By Beth Kowitt

Want to know what the next big thing is for investors? Look for industries that haven’t hopped onto the digital wave, said Nancy Peretsman of Allen & Co. during Fortune’s Most Powerful Women Summit.

“You can see that for very few businesses,” said Peretsman in a session on investor insight with Juliet Flint, partner at venture capital firm Kleiner Perkins.

Essentially none of the women at Fortune’s conference can say their companies operate the same way that they did 15 years ago, but those that do are ripe for change, says the managing director of the media investing firm.

For Peretsman that means health care and education, “two industries that haven’t yet made the migration to a digital age.” The green and mobile industries were also mentioned during the session as areas for potential investments.

As an example of the lag in education, look at the textbook industry, Peretsman says. A consumer pays on average $100 for a textbook, but the originator of the content only gets $3 to $5 for every book.

“The rest is lost in an archaic distribution system,” she says.

The major barriers for these industries entering the digital age: They are ridden with local politics, have an embedded employee base, and have a disproportionate number of non-profits attached to them.

The way that we run our lives is changing. The key for these industries is figuring out how they can keep up.

“I left a legacy of shame. It is something I will live with for the rest of my life.”

– Bernie Madoff at his sentencing in a Manhattan courtroom today. He received 150 years in prison. According to Fortune’s Nick Varchaver, who was at the sentencing, Madoff explained his crime the same way he did when he pleaded guilty in March: “”I couldn’t accept the fact that, for once in my life, I failed.”

Maybe Madoff should have read this Fortune story about bouncing back, which Pattie Sellers wrote in 1995. It’s too late, but he’ll have plenty of time to read now. –Jessica Shambora

by Patricia Sellers

You might call Al Koch the world’s biggest trash collector. As bankrupt General Motors (GM) splits into two parts — New GM, containing Chevrolet, Cadillac, Buick, and GMC, and Old GM, containing designated bad assets such as Pontiac, Saturn, Hummer, Saab — Koch is the hired gun who’s supposed to create value from that latter lot.

Bringing “New GM” out of bankruptcy will be difficult enough. Why would anyone take the tougher slog at “Old GM”?

This is what Koch does — the toughest turnarounds. He’s vice chairman at restructuring consultancy AlixPartners, which works on saving sick comapnies globally but has been a Detroit mainstay for decades. AlixPartners’ clients have included DeLorean’s creditors in 1984, Detroit (the city itself) in 1994, and Kmart in 2002.

Koch, now 67 and a 14-year veteran of the firm, has served as interim CEO of crippled companies such as video-game distributor Handleman (HDLM) and manufactured-home builder Champion Enterprises (CHB). But his most memorable job was at Kmart in 2002. Kmart was the largest retail restructuring in history and, as it turned out, one of AlixPartner’s big successes.

As Kmart’s interim CFO through its bankruptcy, Koch got lucky. When I interviewed him in late 2005 for a story about investor Eddie Lampert, he said that he and his restructuring-expert colleagues had never heard of this young investor who had swooped in and bought Kmart bonds at 40 cents on the dollar. “To most people, Kmart looked like a pile of trash,” Koch said. “We were told that this hedge fund guy had bought a huge portion of Kmart and wanted to get it out of bankruptcy fast.”

Lampert pressed Koch and the other restructuring pros, who were earning $10-20 million a month during Kmart’s bankruptcy, to exit Chapter 11 quickly. Lampert argued that neither customers nor management talent would be attracted to a bankrupt Kmart. The company emerged from bankruptcy in May 2003, a year ahead of schedule. Lampert, who had invested some $800 million for a 54% ownership stake, merged Kmart with Sears two years later to form Sears Holdings (SHLD).

Old GM won’t be as smooth or as quick as Kmart was. As my colleague Alex Taylor notes, “new GM” will have an incentive — from the U.S. government, new owner of a 60% stake –  to exit Chapter 11 rapidly, possibly in 60 to 90 days. The Old GM restructuring, meanwhile, could take years.

As Old GM’s chief restructuring officer, Koch will be negotating separation agreements with New GM and commandeering efforts to unload or liquidate those dud brands such as Saturn and Hummer.

His influence could turn out to be broader than his marching orders designate. After all, he’s worked with GM several times over the years. These past few months, he’s helped negotiate the sale of New GM assets to the government. Now he’s reporting to CEO Fritz Henderson and to GM’s board as well. As a guy who lives and dies by finding value in junk, Koch surely won’t take his shot at making history lightly.

Lots of people are now seeing light at the end of the global recession, but it pays to keep the dark clouds in sight. My Fortune colleague Shawn Tully does that in his just-published story about Ireland. As he notes, Ireland’s economy is suffering the deepest plunge of virtually any country outside of Iceland. And it’s not over yet.

