably, he didn't take the lead until the 14th hole when then-leader Sean O'Hair botched a birdie and Tiger roared ahead with a perfectly executed putt. The harrowing game saw three lead changes over the final three holes before settling on the "predictable winner." Though sweet for Woods, the result was particularly bitter for O'Hair, who finds himself now in his second straight year of narrowly losing the tournament to Tiger. "It's just a little bit disappointing that I couldn't close it," O'Hair said.

All is not well in the house of Spelling. Warming up, perhaps, for her forthcoming tell-all memoir, Hollywood matriarch Candy Spelling spoke to People magazine about her estranged relationship with daughter, actress, and reality star Tori. The 63-year-old grandmother said she's never met her granddaughter Stella and that she doesn't know why Tori ignores her: "I've tried to talk to her, but that doesn't work. She may not even know why she's angry." As for her famed $150M mansion, Candy comments that she has "fantasized for years about a wonderful playhouse on the grounds for children," but her belief that she would never know Tori's children drove Candy to sell the home. Candy's consolation? "Someday my grandchildren will know who I am because of the trust funds I've set up."

Gisele Bündchen has no complaints—nor should she: The supermodel is on the cover of the new issue of Vanity Fair. The 28-year-old Brazilian-born supermodel just married New England Patriots quarterback Tom Brady and her numerous sponsorship deals with Dior, Versace, and Max Factor are rumored to be worth $150 million. The beauty—once nicknamed Olive Oyl by her classmates—is credited for "the return of the sexy model" by Vanity Fair. She says of new hubby Tom: "He’s got a pure heart...The moment I saw him, he smiled and I was like, That is the most beautiful, charismatic smile I’ve ever seen!" Bündchen was discovered in a Sao Paulo amusement park: "I was eating at a food court in the shopping mall, and this guy from Elite came and said, ‘You should be a model.’ It was the first time in my life that someone thought I looked pretty." Finally, she remains grounded by dabbling in Buddhism, "Enjoy the journey, not the destination. I want to be happy every day. I want to live life to the fullest."

GM CEO Rick Wagoner is off the wagon. According to The Washington Post, the Obama administration pushed out Wagoner yesterday and told Chrysler that it must form a partnership with the Italian automaker Fiat within 30 days in order to receive more government aid. President Obama has concluded that GM can survive if it cuts costs sharply. It will have 60 days to present a new plan, while Chrysler’s future aid will be contingent on its merger with Fiat. Obama plans to announce the details of the package today, and bankruptcy could still be an option for both companies.