‘Scare tactic’ — Obama slams Muslim portrayal  —  The Obama campaign is condemning as “tasteless and offensive” a New Yorker magazine cover that depicts Sen. Barack Obama (D-Ill.) in a turban, fist-bumping his gun-slinging wife.  —  An American flag burns in their fireplace.  —  The New Yorker says it's satire.

Mark Sanford Draws A Blank On McCain/Bush Economics  —  The most painful clip from the Sunday morning shows: top McCain VP prospect Mark Sanford “drawing a blank” (in his own words) on live TV when asked to name a major economic policy that President Bush and John McCain disagree on.  —  The transcript:

Paulson Statement on Freddie Mac, Fannie Mae: Full Text  —  July 13 (Bloomberg) — Following is the text of a statement issued today by Treasury Secretary Henry Paulson:  —  Fannie Mae and Freddie Mac play a central role in our housing finance system and must continue to do so in their current form as shareholder-owned companies.

MAKING IT  —  How Chicago shaped Obama.  —  Barack Obama on the South Side during his first campaign, for the State Senate.  An outsider in Chicago's system, he was meticulous about constructing his own political identity and coalition.  Photograph by Marc PoKempner.  —  KEYWORDS

CNN exclusive: Obama on foreign policy  —  Editor's note: Fareed Zakaria is a pre-eminent foreign affairs analyst and hosts “Fareed Zakaria: GPS” on CNN at 1 p.m. ET Sunday.  —  (CNN) — Sen. Barack Obama discussed his vision for the world in a wide-ranging foreign policy discussion with CNN's Fareed Zakaria.

Nine US soldiers killed in Afghanistan as Taliban attacks base  —  Taliban insurgents killed nine US troops when they attempted to overrun an American base as bloody fighting broke out in several parts of Afghanistan today.  —  Nato reported that the small American Combat Outpost in Dara …

Obama says he used “poor phrasing” on Jerusalem  —  WASHINGTON (Reuters) - Democratic presidential hopeful Barack Obama said on Sunday he used “poor phrasing” in a speech supporting Jerusalem as the undivided capital of Israel.  —  “You know, the truth is that this was an example where we had some poor phrasing in the speech.

Arnold may consider Obama energy post  —  California Gov. Arnold Schwarzenegger said in an interview aired Sunday that he would be open to the idea of serving as energy czar in a Barack Obama administration.  —  Regardless of whether he takes that particular job, Schwarzenegger, a Republican …