To get a broader view of global risk, I called Ian Bremmer, the president of the Eurasia Group. Bremmer is an expert on geopolitical risk around the world, and his firm advises lots of well-known companies including Citigroup (C), NYSE Euronext (NYX), and PricewaterhouseCoopers. I don’t know Bremmer well, but when I saw him speak at a launch party for his new book, The Fat Tail, I was impressed with his finesse at describing a world at greater risk than ever in our lifetimes. Sallie Krawcheck, the former Citi exec who hosted the party for Bremmer and co-author Preston Keat, connected us. And we talked about danger and opportunity around the world. Here are excerpts from my chat with Bremmer:

What are fat tails?
Fat tails are one-in-100-year storms that increasingly happen every 15 minutes. They are extreme outcomes that normally you wouldn’t have to worry about.

Do thin tails become fat tails?
Yes. You had all these risks – thin tails – before the financial crisis hit. Now they’re fat tails.

Like what?
If you‘re an investor in Russia, six months ago you didn’t have to worry too much about that country going hard-authoritarian. That’s something that you now have to worry about.

What should investors in Russia watch for?
Public disagreements between liberals and hard-liners on policy. Social discontent in the rural regions.

You list 10 fat tails. How likely are they to happen?
These are not all things that we think are going to happen. But I would bet that a couple of them will happen.

Which ones are highest on your “likely” list?
Pakistan. I don’t think we’re close to having a failed state, as [Richard] Holbrooke recently said. The Taliban aren’t going to take over. Nukes aren’t going to end up in the hands of terrorists. But radicals taking over the tribal regions, combined with the economic crisis, could lead to enough social discontent that the military takes over.

Chances of that?
I’d say 30%.

What would that mean for global investors?
Investors might like it, short-term. It would lead to temporary stability. But this would not be a happy situation for the long-term stability of the region. It would mean more fractious relations with India and a constraint on Pakistan’s economic reform long-term. Military takeovers tend to be buffers against the worst scenarios, but also against the best scenarios.

Can fat tails be positive in the long term?
Yes. Political risk is not necessarily about things that can blow you up. Take Argentina. The fat tail there is actually an opportunity. The global recession is undermining the economy, and the government can’t handle the fallout well. As poll numbers continue to fall, you could see the President [Christina Fernandez de Kirchner] lose the election in June, and the Kirchners could be out. If the current Vice President [Julio Cobos] comes in as President, there will be much less state intervention in the markets, more openness in agriculture, and an improvement in market sentiment.

Resilience is more critical than ever—for people and countries. What countries look most resilient?
The U.S. is not going to lead the world out of the crisis. China will. It’s important to recognize that China didn’t have a banking crisis. There was a financial crisis in less than half the world, and there is a global recession. China has had an economic downturn. But China has put a massive stimulus in place. And they’ll come out of this fast.

Who else is resilient?
The Persian Gulf countries. They’re helped by small populations, cheap access to natural resources, and cohesive governments that can deal with a downturn. Brazil and Indonesia also have cohesive governments, which helps.

What about India?
Interestingly, India benefits from its decentralized government. The government is not being blamed for India’s economic problems—and that’s an advantage.

My Fortune colleague Shawn Tully just wrote a story about Ireland on the edge. How scary it is to see developed countries at risk of default this year. How do you see risk in Europe right now?
We’ll see very anemic growth there for a long time. I’m not an expert on default risk. But I will say, there’s increasingly more stability in the system. We’re no longer at risk of broad contagion.

In Friday’s Wall Street Journal, you wrote an op-ed that said Gordon Brown might not survive as Britain’s prime minister. What are the chances that he’ll be out this year?
I think it’s 50-50, honestly. There’s a real possibility. He’s not going to go easily. The underlying situation has gotten so bad that a strong conservative leadership – or any strong leadership – would be better than they have now. Britain should be one of the strongest supporters of the U.S. on collective security and climate change. But right now, Britain is in absolute nowhere-land.

Any more power shifts you care to talk about?
Everyone talks about Wall Street vs. Main Street. K Street has taken over both. New York used to be the financial capital. Now Washington is. Washington will determine who’s a winner and who’s a loser. Power has shifted from Dubai, the financial capital of the UAE, to Abu Dhabi. From Shanghai to Beijing. Mumbai to Delhi. The state is the principle economic actor. It’s a repudiation of the free-market system around the world.

Sounds like the end of capitalism.
It’s a problem for investors and for the robustness of economic growth. This system isn’t as efficient as the free market is.

