Barack Obama nominated Ben Bernanke for another four-year term as chairman of the Federal Reserve Tuesday morning. Rahm Emanuel, the president’s chief of staff, said that President Obama credits Bernanke for “pulling the economy back from the brink of depression." Bernanke, who was originally nominated for the position by George W. Bush, took office February 1, 2006, and his current term ends in January. Obama made the official announcement Tuesday from Martha’s Vineyard with Bernanke at his side. Bernanke’s reappointment will require Senate confirmation.

The big news of the day: Attorney General Eric Holder will appoint a special prosecutor to investigate nearly a dozen cases in which CIA interrogators and contractors may have violated torture laws. Holder will appoint John Durham, a veteran Justice Department prosecutor from Connecticut, to head the inquiry. Durham will launch a full-scale criminal investigation into whether former and current CIA employees broke the law when interrogating suspects, and will work independently from the White House. The White House is also creating a separate detainee-interrogation unit which will be closely supervised, the Associated Press reports, though the CIA will still be questioning terror suspects. The news comes on the heels of a declassified CIA document that describes interrogators threatening to kill the children of a terror suspect.

L.A. County Coroner’s officials found "lethal levels" of the anesthetic propofol when they examined Michael Jackson's body, according to a search warrant just unsealed today, and have declared the death a homicide. Jackson's doctor, Conrad Murray, was treating the pop star for insomnia with the drug, the search warrant said, and gave him 25 mg of propofol on the day he died after Jackson repeatedly demanded it. Murray said he then left to make phone calls and returned to find Jackson not breathing. Investigators are focusing on whether Murray's use of propofol—a drug typically reserved for surgeries—as a sleeping aid was negligent enough to merit an involuntary manslaughter charge. The fact that the death is now ruled a homicide makes it more likely Murray will face charges.

The justice secretary in Scotland who released convicted Lockerbie bomber Abdel Basset Ali al-Megrahi on compassionate grounds says the man broke a promise not to celebrate his homecoming. Kenny MacAskill defended his decision to free al-Megrahi, but said the bomber showed "no sensitivity" to the families of his victims. He called the celebration that greeted the bomber, which included some Scottish flags waving, “a matter of great regret,” and said he had been promised the felon's return would be "low-key." Prime Minister Gordon Brown is expected to urge Libya on Tuesday to cease their celebrations. The Libyan government defended its actions, insisting that the celebration “is something that can’t be understood by people in the West.” Libyan officials have bragged that al-Megrahi would be the “main guest” at a celebration on Tuesday marking the 40th anniversary of Colonel Muammar Gaddafi’s seizure of power.

The practice of sending suspected terrorists overseas for detention and interrogation, which drew criticism during the Bush administration, will continue during Barack Obama’s tenure in office, The New York Times reports. Obama is instituting a new interrogation unit, positioned within the Federal Bureau of Investigation and known as the High-Value Interrogation Group, to oversee questioning of terror suspects. This move takes power away from the Central Intelligence Agency, which has been criticized for its harsh interrogation methods like those detailed in a report declassified Monday. An administration official said that the power granted to the State Department will increase: “the emphasis will be on insuring that individuals will not face torture if they are sent over overseas.” Human-rights groups, however, criticized the decision. “It is extremely disappointing that the Obama administration is continuing the Bush administration practice of relying on diplomatic assurances, which have been proven completely ineffective in preventing torture,” said Amrit Singh of the American Civil Liberties Union.

Here’s something for the new torture prosecutor to look into: The Associated Press is reporting that, according to the CIA report declassified on Monday, interrogators threatened to harm the families of the suspects they interrogated. One interrogator allegedly told Khalid Sheikh Mohammed that if the United States was attacked again, “We’re going to kill your children.” Another allegedly told a suspect that he was going to sexually assault his mother in front of him. The report was written in 2004 and is being declassified now as part of a lawsuit brought by the ACLU. More than 20 pages suspected of dealing with waterboarding were blacked out on the report.

It could be a while before things get better. At least that’s what Nouriel Roubini, the NYU Stern School of Business professor who is credited with predicting the current financial crisis, writes in the Financial Times. Roubini says there is a “big risk of a double-dip recession,” a W-shaped figure of recovery and relapse. “If [policy-makers] take large fiscal deficits seriously and raise taxes, cut spending and mop up excess liquidity soon, they would undermine recovery and tip the economy back into stag-deflation (recession and deflation).” Another risk is the rising price of energy and food—the global economy would be shaken if oil again rocketed toward $100 a barrel, he writes. Roubini predicts that, even if the double-dip recession can be avoided, the path back to a stable economy will actually be “anemic and below trend for at least a couple of years...a weak U-shaped recovery.”

