Saving Secrets From Extreme Savers

By Elaine Appleman Grant

Lynn Tostado is almost embarrassed about her hobby: "Saving money is, well, a passion of mine," she says. "I've always kept my eyes out for creative ways to stretch a dollar."

The Dover, N.H., accounting manager had a compelling reason to practice thrift. She spent a decade at home raising her four kids. Then she and her husband put three of them through college simultaneously.

"I really had to watch our pennies," she says.

These days, as the cost of food and gas skyrockets, credit becomes more difficult to get and consumer confidence reaches an all-time low, saving has become a must. Tostado's years of experience as a passionate saver stand her in good stead. She's hardly alone. There's a whole group of people who are passionate about saving without living a Spartan life.

Call them "uber savers."

Finding Ways to Save

1. Saving on Retail
2. Groceries
3. Automobiles
4. Giving
5. Commuting & housing
6. Phone services & other necessities
7. Travel

1. Saving on Retail

Michele Carter, a CPA and mother of two in Barrington, N.H., is a hawk about tracking sales prices on her purchases and asking retailers for the savings. For example, Carter keeps her Christmas gift receipts and, after the holiday, checks to see if retailers have slashed prices on any of the gifts she's already plunked under the tree.

Then she calls the merchant and, without returning the item, asks the store to refund the difference between her cost and the new sales price. She then gives the difference to the gift recipient.

"I once got my mother-in-law $60 back on a gift we purchased for her," she says.

Carter also claims the price guarantees offered by stores like Lowe's and Home Depot: If you find the same product for less elsewhere, you get the item for 10 percent off the lowest price.

"I have seen an ad for something I purchased, after the purchase, and I have been given the lower price," she says.

Keeping an eye on these promotions paid off recently when Carter bought a new refrigerator. After she saw an ad for the same refrigerator at a competitor's store, she netted close to $100 in savings with a single phone call. Her advice: Call, don't visit the store. In Carter's experience, a local store manager will always find a reason to say no.

Carter, an inveterate comparison shopper, also shops on home repairs. Recently, she bought a new Pella front door at Lowe's, spending $1,000 less than Pella's asking price. Then, rather than paying Lowe's $800 installation fee, she hired a local carpenter for $400 -- and paid that tab with the $400 tax credit she'll receive for installing the energy-saving door.

Stay-at-home mom Martha Andersen is an avid reader, as are her husband and her two children. Last year, Andersen, who lives in Durham, N.H., decided to spend only $4 per person on Christmas gifts.

She acquired most of her gifts through Paperbackswap.com, a site on which members can trade paperback and hardcover books for the cost of postage, and Daedalus, a discount book catalog that Andersen says offered "really nice gifts for less than $4." You can also swap CDs on SwapaCD.com and DVDs at recently launched SwapaDVD.com.
Melissa Ragan, a teacher in an inner-city public school in Lawrence, Mass., also loves Paperbackswap.com. She uses the site to get books for her special-needs classroom.

Ragan is also a Freecycle devotee. Freecycle.org, a membership organization with thousands of local chapters, helps people give away unwanted goods, such as brand-new baby clothes, computers and furniture, to other "freecyclers" so that it won't end up in landfills.

Most of the time, it's not worn-out Salvation Army merchandise. Not long ago, the Boston chapter featured an entire Ethan Allen living room set free for the taking. You can "ask" for something specific, and often, you'll get it. People frequently ask for exercise equipment, like treadmills, and find treasures within a day.

Not surprisingly, uber savers are also crazy about Craigslist.org. Chris Grande, a financial planner and managing partner of Heritage Financial Group in Medford, Mass. bought a $5,000 leather living room set for only $200 when he noticed the classified ad on his local Craigslist site.

2. Groceries

What does the high price of food mean to the average frugal grocery shopper? Eat locally. Produce, meat, poultry and eggs grown nearby have always been better for the environment. Now, because of high fuel prices, buying local is also the smartest way to shop.

Purchase produce in season and frequent farmer's markets, where you'll find the best deals on the freshest fruits and vegetables. Invest in a freezer, if you have the space, and buy your meat locally as well.

Uber saver Mike Hegarty, a CPA in Des Moines, Iowa, says he saves $500 a year on meat by purchasing whole animals from local farms.

In case you've never done it and you're having a hard time visualizing it in your garage, when you buy a quarter of a cow from a local farm, a butcher cuts it into the familiar hamburger, flank and sirloin steaks and packages it for you. An extra bonus: Local farms often raise all-natural or even organic beef, pork and chicken.