“If you are in the investment business and you have a high IQ, sell 30 points to the next person. You do not have to be a genius at all. But you do have to have emotional stability, and you have to have some peace about your decisions. I don’t know how much is innate and how much can be taught. If you have that quality you will do very well. As I have said many times, it is simple, but not easy.”

–Warren Buffett at Berkshire Hathaway’s (BRKB) annual shareholder meeting in Omaha last weekend. Buffett’s theory that you don’t have to be a genius to make money investing is well known, but it bears repeating in these uncertain times where “emotional stability” and “peace” seem in short supply. After Friday’s closing bell, Berkshire reported a quarterly loss of $1.4 billion vs. a $1 billion profit in the same quarter a year ago. Among the culprits: write-downs in derivatives, falling oil prices, and the retail crunch. Strong profits in insurance underwriting shored Berkshire. Shares were up slightly in after-hours trading.  –Jessica Shambora

“This is a time for smart people. This is a time for entrepreneurial people. This is a great time for people like me.”

–Donald Trump on Larry King Live Wednesday night. With his trademark bravado, Trump told Larry the moment is ripe for investing in real estate. “You go see your bank — maybe you can make a deal, maybe you can’t. But you can make a deal with a bank on another house, and much better than the one you’re living in.”

For more evidence supporting the Donald’s claim that this is a time of opportunity, see my post today, which mentions two new businesses helping people find flexible part-time work. Also, “Get Rich Slow,” a story in the current issue of Time that says there’s never been a better time to start your own Internet business. –Jessica Shambora

Blackstone Group (BX) CEO Steve Schwarzman is worried. Very worried.

Last evening, at the firm’s annual press dinner, the big boss of the buyout industry riffed about what he’s been hearing as he has circled the globe. I was lucky enough to sit at his table — and I asked him that question, in fact: So, Steve, how do you think the U.S. and its economic policies are being viewed abroad? Though the dinner is a strictly off-the-record affair to convene financial journalists with the Blackstone brass, Schwarzman agreed to let me share some of his thoughts here.

Schwarzman says that foreign leaders and investors abroad have been telling him that they can’t quite believe what they see happening in the U.S. — the decline of capitalism, no less. And they’re asking, he says, how they can drum up public support for capitalistic endeavors in their own countries when the nation that’s long been their model — the U.S. — is shifting away from a market economy. The international anxiety, Schwarzman contends, can’t be good for global stability.

Yes, he’s a Republican, as you might have guessed. (Last summer, Schwarzman, along with other business VIPs including Cisco (CSCO) CEO John Chambers and former eBay (EBAY) CEO Meg Whitman — who’s now running for governor of California – tried to help John McCain with his economic policy.)

Clearly, though, it’s not just GOP-leaning financial execs who are fretting. When Tony James, Schwarzman’s No. 2 at Blackstone and his heir apparent, swung by our table, he too expressed worry that if the U.S. government shackles the financial giants with rules and regs and pay caps, the whole industry will have trouble luring talent.

Meanwhile, Blackstone’s share price has sunk more than 50% to below $9 in the past year. The firm has picked up advisory work for some casualties of the crisis — AIG, for instance — and for healthier companies like Microsoft (MSFT) (on its failed bid to buy Yahoo last year) and Procter & Gamble (PG) on its 2008 sale of Folgers coffee to J.M. Smucker.

Blackstone is reportedly considering launching a $3 billion fund to provide financing to companies on the brink of bankruptcy. But for the most part, Schwarzman & Co. are sitting on the sidelines with some $25 billion in capital, waiting to invest again in major real-estate and private-equity deals. The firm’s last big buyouts happened last fall: Apria Healthcare and the Weather Channel, where Blackstone partnered with Bain Capital and General Electric’s (GE) NBC Universal.

Blackstone wins big, of course, only when it sells the stuff it has bought — properties in its stable such as Hilton Hotels, Freescale, Nielsen and SunGard, all acquired before the global markets collapsed. The firm’s last major sales? That was in 2007, when it flipped Equity Office Properties months after acquiring it from Sam Zell for $38.7 billion in the largest real-estate deal in history. Ah, remember the good old days of get-rich-quick capitalism?

“When I call Charlie with an idea, and he says, ‘That is really a dumb idea,’ that means we should put 100% of our net worth into it. If he says, ‘That is the dumbest thing I’ve ever heard,’ then you should put 50% of your net worth into it. Only if he says, ‘I’m going to have you committed,’ does it mean he really doesn’t like the idea.”