Sen. Charles Schumer (D-NY) signaled Sunday that he is ready to give up on a bipartisan health-care plan, and that Obama is also considering “alternatives” to a Republican-approved reform bill. On NBC's Meet the Press, Schumer said Obama and Democratic leaders are "bending over backward" to create a bipartisan bill, but might have to resort to a "reconciliation" process to pass reforms if Republicans don't come around. The bill, which Schumer said would most likely include the public-health-care option declared essential by many Democrats, could be passed with only 51 votes in the Senate through budget reconciliation. 

Goldman Sachs has been providing its top clients with stock tips that differ from the firm's published reports, reports The Wall Street Journal. Official analyses from the firm frequently rate a stock as neutral, while Goldman's top 50 clients are privately informed that the stock is actually likely to go up in value. The exclusive and profitable information emanates from the "trading huddle," a weekly meeting of the researchers in which the analysts discuss their latest views of individual stocks. A Goldman Sachs spokesman said, "Analysts are expected to discuss events that may have a near-term or short-term impact on a stock's price." He further said that earnings estimates or stock-price targets "must be published and disseminated broadly to all clients."

Bernard Madoff is not, apparently, preparing to meet his maker. A spokesperson for the U.S. Bureau of Prisons has told The Huffington Post that Monday morning’s report in the New York Post that Madoff is dying from cancer is false. "While the New York Post story is full of inaccuracies, and we can't specifically address all of them, we can tell you that Bernie Madoff is not terminally ill, and has not been diagnosed with cancer,” she said.

The Pentagon has asked a public-relations firm to read and rate stories written by journalists requesting embedded positions with troops in Afghanistan on the basis of the stories’ positivity. Rendon Group “examines individual reporters’ recent work and determines whether the coverage was ‘positive,’ ‘negative,’ or ‘neutral’ compared to mission objectives,” a company official told Stars and Stripes, a military newspaper. The military defends the practice as a way for commanders on the ground to familiarize themselves with the work of the journalists joining their forces, and say no one has been denied access because of his or her rating. But journalism advocacy groups argue the practice is fundamentally flawed. “It speaks to this whole issue of trying to shape the message and that’s not something the military should be involved with,” said Ron Martz, president of the Military Reporters and Editors association.

Though the hunt for reality-TV star Ryan Jenkins ended when his body was discovered hanging in a British Columbia motel Sunday night, detectives are now looking into whether or not the murder suspect acted alone in disposing his ex-wife's body. A young woman allegedly checked Jenkins, a former contestant on the now-cancelled VH1 reality series Megan Wants a Millionaire, into the Thunderbird Motel in Hope, BC and paid in cash for a three-night stay. Now officials wonder if Jenkins had any assistance after he murdered his ex-wife, model Jasmine Fiore, in his escape from Los Angeles to his native Canada, where he fled on Wednesday night. It's also possible that Jenkins had additional accomplices in his efforts to dispose of the Fiore's body, which was found over a week ago in a suitcase a Buena Park trash can. Lieutenant Steve Holliday was asked whether Jenkins got help in Fiore's alleged murder at a news conference last night, to which he only replied: "I do believe he participated in the murder."

Hurricane season, meet wildfire season. Tens of thousands of residents of Athens' suburbs were evacuated as one fire moved forward across a 31-mile wide area, the Associated Press reports, while another large fire swept down a mountain toward the town of Marathon on Sunday, threatening two ancient temples. More than 90 wildfires have ignited in Greece since Saturday, and they won't be doused anytime soon, as firefighters and equipment are in short supply. The mayor of Marathon said he'd been "begging the government to send over planes and helicopters." France, Cyprus, and Austria are sending spare equipment. Communist Party leader Aleka Papariga and Giorgos Karatzaferis, the head of the populist right-wing Popular Orthodox Rally, both said the government didn't learn from the fires of August 2007, when 70 people died and several villages were obliterated.

It's a good time to work for Apple. The company has beaten the recession thanks to the iPhone, Bloomberg reports, despite the fact that at $99 to $299, the gadget isn't exactly recession-friendly. During the first six months of this year, Apple stores posted a 2.5 increase in revenue compared with an overall sales drop of 9.2 percent for American retailers. One real-estate broker estimates that the Fifth Avenue Apple store has annual sales of $350 million—about $35,000 per square foot—and an expert at Prudential Douglas Elliman Real Estate in Manhattan suggests that Apple might be the highest grossing Fifth Avenue retailer ever.

