If you can’t trust hedge-fund managers, who can you trust? Six high-level figures in the business and finance worlds were arrested and charged on Friday with what authorities are describing as the biggest insider-trading ring in a generation. Sri Lankan native Raj Rajaratnam, founder of the New York-based Galleon Group, is accused of being the ringleader of a group that included IBM and Intel executives and profited by as much as $20 million in improper gains. The group’s information network spread far enough that Rajaratnam and his associates could gain inside information on companies like Google, Sun Microsystems, and Hilton Hotels—off of whom Galleon Technology Funds made $4 million after Blackstone took the hotel chain private. The criminal complaint relies heavily on phone wiretaps—some recorded by a cooperating witness, as yet unnamed, who is said to be a former Galleon employee—which show Rajaratnam and his alleged accomplices operating under a high degree of secrecy: “I’m dead if this leaks,” says co-defendant Danielle Chiesi in one recording, “and my career is over. I’ll be like Martha f—ing Stewart.”

The Senate Finance Committee's successful health-care vote has put a swagger in the step of chair Max Baucus. The senator from Montana is now predicting unanimous Democratic support for a final bill. "Every Democrat will vote for national health-care reform," Baucus told the Associated Press, adding that he expected "at least one Republican and maybe a couple more who also will vote for it." A united Democratic front could be difficult, despite Baucus' bold prediction, thanks to a dispute over a public insurance option and other issues. As for GOP votes, so far only Sen. Olympia Snowe (R-ME) has crossed party lines to support a bill.

President Obama addressed Texas A&M University with a speech calling on young people to volunteer, but the  several hundred protestors who gathered hours before the speech on campus—many of them bussed in by Tea Party activists from around the state—threatened to steal the show. The A&M campus had been less than friendly in the past: last fall the school's Young Conservatives held an anti-Obama event, in which students threw eggs at a photo of the president. Former President George H. W. Bush, who introduced Obama, wrote to students asking them to display a “decent and welcoming Aggie spirit.” Bush also said that attacks on the current president " crossed the line of civility." The crowd was respectful during Obama's speech.

The federal deficit was $1.4 trillion for the 2009 fiscal year, making it the largest relative to the size of the economy—nearly 10 percent—in more than 60 years. The damage was nearly $1 trillion more than in fiscal 2008, when it was $459 billion. Economists believe that annual deficits should not top 3 percent of gross domestic product, a mark President Obama has promised to hit by the end of his first term. Though somewhat lower than predicted earlier this year, the deficit number shows the dilemma the Obama administration faces in wanting to push through an ambitious domestic agenda without creating crushing levels of debt. Peter Orszag, director of the Office of Management and Budget, said that for the president’s next budget, “we are considering proposals to put our country back on firm fiscal footing.” But both the administration and Congress are in early discussions about extending tax cuts and spending measures from last winter’s $787 billion stimulus plan.

The Obama administration says they are frustrated with the banking industry's attempts to fight off President Barack Obama's plan to overhaul the financial regulatory system after taxpayer bailouts helped the banks restore record profits last quarter. JPMorgan Chase and Goldman Sachs, which have paid back their government loans, reported huge surges in earnings this week, and are expected to hand out record compensation to their employees. The White House says the industry is in good health because of taxpayer assistance, and lobbying against Obama's regulations goes against the long-term interest of the country. “We are disappointed by the lobbying of anyone in the financial industry against regulatory reform, considering the obvious need for change on that front,” said Valerie Jarrett, a senior adviser to Obama. Some banks are offering up record compensation and bonuses during a time when the unemployment rate rose to almost 10 percent—a disconnect that the White House is using to launch a counteroffensive against Wall Street. Obama is renewing his push to have financial regulations in place by the end of this year, even though his proposals are facing stiff industry opposition.

Delays in production mean that only about three-quarters as many swine flu vaccines as expected will be available this month. In a Friday news conference, CDC immunization official Anne Schuchat said that 28 million to 30 million vaccines at most will be shipped, instead of the 40 million expected. The reason? Schuchat said there's been a slowdown in the production of antigen, a critical element of the virus, which is tougher to grow for H1N1 than for seasonal flu. "We aren't expecting widespread availability until the end of the month or until November," Schuchat said. "It will be pretty challenging to find vaccine." The delay in vaccine production comes at a bad time—the WHO warned on Friday that the H1N1 strain, which reaches further into the lungs than the seasonal flu, can cause severe viral pneumonia and encouraged doctors to treat the flu with antiviral drugs as early as possible. Swine flu outbreaks have been reported in 41 states, up from last week’s tally of 37, and the virus has claimed the lives of at least 86 Americans under 18. “These are very sobering statistics,” said Schuchat.