–Berkshire Hathaway (BRKB) CEO Warren Buffett in Marc Gunther’s cover story in the April 27 issue of Fortune. According to Buffett, his investing partner Charlie Munger is a committed skeptic. So when Munger suggested investing in an electric car company called BYD, Buffet figured it had to be a good pick. The story explains why Buffett is banking on this obscure Chinese car company and a CEO who drinks his own battery fluid.–Jessica Shambora

“How to find a job.” That’s the cover story in the new Fortune, out this week.

Here’s one place to find a job: Workout firms that help companies in trouble. Fred Crawford, the CEO of AlixPartners, came by Fortune’s offices late last week and talked about his buoyant business. “We have 850 people, and we’ve been growing 20% to 30% a year for the past decade. We think that’s sustainable.”

The elite in this down and dirty business of corporate restructuring include AlixPartners and Alvarez & Marsal, the outfit that’s now in charge at bankrupt Lehman Brothers (honcho Bryan Marsal replaced Dick Fuld as Lehman’s CEO in January). At AlixPartners, Crawford is a hybrid of sorts: He earned his chops at other consulting firms helping relatively healthy companies like Procter & Gamble (PG), Fedex (FDX), Coca-Cola (KO) and Disney (DIS) build their top lines.

Now, at AlixPartners, he’s selling two main types of services: turnaround/restructuring (where past clients  include DeLorean in 1984, Detroit in 1994, and later Enron, Refco, WorldCom and Kmart) and “business performance improvement.” The latter service is for companies that want to stay out of the former category. Among the companies on that roster today: Borders and Saks. Beleaguered Borders’ (BGP) stock has fallen from $25 in 2007 to under $1. Meanwhile, Saks’ (SKS) stock decline has been almost as steep, to $1.88.

Working with–and making money from–a wide range of companies, struggling and really sick, gives Crawford a good view on the economy. So what’s his outlook for recovery? Not good.

Crawford mainly follows three indicators: unemployment, housing values and consumer spending and saving. The latter is most critical, he says–and he’s worried based on the findings in an AlixPartners survey of 5,000 U.S. households, completed in March. Americans say that even after the recession ends, their spending will return to just 86% of pre-recession levels. “That would take a trillion dollars out of the U.S. economy annually,” says Crawford, admitting that he finds that big of a spending dip hard to imagine.

Even so, he says, people who predict a recovery this year “are just dead wrong.” He adds: “I think this will be a severe recession with a long tail on it.” And where will crisis strike next? Regional banks, Crawford predicts. Gloom, he says, is “the new normal.”

Photo courtesy of Joyce Ravid

by Jacqueline Novogratz, founder and CEO of Acumen Fund and author of The Blue Sweater

As a 25-year old banker, I decided to leave my career and change the world. This sounds like a move that a 25-year-old banker might make today–to escape the chaos.

But this was 1986. I thought I might start my new life in Africa. I discovered soon enough, though, that most Africans didn’t want saving, thank you very much. Certainly not by me–a young, unmarried American woman whose French was pathetic and whose understanding of the continent was limited to reading a few books.

I could have given up my dream. But I had a calling, so to speak. One sun-drenched day, I was jogging up and down the hilly streets of Kigali, Rwanda. Out of nowhere, a young boy, wearing a blue sweater, walked toward me. He was about 10 years old, skinny, with a shaved head and huge eyes, and not more than four feet tall. The sweater hung so low that it hid his shorts, covering toothpick legs and knobby knees.

My Uncle Ed had given me a blue sweater when I was in middle school. A soft blue wool sweater, with stripes on the sleeves and an African motif on the front–two zebras walking in front of a snow-capped mountain. This day in Rwanda, I ran over to the boy, who was obviously terrified. I grabbed his shoulders and turned down his collar. Sure enough, it was my name, Jacqueline Novogratz, on the tag.

My sweater had traveled thousands of miles for more than a decade.

Over the past two-plus decades, I’ve committed my life to understanding global connectedness and issues of poverty. In 2001, after working for more than seven years for the Rockefeller Foundation, I founded Acumen Fund, a nonprofit venture capital fund that invests in the poor. We don’t believe in traditional aid. We hold the recipients of our loans and equity stakes accountable to clear goals.

We’ve funded A To Z, a company in Tanzania that today produces more than 20 million anti-malarial bed nets annually and employs over 7,000 people, mostly women. We’ve invested in Mumbai’s first emergency ambulance service that serves rich and poor alike (and whose yellow ambulances were ubiquitous in the news coverage of last November’s attacks in that city). We’ve supported the development and distribution of drip irrigation systems that allow hundreds of thousands of poor farmers in India and Pakistan to double or even triple their crop yields and income. We’ve invested more than $40 million in enterprises that have brought safe water, affordable health care, housing, and alternative energy to low-income people in South Asia and East Africa.

