Bernard Madoff strolls down New York's Lexington Avenue after news of the scandal breaks.

Geneen Roth
Salon.com

I was standing in my kitchen wondering what to have for lunch when my friend Taj called.

“Sit down,” she said.

I thought she was going to tell me she had just gotten the haircut from hell. I laughed and said, “It can’t be that bad.”

But it was. Before the phone call I had 30 years of retirement savings in a “safe” fund with a brilliant financial guru. When I put down the phone, my savings were gone and my genius financial guru, Bernie Madoff, was in handcuffs. I felt as if I had died and, for some unknown reason, was still breathing.

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Andrew Torgan
CNN Financial News Producer

President-elect Barack Obama is inheriting the worst economy in decades and says he’ll need to “invest an extraordinary amount of money” to get it back on track. “At the current course and speed, a trillion-dollar deficit will be here before we even start the next budget,” Obama said Tuesday. “And potentially we’ve got trillion-dollar deficits for years to come, even with the economic recovery that we are working on at this point.” Today, the Congressional Budget Office releases its 2009 budget and economic outlook, which will layout the deficit details in black and white.

Harsh words from the Fed… the economy is likely to deteriorate further this year and unemployment will rise into 2010. That’s the bleak forecast that was presented to Fed policymakers when they met last month and lowered interest rates to near zero. Minutes from that meeting released Tuesday show that Ben Bernanke and Co. are now predicting that GDP, the broadest measure of economic activity, will fall in 2009.

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Bernard Madoff mailed valuable jewels from his home, prosecutors charge. CNN’s Allan Chernoff reports.

President-elect Barack Obama talks with Rep. John Boehner and House Speaker Nancy Pelosi on Monday.

Andrew Torgan
CNN Financial News Producer

Are you sitting down? Good. It’s time to tally up the government’s bailout tab. Congress, the Treasury Department, the Federal Reserve and other agencies have taken dozens of steps and spent billions of dollars to prop up the economy — including shelling out $29 billion for Bear Stearns, $345 billion for Citigroup and putting up $600 billion to guarantee money market deposits. Total price tag so far: $7.2 trillion. Now comes President-elect Barack Obama’s economic stimulus plan, some details of which were made public on Monday, and the bill is getting awfully close to $8 trillion. Take a look at this bailout scorecard to see the tally.

Stocks on Wall Street opened higher ahead of a trio of economic reports. The number of homes under contract to be sold fell 4% in November as mounting job losses and weak consumer confidence deterred home buyers from signing contracts. Factory orders, meanwhile, declined for record fourth straight month in November as the recession intensified. The one bright spot — however dim — was the service sector, which improved somewhat in December but remained weak amid the ongoing recession. The service sector includes jobs in industries such as hotels, retail and health care.

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Allan Sloan
Fortune

Yes, there really are times when life imitates art. A case in point: the Bernie Madoff scandal, in which the disgraced investor bears a startling resemblance to Zero Mostel’s sleazy theater promoter in one of my favorite flicks, “The Producers.”

What do the real-life Madoff and Mostel’s fictional Max Bialystock have in common? They used the same principles to pull off a big-time financial fraud. These are: If you’re going to steal, steal big. If you’re going to cook the books, make up numbers of your own - don’t try to doctor the real ones. And, finally, if you’re going to fleece people, turn down enough potential investors so that those whose money you take feel so honored that they don’t do basic homework to find out about you.

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Apple CEO and co-founder Steve Jobs speaks at last year's Macworld Expo in San Francisco, California.

Andrew Torgan
CNN Financial News Producer

President-elect Barack Obama today begins his push for a massive package of tax cuts and spending proposals aimed at reviving the economy. He’ll meet this afternoon with top legislators from both parties, including House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, as well as Senate Minority Leader Mitch McConnell, and House Minority Leader John Boehner. His plan will include about $300 billion in tax cuts for individuals and businesses, an aide to the transition told CNN. Obama has not put a price tag on his overall stimulus plan, though his advisers have said they expect it to fall between $675 billion and $775 billion, 40% of which would be in tax cuts.

The good news for the auto industry arrived in last month when General Motors and Chrysler got their government bailout. The bad news arrives today, when Detroit’s Big Three are expected to report another month of staggering sales declines. Many analysts are predicting the industry to report that U.S. sales dropped about 40 percent last month, bringing an official close to what has been one of the industry’s most trying years.

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Andrew Torgan
CNN Financial News Producer

Wall Street officially welcomed 2009 today with a big rally, and investors are hoping it will be a heck of a lot better than 2008. Traders are looking for a fresh start after one of the worst years in Wall Street’s history. Last year, the Dow Jones Industrial Average fell 34%, the S&P 500 lost 39% and the Nasdaq slid 41%.

A key index of the nation’s manufacturing activity fell to a 28-year low in December. The Institute for Supply Management said its manufacturing index was 32.4 for December. That’s the lowest reading since June 1980, when it stood at 30.3. Economists say a reading this low indicates a deep recession.

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Brianna Keilar | Bio
CNN Congressional Correspondent

President-elect Obama will meet with House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid Monday to discuss his proposal for the new economic stimulus plan, which leaders are now referring to as an “economy recovery plan”, a Senate Democratic leadership aide said Friday. Obama, Pelosi and Reid are then hoping to meet with Senate Minority Leader Mitch McConnell and House Minority Leader John Boehner, the aide told CNN.

The President-elect’s staff contacted McConnell’s office about meeting on Monday but the time and location has not been buttoned down, said a Senate Republican leadership aide. “It’s likely to happen but the details still need to be worked out,” said the aide. Asked if Republicans are satisfied with what appears to be an effort by Obama to include them in discussions about the new economic stimulus package the GOP aide said, ” It depends on what the meeting is — if it’s just a photo opp or if they’re really reaching out.”

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James Doran
The Guardian

The US government has seized control of Citigroup’s staff Christmas party budget and set tight restrictions on the use of its corporate jet in exchange for its $45bn (£28bn) bail-out.

The measures are among a raft of restrictions on expenses detailed in the small print of filing made by Citi on New Year’s Eve with the US financial regulator, the Securities and Exchange Commission.

The filing was made to formalise restrictions on executive pay and bonuses that Citi’s chief executive, Vikram Pandit, was forced to adopt in exchange for the US government bail-out, which includes guarantees on $306bn of troubled assets on top of $45bn of loans.

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Ben Stein tells Anderson Cooper that if you can afford it, now is the time to shop.