Troubles at Refco

Refco, a leading broker of commodity and financial futures and complex derivatives, was near collapse after its chief executive was arrested on fraud charges for allegedly using accounting tricks to hide as much as $545 million in debt. Key clients and lenders began to sever financial ties, the New York Stock Exchange halted trading of its stock, and federal regulators stepped in to prevent withdrawals and arrange an orderly unwinding of its positions. One big loser so far: private equity firm Thomas H. Lee Partners, with a 40 percent stake.

Energy Prices to Blame

Consumer prices rose 4.7 percent over the past year, including 1.2 percent in September, the biggest monthly jump in 25 years. The big culprit: energy prices. Consumer confidence also fell, and Social Security recipients won a 4.1 percent cost-of-living adjustment, increasing projected federal budget deficits. Analysts said the Federal Reserve will have to step up the pace of interest rate increases, while central bankers in Europe and Japan hinted they would do the same. Nationally, 30-year, fixed mortgage rates topped 6 percent.

Eroding U.S. Edge

A National Academy of Sciences panel warned that the U.S. lead in science and technology is rapidly eroding, threatening American prosperity. The blue-ribbon panel cited alarming comparative data on the number of Americans earning advanced degrees, test scores of high school students and spending for basic research. It recommended increasing the federal research budget, extending work visas to foreigners who earn doctorates here and offering generous scholarships for math, science and engineering students.

Red Tape 1, Evacuees 0

Katrina relief efforts stalled amid red tape and politics. As shelters closed and a deadline for hotel payments was extended, debate raged over using the Section 8 housing program that Democrats like but Republicans call a failure. A proposal to extend Medicaid coverage to evacuees hit a similar snag. The White House has yet to forward proposals for helping cash-strapped homeowners and municipal governments, curbing rebuilding in flood zones and reducing poverty among urban blacks. Other cities began inviting evacuees to resettle.

Laurels for Game Theorists

This year's Nobel Prize for economics went to Robert J. Aumann, a game theorist at Hebrew University, and Thomas C. Schelling of Yale, Harvard and the University of Maryland, an empiricist who used game theory to understand everything from nuclear deterrence to traffic jams. Schelling's brilliance was in seeing when acting irrationally could be rational, why tolerant people wind up in segregated neighborhoods and where you'd likely find your spouse if you got separated in Manhattan (under the clock at Grand Central, of course).