In writing my new book The Blue Sweater, I’ve thought a lot about what my adventures, experiences and the people I’ve met have taught me. I learned that it’s all too easy to veer toward the charitable–to have low or no expectations of low-income people. This does nothing but confirm prejudices on all sides. “Philanthropists should focus on supporting others to do what they already do well,” one of my mentors, the late John Gardner, told me back when I was in business school at Stanford. “Individuals don’t want to be taken care of. They need to be given a chance to fulfill their own potential.” (Gardner, who served in the Johnson Administration, founded Common Cause and headed the Carnegie Foundation before I knew him.)

I’ve also learned this: “I am part of all that I have met.” This is from Tennyson’s Ulysses. It’s one of my favorite lines in literature. I try to live it every day.

Jacqueline Novogratz is the founder and CEO of Acumen Fund, a non-profit global venture fund that uses entrepreneurial approaches to solve the problems of global poverty. Her new memoir, The Blue Sweater: Bridging the Gap Between Rich and Poor in an Interconnected World, tells the inspiring story of a woman who left a career in international banking to spend her life on a quest to understand global poverty and find powerful new ways of tackling it. Acumen Fund’s corporate supporters include Goldman Sachs (GS), Google (GOOG), Cisco (CSCO), Nike (NKE), Coca-Cola (KO), Exxon Mobil (XOM), Citigroup (C), Dow Chemical (DOW), Credit Suisse (CS), as well as the Skoll Foundation and the Rockefeller Foundation.

“Our stock price is not an indication of our financial strength.”

– Citigroup (C) CEO Vikram Pandit in a memo to employees sent Monday night. How ironic that Citigroup shares jumped 38% on Tuesday. Citi’s stock is so low that it took a gain of just 40 cents to rise so much, percentage-wise, and close at $1.45.  Citi’s pop was part of a overall surge in the market that had the Dow up 379.44, or 5.8%, today. –Jessica Shambora

Bank-industry analyst Meredith Whitney, one of FORTUNE’s Most Powerful Women and the subject of our cover story last summer, is all over the place this week. An op-ed, “Credit Cards are the Next Credit Crunch,” in today’s Wall Street Journal presents a dreadful outlook for consumer spending. She says that she’s upped her estimate for how much banks will yank credit lines to consumers–by $2 trillion this year and a total of $2.7 trillion by the end of 2010.

Lenders have to retrench, having extended credit way too freely for the past 15 years. But what’s really scary about such a dramatic pullback, Whitney says, is that lenders will be taking credit away from people who are able to pay their bills. And given that two-thirds of the U.S. economy depends on consumer spending, this will seriously retard any recovery.

Whitney doesn’t name lenders in her WSJ piece, but in a report that she sent to clients today, she lists the five companies that control two-thirds of the market: J.P. Morgan Chase (JPM), Bank of America (BAC), Citigroup (C), Capital One (COF) and American Express (AXP). While customers have a mortgage loan from just one company–a “monogamous relationship,” she notes–the typical credit-card customer borrows from more than one of these lenders. So, she suggests: “These lenders need to work together…by setting consortium guidelines on credit. We, as Americans, are all in the same soup here, and desperate times are requiring of radical and cooperative measures.”

Meanwhile, there’s a very good Q&A, titled “The Straight Shooter,” with Whitney in a magazine called Power, just out. In the interview, she talks about chatting up Warren Buffett (BRKB) at Fortune’s Most Powerful Women Summit last October. The topic: paper routes. Here’s an excerpt:

“When I was about eight or nine, I told my mother that I had to have my own money. And that led to the newspaper route. It was just run-around money. In fact, the first real thing I bought was a watch for my mom, which she still has. I was very good at delivering papers and was able to buy up other paper routes. At the FORTUNE women’s summit in October, I didn’t want to bug Warren Buffett, who was there. But I needed to talk to Carol Loomis [FORTUNE senior editor-at-large], who was with him. I couldn’t help myself and said to him, “Thank you for providing such comfort at a time when most Americans are scared to death.” And he said, “Tell me about your paper route.”

If you had a real paper route, not just a casual hobby, you will talk about it all day long. And I said, “Well, I’ll tell you about my paper route, but I need to know a few things. Was yours a bike route or on foot?” And he said, “Bike.” And I said, “That is such a different experience because my paper route was on foot, so I don’t know if we can compare ourselves.” I would go up to the front door, put the paper behind the screen door and get better tips. And so I asked Warren Buffett, “What was your best tip?’ And he said, “$1.” I asked him what that would be adjusted for inflation. And he said, “$10.” I got $20.”

