A dire economic forecast from the Federal Reserve didn’t prevent a small rally on Wall Street, where the Dow added 62 points. It was the fourth gain in the last five sessions. Minutes from the last Fed meeting three weeks ago show governors believe the recession could drag well into the new year, with economic output contracting in 2009 as a whole and inflation flirting with "uncomfortably low levels."

The latest economic numbers aren’t good either. The Census Bureau reported new factory orders fell for the fourth-straight month in November. Last Friday, the Institute for Supply Management said its national manufacturing index hit a new 28-year low in December.

There’s a new hotshot fund manager in town and his name is Hank Paulson. The government’s investments in banks and financial institutions through TARP have appreciated by about $8 billion, or 4%, much better returns than must fund and hedge fund managers are getting today, according to an analysis by Sen. Judd Gregg.

Time magazine reports that former Time Warner Chairman and CEO Dick Parsons is under consideration for Commerce secretary. Parsons was a onetime aide to President Ford and served on a Social Security study group for President Bush.

Falling oil prices are putting a squeeze on Hugo Chavez’s international adventures. State-owned Citgo suspended a free heating oil program for poor Americans this week. Analysts predict Chavez won’t have the money to fund outside groups to promote socialism and oppose the United States. Oil represents 94% of Venezuela’s exports and half the national budget.

They’re calling it the new European "Cold War" (literally!) as Russia yesterday cut off the flow of gas through the Ukraine altogether, depriving the EU of one-fifth of its gas needs. The EU has called for an urgent settlement of the price dispute between Russia and the Ukraine. In the meantime, several EU countries have introduced emergency restrictions on natural-gas use.