With a new book on the market and no political work to attend to, what’s an unemployed Sarah Palin to do? Shill, baby, shill. The former governor has penned an op-ed for the upcoming issue of The National Review on one of her pet issues: drilling. Palin argues in the piece for the environmental and economic benefits of domestic oil production, using Alaska-centric statistics to make the case for drilling in “the Lower 48,” along with the development of new refineries. “Electric cars might work in Los Angeles, but they don’t work in Alaska, where you can drive hundreds of miles without seeing many people, let alone many electrical sockets,” she writes, adding that foreign developers of oil have environmental standards that make U.S. policy look squeaky clean by comparison. “In effect, American environmentalists are preventing responsible development here at home while supporting irresponsible development overseas,” writes Palin, concluding, “We need to drill here and drill now.”

With a ground invasion imminent, Pakistan is waging an air and artillery battle against Taliban forces in its country, but the enemy is wreaking plenty of havoc of its own. A suicide bomber detonated himself in Peshawar on Friday, killing 12 people. The bombing was only the most recent in a wave of attacks that have killed about 150 people in the past 11 days and included a shockingly brazen assault on the army's headquarters. The attack on Friday targeted a staging post for American supplies in Afghanistan, Reuters reports.

It just isn’t Lindsay’s month—but then again, what was the last good month La Lohan had? After last week’s disastrously reviewed fashion show in Paris—replete with nipple-tassled models—the troubled starlet arrived at a Friday probation hearing an hour late. The mood didn’t improve from there: Judge Marsha N. Revel did what fashion critics wished they could have done last week and extended her three-year probation (originally handed down in 2007) by another year, citing Lohan’s truancy from her alcohol-education classes. “I don’t want to get any more notices again, no warrants… where you’re thumbing your nose at the court,” said Revel to a largely mute Lohan. The Mean Girls star is due back in court for a progress hearing on December 15.

Merck’s Gardasil vaccine, which protects inoculated subjects from the human papillomavirus, or genital warts, was approved for use in males by the FDA today, three years after its approval for use in females, though it’s unclear whether or not the CDC will recommend it to be routinely applied among boys. Unlike women, who have a higher risk for cervical cancer if they get HPV, men are at no direct, life-threatening risk from the disease, and only about 1 percent of sexually active U.S. males contract it. Even so, some have argued that vaccinating boys would help prevent the disease’s spread, thereby helping prevent cervical cancer in women. Merck would stand to add as much as $20 million in sales, thanks to use among men: A Harvard study found that vaccinating boys wasn’t cost-effective, but another study sponsored by Merck contradicted those findings. Controversy over the drug remains, in part because of the pharmaceutical company’s aggressive lobbying on its behalf. The CDC is expected to debate the matter next week.

Forget the 9/11 truthers and the Obama "birthers"—the granddaddy of American conspiracy theories, the Kennedy assassination, lives on, thanks in part to a secretive CIA, which still refuses to release hundreds of documents pertaining to an agency-funded anti-Castro group known to have quarreled with Kennedy’s assassin Lee Harvey Oswald. These particular files, being pursued by journalist Jefferson Morley, relate to CIA agent George Joannides, who was responsible for the anti-Castro group in 1963—and was 15 years later made liaison to the House Select Committee on Assassination. Morley’s work to bring the files to light has earned support from well-known individuals like John Tunheim, former chairman of the Assassination Records Review Board, not to mention conspiracy skeptics like The Daily Beast’s Gerald Posner, who calls the agency’s reluctance to release the documents “a perfect example of why no one trusts the agency.” But maybe there’s reason not to: Joannides’s activities as case agent for the anti-Castro group that Oswald had attempted to infiltrate were never made known to members of the House Select Committee he liaised with. But, “if there really were a CIA plot, no documents would exist,” Posner says.

Another Goldman alumnus joined the public sector on Friday as Goldman Sachs Business Intelligence Group Vice President Adam Storch was named the first chief operating officer of the enforcement division of the SEC. Storch’s responsibilities will include the enforcement division’s project management and operations, as well as the supervision of the Office of Market Intelligence, which collects hundreds of thousands of tips for the SEC. He’ll report to the SEC enforcement director, former federal prosecutor Robert Khuzami, who said that Storch, with strong a background in technology systems and project management, will help the SEC—recently criticized heavily for letting Bernie Madoff’s Ponzi scheme continue for 20 years—become “more efficient and nimble.” Before his time at Goldman, Storch, a CPA, was a senior consultant at accounting firm Deloitte & Touche.