As you may know, Whitney last month quit Oppenheimer & Co. to set up her own shop, Meredith Whitney Advisory Group. If she carries her paper-route business sense into adulthood, I think she’ll make a go of the new venture.

Warren Buffett hosted CNBC’s Squawk Box this morning and had this to say about the notion, held by many Democrats, that a crisis is a terrible thing to waste:

“I don’t think anybody on December 7 [1941] would have said, ‘A war is a terrible thing to waste, and therefore we’re going to ram through a whole bunch of things and expect the other party to unite behind us on the big problem.’”

The deepening crisis is an “economic war,” the Berkshire Hathaway (BRKB) CEO said. And the Obama Administration, obviously stretched, should focus its efforts on it.

“The biggest lessons from the downturn have been that no matter how bad a position can get, it can get a lot worse. And never be too big in anything.”

– Bank analyst Meredith Whitney in an email to investors. In the note she recaps what she learned during a lunch this week with Goldman Sachs’ (GS) president Gary Cohn and CFO David Viniar. Goldman has stayed strong, relatively, as rivals have fallen. Not that the firm isn’t feeling great pain. In commercial real estate, Cohn told Whitney that this is “the most illiquid market he has ever seen.” But as the markets have gone from bad to worse–the Dow fell 281 points today, another 4% plunge–Goldman’s market share and pricing have benefited from being one of the “last men standing,” Whitney says. She is neutral on Goldman stock, trading at $81.72 vs. $164.97 a year ago.

In case you missed it, Whitney was cited in Tom Friedman’s New York Times column on Wednesday. Type “M-E-R-E” into Google’s search box and a list of things you might be searching for will appear, with “Meredith Whitney” at the top of the list. Free Internet marketing for her new firm, Meredith Whitney Advisory! –Jessica Shambora

“This is the greatest orgy of speculation we’ve ever had in our U.S. stock market.”

–Vanguard Group founder John Bogle, from an interview with CNNMoney. On Tuesday, following Treasury Secretary Tim Geithner’s introduction of the Financial Stability Plan, the Dow dropped 382 points, or 4.6%, closing at its lowest level since Nov. 20. “We used to go for years with no 3% changes in the market,” Bogle noted. “We’ve had 25 3% ups and downs in the last year.”

Today was another down day for the markets. The Dow slid 82 points, or 1%.  There are no simple answers to this mess, notes Bogle. “We earned our way into it and we’re going to have to earn our way out of it.” –Jessica Shambora

This was a week for fallen heroes and flailing leaders.

On Tuesday, Treasury Secretary Tim Geithner disappointed with too few details on the new bank bailout.

On Wednesday the bank CEOs got flogged in Washington – one more indignity after schlepping there on the Delta Shuttle or Amtrak’s Acela.

President Obama scored with the $789 billion stimulus bill. But it emerged, after plenty of compromise, leaner than most economists had hoped for. Obama’s honeymoon is short – and now another nominee for Commerce Secretary is out.

And look at our sports legends. Or not. A-Rod admits he took steroids when he played for the Texas Rangers. After Michael Phelps blows his hero status with a bong. Did you catch the news about Lance Armstrong? Five months after the seven-time Tour de France champ agreed that he would return to cycling and submit to a strict anti-doping program, he reneged on the commitment to the custom regime. This galvanized skeptics who have suspected his purity for a long while.

And in business, a slew of companies went bankrupt or edged towards collapse. Most prominently, Paul Allen, who co-founded Microsoft (MSFT) with Bill Gates 34 years ago, announced that Charter Communications (CHTR), where he’s chairman and the largest voting shareholder, will file for Chapter 11 by April 1 in order to restructure its $21 billion long-term debt load.

One other titan who once had the golden touch, Mel Karmazin, is fighting to save his company: debt-ridden Sirius XM Radio (SIRI). Karmazin is the empire-builder who founded Infinity Broadcasting, sold it to CBS (CBS), and became Sumner Redstone’s No. 2 at Viacom (VIAB) – until they clashed and he left the company. Late last year, when I talked to Karmazin for a profile of former Viacom CEO Tom Freston, he seemed jaunty and confident. He noted, in fact, that he had smartly sold a portion of his Viacom holdings while he was working for Redstone. “That was one of the reasons that Sumner hated me,” Karmazin said. “He asked me, ‘Why aren’t you loyal? Why aren’t you keeping the stock?’ Then when I left, I sold the rest at $37.”

