1/30 Roundup: Bad Bad Bank, Goodbye Crooked Rod, Goodbye Chip

Leader: One Bank Two Bank, Good Bank Bad Bank

- The Obama economic squad is sorting out how the next big bailout for banks will work.  Details are hazy at best, but it looks as though the government will create a "bad bank" to buy all the bad assets off of the big banks. The government, meanwhile, will also offer guarantees against future losses.  Will it work? Who knows.  These are uncharted waters.

- President Obama took banks to task yesterday for frivolously blowing their cash on year-end bonuses when they should have been, you know, lending, or at least bolstering their balance sheets.

- There's an interesting drama bubbling up between Larry Summers and Tim Geithner. Once allies, it's now not entirely clear who's in charge of the American economy, and competition is beginning. Noam Scheiber at TNR has more. 

Politics

- "Crooked" Rod Blagojevich is no more, after being tossed out by the Illinois State Senate yesterday.  In case you didn't know, the new governor is former Liutennant Governor Pat Quinn. The NY Times followed him around for the day, which is grand fun.

- The Senate approved SCHIP bill yesterday, providing health insurance for millions of low-income children who do not qualify for Medicaid but cannot afford private insurance.  This is the first time our federal government is spending money to cover children and pregnant women who are legal immigrants.

- New Hampshire Senator Judd Gregg is a real possibility to end up at the head of Commerce.  This means the Senate could end up with 60 Democrats.

- After being ripped to shreds yesterday (cough), Chip Saltsman has bowed out of the RNC chair's race.  Good riddance.

Economy

- A government  report came out with some indicators on how our economy fared in the fourth quarter.  You probably won't be surprised to learn that it didn't fare very well.  Our GDP shrank at an annual rate of 3.8 percent, though that rate falls to 5.1 percent if you discount growth in inventories.  Still, we did better than the expected 5.5 percent contraction that many economists were expecting.

- Chrystia Freeland at FT profiles George Soros, who now seems more prescient than ever in his prediction of this economic crisis.

International

- Turkish Prime Minister Recep Tayyip Erdogan got into an onstage spat over the Gaza war with Israeli President Shimon Peres at Davos yesterday, and walked out of the conference.  He returned home to a hero's welcome in Turkey.

- The salacious sex life of South African President Kgalema Motlanthe has stirred gossip, debate, and questions across the country.

One More Thing

- Last, number 41 tells a joke that number 42 can't tell (it's about the ugliest woman he's ever seen).  Fortunately, he's got his own.