All that noise about Hillary Clinton’s silence at the State Department is missing the true story, John Heilemann writes in next week’s New York magazine. We’re hearing little from Clinton not because she is impotent but because she is playing the same inside game she played when she joined the Senate as its most famous freshman member, according to Heilemann. The low profile is a bid to earn the president’s trust after a fractious campaign. If the president decides to split the difference on Afghanistan—escalating troops but not committing to a full-blown surge—we’ll have seen Hillary’s soft power at work, Heilemann writes.

TMZ has obtained the 911 call placed by the parents of Falcon Heene, who was thought to have been carried away in a homemade helium balloon on Thursday. His mother, Mayumi Heene, can be heard sobbing to the 911 dispatcher, who ascertains that there was an "experimental flying saucer." Richard Heene, the boy's father, later gets on the phone to confirm that they've looked everywhere for their son and are sure that he is in the balloon. He expresses concern about possible electrocution, as the balloon—which was covered in tin foil—supposedly emits one million volts every five minutes. Both mother and father intermittently disappear from the phone call at various points.

Despite the recent gains posted by Goldman Sachs, JP Morgan, and Citigroup, sunshine and $3 million bonuses are not bestowed on every one of America's big banks. Bank of America Corp. has just posted a loss of $1 billion in the third quarter of this year, including $2.6 billion in write downs from rebounding credit spreads, and despite the fact that the bank's acquisition of Merrill Lynch sent its revenue soaring by a third. Unemployment, which hit 9.8 percent last month, likely affected the company, which has a gigantic portfolio of credit card loans, although Chief Executive Ken Lewis said delinquencies among credit-card customers were leveling off. Lewis, a target of government probes into the bank, will be gone from the company in less than three months, but without any of his 2009 salary thanks to the U.S. Treasury's pay czar's decision on Thursday.

The United Nations Human Rights Council voted Friday to endorse the Goldstone Report, which says that Israelis and Palestinians committed war crimes during the Gaza offensive last winter. The 575-page investigation concluded that Palestinian armed groups intentionally spread terror through years of rocket attacks on southern Israel, and that Israel used disproportionate force and targeted civilians. (Almost 1,400 Palestinians and 13 Israelis were killed during the Dec. 27-Jan. 18 conflict.) Although Hamas and the Palestinian government endorsed the report, American and Israeli representatives called it "one-sided" and "flawed," citing Israel's right to defend itself. The HRC's endorsement of the report sets up a potential international prosecution at the International Criminal Court, though the U.S. is likely to use its veto power to block it. Representatives from the two countries said that the resolution could interfere with the Middle East peace process. "We're focused on moving forward in the peace process and we feel that this is a distraction from that," an American diplomat said.

Irish filmmaker Phelim McAleer has a new movie out challenging Al Gore’s An Inconvenient Truth, and he’s reaching out to Tea Party protesters to drum up an audience for the picture. McAleer’s takedown of global warming, Not Evil Just Wrong, got the cold shoulder from Hollywood executives (he blames politics) and is instead hosted by Big Hollywood, a site run by former Drudge Report editor Andrew Breitbart. In anticipation of a conservative base, McAleer called up a weekly conference call for California’s Tea Party Patriots to talk up the film, which will now be screened in several locations throughout the Golden State. The director has also resorted to guerrilla-like tactics, turning up at a Society of Environmental Journalists conference last week and intensely questioning Gore until his microphone was taken away. “I am the son of Michael Moore,” says McAleer of his approach, “or at least the illegitimate nephew.”

Kate’s not the only one taking Jon Gosselin to court—TLC is now suing its former reality-TV star for breach of contract, taking Jon to task for appearing on other shows for money and talking publicly about his former gig on Jon and Kate Plus 8. The show was set to continue without him as simply Kate Plus Eight until Jon recently vetoed the plan, citing an “epiphany” that the show would be bad for his kids. Gosselin most recently appeared before a judge for secretly clearing $180,000 out of a joint bank account with his ex, which he was then ordered to return, possibly along with his “World’s Greatest Dad” coffee mug.