Viacom shares now trade at $17. Too bad Karmazin shoveled his millions into Sirius, which has sputtered from $3 to 10 cents over the past year. Karmazin holds 8.5 million shares of Sirius XM, according to recent SEC filings. If he doesn’t secure a buyer or partner to inject the needed capital, Sirius could file for bankruptcy as early as Tuesday.

Let’s get through this Friday the 13th. And have a good weekend.

Guidance–the revenue and profit forecasts that companies divvy out to Wall Street analysts–is dying a slow death. Hooray for that!

As a slew of big names–Wal-Mart (WMT), Costco (COST), Microsoft (MSFT) and Yahoo (YHOO), among them–announced in the past two weeks that they would suspend or limit guidance because of economic uncertainty, analysts who follow these companies have reacted skeptically. Not giving 2009 guidance “hardly instills confidence in the business,” Sanford Bernstein analyst Andrew Wood wrote about Unilever yesterday. Indeed, less transparency is often ominous. Since December, when General Electric (GE) CEO Jeff Immelt put the nix on quarterly earnings guidance, GE stock has fallen 34%.

But here’s the reality: These companies are doing the right thing. In fact, there’s long been a small cadre of highly respected corporate chiefs who swore off earnings guidance on principle. Jim Kilts, who once ran Kraft (KFT) and Gillette and sold the latter to Procter & Gamble, wouldn’t provide guidance because, as he once told me, “Companies get in trouble the same way. They drive the organization to make a number rather than do the right thing.” Kilts calls this the “circle of doom.” Now doing private equity at Centerview Partners and on the boards of MetLife, Pfizer, and MeadWestvaco, he called this afernoon to offer his take on today’s no-guidance trend. “Everybody’s getting on the bandwagon,” he said, sounding happy.

One of Kilts’ disciples from his Kraft days, Bob Eckert, is now CEO of Mattel (MAT). He delivered disappointing earnings this week, but the forecast that the analysts had was Wall Street’s own, not Eckert’s, because he too refuses to give guidance. Always has. In 2000, when Eckert joined Mattel as chief, he decided, “We were not going to play that game anymore,” as he told me. He got rid of Mattel’s targets of 15% annual earnings growth and 10% revenue growth. He also sent colleagues copies of what he said was “my all-time favorite business article ever”: a 2001 Fortune story titled “The 15% Delusion,” by Carol Loomis, about the dangers of ambitious growth goals.

I called Eckert yesterday. I hadn’t talked to him in years. Our converation was off-the-record, but I’ll tell you, he believes more strongly than ever that providing guidance to Wall Street propels a boss to make bad decisions. Eckert reminded me of another article that explains the danger intelligently: “Temptation is all around us,” a first-person piece by Novartis CEO Dan Vasella that Fortune published in 2002. Here’s an excerpt from Vasella’s first-personer:

The practice by which CEOs offer guidance about their expected quarterly earnings performance, analysts set “targets” based on that guidance, and then companies try to meet those targets within the penny is an old one. But in recent years the practice has become so enshrined in the culture of Wall Street that the men and women running public companies often think of little else. They become preoccupied with short-term “success,” a mindset that can hamper or even destroy long-term performance for shareholders. I call this the tyranny of quarterly earnings…

Tyranny is a slippery thing. Rarely does it make itself known for what it is right from the start. Once you get under the domination of making the quarter–even unwittingly–you start to compromise in the gray areas of your business, that wide swath of terrain between the top and bottom lines. Perhaps you’ll begin to sacrifice things (such as funding a promising research-and-development project, incremental improvements to your products, customer service, employee training, expansion into new markets, and yes, community outreach) that are important and that may be vital for your company over the long term…

And here I would contend that the culprit that drives this cycle isn’t the fear of failure so much as it is for many the craving for success. For the tyranny of quarterly earnings is a tyranny that is imposed from within.

It’s hard to break out of such cycles, as Vasella notes. One of the few good thing about these dire and unpredictable times is that they’re giving CEOs a chance to behave a little better.

P.S. For more on Costco’s troubles and how one mega-store manager is trying to do to beat them, read “Discount retail woes: a quick tour,” on Postcards yesterday.

I stopped by BlackRock’s (BLK) midtown Manhattan offices on my way to jury duty this morning. Bob Doll, the giant money management firm’s vice chairman and chief investment officer for global equities, was giving his annual forecast. “I’ve been doing this for about 15 years,” he told me before he stepped up to the podium.

“This must be your most dire forecast, Bob?” I asked.

“No,” he said. “The headlines are going to be terrible. But it won’t be terrible for the markets.”