It couldn't have come at a worse time. Just as news stories of Italian Prime Minister Silvio Berlusconi's lascivious parties were beginning to wind down, his estranged wife, Veronica Lario, has broken her silence with interviews that will be published in an updated version of her biography, Tendenza Veronica. The Guardian reports that Lario decided to divorce Berlusconi after her husband neglected to mention that while in Naples for a conference on refuse control, he also attended the 18th birthday party of model Noemi Letizia. Lario said that Berlusconi was becoming a "ridiculous figure before the world" thanks to the sex scandal plaguing him. To people who think she should have divorced him earlier, Lario said, "This will be a catch-up divorce," adding, "I cannot condemn myself to being his nanny." The saddest thing about the whole affair, Lario said, is that Berlusconi "betrayed himself," because "today the things they say about him make you forget what he truly was."

In his last novel, Jonathan Lethem fled New York City, the site of his best work like The Fortress of Solitude and Motherless Brooklyn, for far-away California. For his upcoming book, due out in October, Lethem returns to the nest, locating the entire work on the Upper East Side. Lethem tells New York magazine that Woody Allen, who made his bones obsessively chronicling the lives of those who lived in this tony enclave, was much on his mind. The book’s working title was Manhattan. However, Lethem said he did look across the park for inspiration as well, calling Chronic City, “the darkest Seinfeld episode ever.” But these geographic confines do not limit the writer’s imagination. The book takes an apocalyptic turn: Snow falls in July, fog envelops entire city neighborhoods. Lethem’s certainly setting the bar high. He said of the novel, “It’s the most unprecedented work I’ve ever done.”

Between allegations of fraud in the recent elections and Taliban fighters operating from across the Pakistani border, it's not looking good in Afghanistan. The New York Times reports that, over the weekend, top American brass from the NATO mission to Afghanistan told Obama that they need more troops to do their job. Despite the 17,000 American troops the Obama administration ordered to the area, insurgents in southern Afghanistan continue to rocket villages and towns, and in the east, the father-and-son-led Haqqani network has been plaguing U.S. troops. Admiral Mike Mullen called the situation "serious" and "deteriorating." It's unclear how many additional troops may be required.

Worshippers were greeted with horrible news this Sunday at the Christ Holy Sanctified Church in Anadarko, Oklahoma—a small building 60 miles southwest of Oklahoma City. The body of pastor Carol Daniels was found murdered. The church leader, who was in her mid-50s, drove to the town of 6,600 people to lead services every Sunday. According to the Associated Press, investigators have few leads. People gathered outside the building Sunday where they wept and hugged each other. Said one man who lived next door to the church: “I don't know what to think and I'm trying to think. I mean, who would do this to this woman?"

Is a national security shakeup coming already? Sources tell ABC News that CIA Director Leon Panetta was in a “profanity-laced screaming match” at the White House over the release on Monday of another damning internal investigation. With word circulating that Panetta has already threatened to quit—rumors that the White House and CIA have denied—ABC News writes that “senior White House staff members are already discussing a possible shakeup of top national-security officials.” When asked about Panetta’s alleged tirade, a CIA spokesman said the director is known to use “salty language.” ABC News also reports that replacement candidates have been considered, with one receiving "a series of preparatory briefings."

If an elite team of Nazi killers can’t save the Weinstein brothers, then who can? Despite Inglourious Basterds taking number one at the box office this weekend, The Wall Street Journal reports that the Weinstein Co. is still in financial trouble. It shares ownership of the film with Universal, and so will earn only half its profits. Where did Harvey and Bob go wrong? When they started Weinstein Co. in 2005, the brothers did not simply want to repeat their success at Miramax. Rather than focusing on film, they “invested in Genius Products, a home-entertainment distributor, as well as a social-networking site called A Small World, and a clothing line, Halston.” The success of Basterds, Harvey says, makes the duo want to focus on big, film-maker driven theatrical releases. In June, they hired a firm that helps corporate restructuring of "overleveraged companies.”

The skeletons in the Bush administration’s closets just won’t die: The Justice Department’s ethics office has recommended reopening nearly a dozen prisoner-abuse cases in a move that could potentially expose CIA employees to criminal prosecution. Attorney General Eric Holder reportedly reversed the course set by the Bush administration when he began looking into the allegations, which include the deaths of detainees. Coupled with the release on Monday of a large report about prisoner abuse, The Times writes that “it now seems all but certain that the appointment of a prosecutor or other concrete steps will follow.”