After a decade in retirement, former media mogul Ted Turner wants back in on the action, telling an interviewer about his wish to be back at the helm of Time Warner with a focus on news and, of all things, cartoons. “I’d like CNN to report to me, and the Cartoon Network,” he said. Turner founded CNN 29 years ago, and voiced concern over “fluffy” stories on the network and what he sees as a need for “less talk, more news.” He also expressed his desire to move Captain Planet into a plum time slot on the Cartoon Network to expose kids to “the environmental superhero instead of just Superman.” Later in the interview, Turner talked shop, and though he claimed to have patched things up with former rival Rupert Murdoch, he took a jab at Murdoch’s cherished medium of choice, print journalism: "You're chopping all these trees down and making paper out of them and trying to deal with all the waste paper. It's the biggest solid-waste problem that we have."

Though it didn’t elicit boos from the audience, like the Met’s opening night, Bye Bye Birdie has debuted with less-than-enthusiastic reviews. The musical, inspired by Elvis Presley’s induction into the Army, opened last night on Broadway, and critics are already bemoaning its return. Delayed by technical issues, the show was preceded by a few impromptu jokes from lead John Stamos’ former Full House co-star, Bob Saget, and Don Rickles. Unfortunately, that was the highlight of the evening. Frank Sheck of the Hollywood Reporter called it “a misdirected, miscast, sluggish mishmash of a normally effervescent musical.” Stamos’ performance was “bland,” and Gina Gershon’s “uninspired.” The musical was a hit when it first premiered 1961, even receiving a Tony Award for Best Musical. But this time around a repeat of its success looks unlikely.

Afghanistan presidential election: take two. Western and Afghan officials are suggesting that a runoff is likely in Afghanistan's disputed presidential race after widespread allegations of fraud wrecked the first vote's legitimacy, the Wall Street Journal reports. The news is a mixed bag for the White House: On the one hand, a new election could bolster the government in Kabul if it's perceived as fairer than the previous one, which many saw as rigged in favor of incumbent Hamid Karzai. On the other hand, it could make it difficult to come to a decision on whether to bolster the American troop presence in Afghanistan until the vote's outcome becomes clear. According to the Journal, results might not come until January, making the delay a significant problem.

As the Army boasts about surpassing recruitment goals this year, Slate’s Fred Kaplan said not to look at unemployment numbers or a jump in patriotism, but to the Army’s goals themselves. The Army actually recruited fewer people than last year; it just lowered its sights, Kaplan wrote Friday. While the Army recruited 70,045 men and women this year—besting its goal of 65,000—its recruitment goal the last two years was 80,000. “Something odd is going on, and the powers that be in the Pentagon and Congress might want to start asking questions,” Kaplan wrote.

At 22 inches tall, Nepali teenager Khagendra Thapa Magar has a few big hopes: getting into the Guinness Book of World Records, traveling the world, and marrying a woman of similar stature. Magar told The Times of London, “God is great. He made me small in size but has now given me big name. What else could I have asked for,” He added, “I keep on telling my father to find me a small wife,” he said. “Now it’s up to him to find a right match. I would love to have children but have not yet decided about the numbers.” Magar submitted his application to the Guinness Book of World Records to be named the world's shortest man, a title currently held by 28.7-inch man He Pingping of China.

As the White House works frantically on a diverse set of policy goals, liberal activists say one critical element of Obama’s agenda has slipped through the cracks: judicial confirmations for appellate and district courts. Only three of the president’s 23 nominations for federal judgeships have been confirmed. Some say Obama’s attempts to ease partisan tensions have only emboldened Senate Republicans: The Washington Post reports that anonymous holds and filibuster threats from the GOP have have “slowed the proceedings to a crawl.” Republicans, however, say the president isn’t carrying his share of the judiciary burden. In the same period that Obama has named 23 nominees, President George W. Bush forwarded 95. Caseloads are beginning to clog the federal judicial system, with 10 percent of judicial seats remaining vacant in appeals and district courts. An Obama spokesman said the White House hopes to pick up the pace soon.

Do earthquakes have seasons like hurricanes? Another strong earthquake has rattled Indonesia's capital. The quake had a preliminary magnitude of 6.4, a depth of 35 miles, and an epicenter some 180 miles southwest of Jakarta, the country's capital. Fortunately, according to a Meteorology and Geophysics Agency official, the earthquake wasn't strong enough to cause a tsunami. Earlier this month, a bigger quake left more than 1,000 people dead in western Sumatra.

An interracial couple was denied a marriage license by a Louisiana justice of the peace, Keith Bardwell, who said he turned them down out of concern for their potential children. Bardwell said he wasn’t racist and had done ceremonies for black couples in his house; he explained that his decision to deny a license to Beth Humphrey, 30, and Terence McKay, 32, of Hammond, Louisiana, was based on his personal observation that neither white nor black families are accepting of interracial kids. He also thinks interracial marriages don’t last. The ACLU is preparing a letter to the Louisiana Supreme Court seeking to get Bardwell removed, because “He knew he was breaking the law, but continued to do it,” an attorney for the group said. But Bardwell says he’s just putting the kids first: “I don’t do interracial marriages because I don’t want to put children in a situation they didn’t bring on themselves,” Bardwell says, adding that if he did one interracial marriage, he’d have to do them all. “I try to treat everyone equally.”