This historic year, as Doll told a group of some 20 financial journalists, he started out with 19 predictions (so much to talk about!), then tried to cut his list to 10, but settled on 12. In the interest of brevity (and convenience, as I’m penning this Postcard to you on my iPod Touch inside the jury screening room downtown), I’ll give you five of Doll’s predictions for 2009 that I find most intriguing.

1. The U.S. economy will post its first nominal decline in GDP in 50 years. With that, average household net worth will drop by double digits–also unseen since the 1930s.

2. Global growth will fall below 2% for the first time since 1991. We’re over the hump, though: The fourth quarter of 2008 will likely prove to be the period of lowest growth.

3. Inflation will fall close to zero in many developed countries. But widespread deflation will be avoided.

4. Corporate earnings will decline by double-digit percentages: probably 12%, following an estimated 21% dive last year. This means that 2009 will bring the first back-to-back annual drop in profits since the ’30s.

5. And now the good news you’ve been waiting for: Doll forecasts double-digit gains for U.S. stocks in 2009. Why is he hopeful? I’ll call it the rule of two-thirds: The price of oil has declined by two-thirds, he notes. And two-thirds of stocks now have price-to-earnings ratios below 10. Also, Doll points out, stocks are yielding more than Treasuries for the first time in 50 years.

Lots of firsts here, yes? Which makes forecasting all the more dangerous. But Doll–who spent his earlier career at Merrill Lynch, which is BlackRock’s major investor and now part of Bank of America (BAC)–makes a convincing case. “There’s never been more cash on the sidelines,” he says. “There’s fuel for the fire. Somebody needs to figure out what the match is to light it.”

In fact, the fire may be lit already. U.S. stocks are up 25% from their November 21 low, and Doll believes they’ll outperform European stocks as the recovery continues. “There’ll be selling squalls along the way,” he warns. In other words, buy with caution and hold on!

P.S. For more on BlackRock and CEO Larry Fink, see “Can this man save Wall Street?” which ran in Fortune in October.

Warren Buffett emailed this note to the directors of his company, Berkshire Hathaway (BRK.B), Tuesday after he heard that the U.S. Treasury sold $32 billion in 4-week bills at a yield of 0%:

“This should be bullish for Berkshire. With great foresight, I long ago entered the mattress business in a big way through our furniture operation. Now mattresses have become fully competitive as a place to put your money, and sales will soon take off.”

As the government commits more and more money to its multitudinous rescue efforts–of Bear Stearns, then AIG (AIG), then Citigroup (C) and its bank rivals, then Citigroup again, and now more money for Fannie Mae (FNM) and Freddie Mac (FRE)–we wonder: Where, oh where, will these bailouts end? In Detroit, with General Motors (GM), Ford (F)and Chrysler securing their desperately needed billions? Alas, the road to shore up capitalism will probably reach way beyond Michigan.

“I think this year will be remembered as the beginning of the Age of Interventionism,” writes Byron Wein, the chief investment strategist at Pequot Capital Management, in a commentary for Morgan Stanley (MS) clients. Wein, a very smart guy and former markets ace at Morgan Stanley, contends that the events of 2008 will reverberate for generations. And as for free markets being free from here on, no way. “In looking at the 10 sectors of the S&P 500, only consumer staples, basic materials, industrials and technology appear able to move forward without the federal government playing more than a normal regulatory function,” Wein writes. “Financial services, utilities, telecommunications, energy, health care, and consumer durables, representing close to 60% of market capitalization, will have a major government presence, in my view.”

All of this, Wein says, is likely to have major implications for executive pay, labor practices, dividends, earnings, and stock valuations. Moreover, the federal government will have to recruit administrative people to help oversee the companies that it backs. “What kind of people will take these jobs and what does the resultant expansion of bureaucracy mean to the cost of government? What is certain is that for many sectors of the U.S. economy, it will not be business as usual.”

As for the banking-industry, well, I was talking yesterday with a Fortune 500 CFO, and when I asked him if he believes that the government will end up spending more than currently planned to rescue troubled banks, he said he wasn’t sure. But one key metric to watch, he said, is the unemployment rate: If unemployment is in the 7.5% range next year, more federal money will likely not be needed for bank rescues. If unemployment heads toward 10%, that’s another story.

For what it’s worth, Wein believes that “something north of 8% is probable” for unemployment. He advocates stemming the rise by putting people to work on infrastructure and alternative energy projects. We certainly need something like that to carry us out of the downturn. In the 1980s, the lift came from a decline in interest rates from 15% to 5%; in the 1990s, it was the Internet and the tech boom; this decade, until the chaos, it was housing, emerging markets and consumer spending. The idea that relief may come next from rebuilding America, literally, is at least encouraging. Give thanks and enjoy the holiday.