The 7-year-old daughter of a New York investment banker died after a rogue wave kicked up by Hurricane Bill knocked her and her father into the ocean. The girl, Clio Axilrod, was visiting Acadia National Park with her parents, and she and her family were standing near a tourist platform that overlooks the water called Thunder Hole, which had been closed due to rough waves. About 20 people standing on the platform were hit by the wave, and at least three were dragged into the water. A total of 11 people were taken to the hospital, The Portland Press Herald reports. The girl's father is in intensive care in a Bangor hospital. He reportedly doted on Clio, who was adopted from China, and would have dived in to save her if  he hadn't also been dragged in by the monster wave. Hurricane Bill passed 300 miles southeast of the area.

President Obama's had a tough summer, but he's also playing without a full team. Of more than 500 of his top appointee positions that require Senate confirmation, fewer than half have been filled, in part because the White House grew more cautious after disastrous confirmation attempts in the spring. A few of the high-level positions left empty: assistant Treasury secretary for financial markets, inspector general, Army secretary, and the head of the Agency for International Development. Hillary Clinton has expressed frustration at the slow vetting process. “The clearance and vetting process is a nightmare,” Clinton said last month. “And it takes far longer than any of us would want to see. It is frustrating beyond words.” Assembling a new administration is a difficult and slow process for any president. Eight years ago, George W. Bush received the now-famous "Bin Laden Determined to Strike U.S." memo when he still didn't have most of his national-security team in place.

The freedom of the Lockerbie bomber last week has incited public outrage—but no one is sure who to blame. Saif Gadaffi, son of the Libyan leader, lobbied for the release of Abdel Basset Ali al-Megrahi, who is suffering from terminal cancer, and saw to it that he received a “hero’s welcome” when he landed in Tripoli on Thursday. But Gadaffi couldn’t do it alone: He has friends in high places, including a close connection with British Business Secretary Lord Mandelson, with whom he has met twice in the last four months. Though Mandelson’s spokesman denies that he lobbied for al-Megrahi’s release, the secretary has admitted to a string of powerful connections in the past. Despite denials, many people are questioning Lord Mandelson’s role in the release. Mandelson insists that he didn't influence the Scottish justice secretary to free the prisoner. He says that he met with Gaddafi only “fleetingly,” but the two were together at Lord Rothschild’s estate in Corfu just a week before it was announced that al-Megrahi would go free. Lord Mandelson’s spokesman said the secretary hopes to see more of Gaddafi soon. The leader of Britain's Conservative Party, David Cameron, has called for Prime MInister Gordon Brown to take a stand on the issue.

It's not easy being beautiful, unless you're from Venezuela. The Associated Press reports that Miss Universe Dayana Mendoza passed the crown to her fellow country-woman Stefania Fernandez on Sunday night as Miss Venezuela won the title for the second consecutive year. During the competition's question-and-answer segment, Fernandez said that she felt that women "have reached the level that men are at," and said that beauty pageants promote equality by providing exposure. No word on whether Hugo Chavez will receive the beauty—he didn't receive Mendoza after she won the title, but as Fernandez said, "We'll see, because we are making history."

New York City's worst teachers still get paid. According to Steven Brill of The New Yorker, the so-called "Rubber Room," the room that houses teachers with complaints of misconduct or incompetence against them for as long as it takes for a hearing, which can be three years. More than 600 teachers across the city spend their school year inside various Rubber Rooms receiving their normal salaries, accruing pensions, and like their classroom-bound counterparts, taking summers off. The existence of the Rubber Room highlights how difficult it can be to fire low-performing teachers in New York City, and underscores the standoff between the teacher's union and the municipal government. The divide is deep. One Queens principal said of the teacher's union president, she "would protect a dead body in the classroom," while a Rubber Room resident said, "Before [Mayor] Bloomberg and [school chancellor] Klein, everyone knew that an incompetent teacher would realize it and leave on their own."

Ryan Jenkins, the reality TV contestant wanted in the murder of his model wife, has been found dead in a motel in British Columbia, police say. He "took his own life," according to Canadian police, after being on the lam over the weekend. Jenkins was found hanging in the room. His wife Jasmine Fiore's mutilated body was found in a suitcase in a dumpster in Buena Park, California. Her fingers and teeth were removed in order to hinder identification, police said, but the serial number on her breast implants was used to identify her. Jenkins' boat was found in a Washington marina, so police suspected he had crossed over to British Columbia on foot, and was hiding out there. Jenkins pleaded guilty to assault in 2007 in Calgary, and underwent counseling for sex addiction and domestic abuse.

An interrogation unit in the White House that’s not the brainchild of Dick Cheney? The Washington Post reports that, last week, President Obama approved the creation of the High-Value Detainee Interrogation Group—a new interrogation unit of experts culled from several intelligence agencies. The unit will be housed at the FBI and overseen by the National Security Council in what the Post calls a deliberate attempt to shift power away from the CIA and give the White House direct oversight.