They tried to make Anna Nicole Smith go to rehab, but her boyfriend said "No, no no." Before her death, Smith's boyfriend, Howard K. Stern, dismissed a physician's suggestion of drug rehab for Smith, saying it "would kill her," according to the testimony of the late model's one-time bodyguard on Thursday during a preliminary hearing to determine whether there is enough evidence to try Stern and two doctors for illegally giving sedatives, opiates, and other drugs to Smith. The bodyguard also said that he and Dr. Khristine Eroshevich, one of the doctors charged, often talked about their concerns with Smith's burgeoning drug addiction, and that Eroshevich, who was prescribing drugs to Smith, would throw out pills while the model wasn't looking. The prosecution was barred from asking the bodyguard about an alleged sexual relationship between Smith and Eroshevich because the judge didn't want "to turn this into a circus sideshow."

Conservative Tea Party activists are energizing the Republican Party, but all that enthusiasm comes with a price: They may be scaring away the moderates that would help the GOP retake the House in 2010. With a shaky economy, a controversial health-care plan, and uncertainty in Afghanistan, the Republicans should have a good chance to win back seats from Democrats. But some of the candidates the party thinks have the best shot at winning seats back from the Dems are deeply unpopular with teabaggers. GOP leaders were thrilled Florida Governor Charlie Crist agreed to run for the Senate, but he’s reviled by conservative activists for supporting President Obama’s stimulus package. And in the only congressional race this November, a pro-choice Republican candidate hoping to hold a GOP seat in upstate New York is being challenged by a Tea Party favorite, who has siphoned off enough support from his moderate rival that a Democrat is now in the lead. "It's healthy to have debates about the future direction of the party," says a spokesman for the GOP senatorial campaign committee. But, he adds, "We want to make sure we have candidates on the ballot in the best position to defeat the Democrat candidate."

Will they drink it from micro-cups? Microblog service Twitter is making a foray into viticulture with a wine label: Fledgling Wines. A joint project with San Francisco DIY winery Crushpad and nonprofit literacy organization Room to Read, proceeds from Twitter’s two wines—a Pinot Noir and a Chardonnay—will go toward promoting child literacy in the developing world. SF Weekly reports that, “true to the open nature of its own product, Twitter is not creating the wines all on its own: It’s encouraging you to participate in the process” with “virtual” barrel tasting and a possible label-design contest. Crushpad is a company that provides means for amateur oenophiles to make and sell their own wine. Like Twitter, it’s one of the Bay area’s promising young startups, having raised $9 million in funding since 2004, mostly from its customers.

Meet Nathan Halbach, a 22-year-old battling brain cancer whom his mother says is being nickel-and-dimed by his biological father, Franciscan priest Henry Willenborg, and by the Catholic Church. While on a retreat to save her failing first marriage 26 years ago, mother Pat Bond fell in love with Father Willenborg, and the two had a sexual relationship that resulted in Nathan and lasted five years, until an enraged young woman showed up at Bond's house claiming that Father Willenborg had been her lover since she was in high school. Priests who missed out on celibacy class are evidently more common that one might think. According to a 1990 study by scholar A.W. Richard Sipe, a former Benedictine, 20 percent of Catholic priests had continuing sexual relationships with women, while 8 to 10 percent had occasional heterosexual relationships. According to Father Willenborg's deposition, the church never disciplined him or suggested he leave the priesthood.

America wasted two hours of its collective life Thursday following live coverage of a helium balloon said to contain a frightened six-year-old. Now they're demanding answers as to whether it was all a hoax after the boy in question, Falcon Heene, was found hiding in his home the whole time. In a CNN interview on Thursday, Falcon answered a question as to why he didn't reveal himself to his parents even though they were searching the house with authorities by saying to his father: "You had said we did this for a show." Pressed as to whether the child had let the cat out of the bag on a publicity stunt, Falcon's father Richard Heene denied the claim. "I'm kind of appalled after all the feelings that I went through, up and down, that you guys are trying to suggest something else," he said. Local authorities also say they do not believe the story was a hoax, but the press has fixated on the family's history of reality show and YouTube appearances as evidence of a possible motive.