If you're really devoted to cutting your grocery bill, try buying through a co-op. To do this, you'll need to form a "buying club" with friends and neighbors; forming a group will allow you to order food at wholesale prices from co-op distributors like Associated Buyers in Barrington, N.H., or Rainbow Natural Foods in Aurora, Colo.

You'll need to put in some effort, says Erin Fallon, a Strafford, N.H., housewife who's been purchasing organic groceries through a co-op for years. One group member gathers orders and collects money; then the women meet at another member's home to divvy up food once a month. The effort is well worth it, though. Fallon says she saves $300 to $500 a month.

3. Automobiles

Need a new car? The good news is that with demand down, automakers are unlikely to raise their prices this year, says economist Gus Faucher with Economy.com.

When buying, take a tip from master saver Carter. Michele Carter and her husband, Richard, negotiate with dealers for each other's cars.

"Dealers have to get on the phone and actually negotiate with someone who is not emotionally invested in the purchase. So far, this has helped us not get taken," she says.
When Michele Carter fell in love with a 2006 Saab last year, she could see that the dealer wouldn't reduce the price for her "because they could see that I was sold on the vehicle." So she turned to Richard for help. He talked the dealer into reducing the price of the extended warranty by $1,000 and persuaded him to throw in Bluetooth for free. Carter was thrilled with her new car -- and the price.

A ream of information exists on how to get the best price on a new car. But what's the cheapest way to finance it?

Wellesley, Mass., financial planner Steve Doucette advises that you figure out which car you want and wait for the manufacturer's year-end zero percent financing deals.

Or consider buying a car at an auto auction. There are two kinds -- government-run auctions open to the public and dealer auctions, where used-car dealers get many of the cars they sell on the lot.

Financial planner Chris Grande admires a friend who bought a used Mercedes at a dealer auction, saving at least $4,000 in the process. In order to get access to dealer auctions, you'll need to go with a friend who has a dealer license and is willing to do a favor for you.

In addition to actual car dealers, tow-truck companies, auto body shops and others also have dealer licenses, Grande says.

4. Giving

Sarah Auerbach, a stay-at-home mother in Acton, Mass., and her husband, programmer Laird Nelson, like to donate to charities. But they're saving to buy a larger home.

Tired of reactively contributing in response to mailed solicitations, they visited their accountant for advice on how much to give annually. Then they listed several favorite causes and assigned weights to each -- for instance, 15 percent for women's rights, 10 percent each to several local hunger-fighting organizations, and so on. Then they did the math and figured out how much money they'd be giving to each of eight or 10 nonprofits.

To spread out the expense, they designated payments to one or two charities monthly.

5. Commuting and Housing

Hegarty, the Des Moines CPA, saves money in a variety of ways. He and his family clip coupons and turn off lights. But a self-proclaimed cheapskate, Hegarty believes the "small stuff" doesn't really pay off. It's the big stuff, like making wise choices about where to live, that really counts.

Hegarty and his wife, who have four children, chose to buy a $150,000 farmhouse some miles outside of the suburbs rather than living in "$250,000 to $350,000 yuppie neighborhoods with my friends," Hegarty says. "That saves us $1,500 a year in (property) taxes and $6,500 a year in mortgage interest."

Hegarty acknowledges, however, that living some distance away from town costs him an additional $800 a year in gasoline and additional wear on his car. The Hegarty family plans trips to town in order to run several errands at once. He figures this careful planning saves them $500 a year in gasoline.

Their choice to live in a modest house allows Hegarty's wife to stay home with their kids, rather than working full time for a $50,000 salary.
On the other hand, living close to town also can save you money. Uber saver Martha Andersen spends next to nothing on gasoline. She and her husband Peter chose to live in downtown Durham, a small New Hampshire college town, rather than buying a house in the suburbs.

"We can walk to restaurants and grocery stores, the library, the bank, the car service, church, friends and to my father-in-law's," she says.

Since oil hit $100 a barrel, saving on gas has become as important as getting a cheap mortgage.

Living in Exeter, N.H., Melissa Ragan and her husband, Alex, sold Melissa's 2006 Toyota Camry in January 2008 and became a one-car couple. They carpool together to work and Alex takes the train home. They're saving $725 a month -- a $400 car payment, $75 in insurance and $250 in gas and tolls.

Rochester, N.Y., scientist Wilton Alston also forgoes four wheels whenever he can. He bikes the 15 miles to and from work whenever the weather is good, saving money -- and burning calories -- along the way.

By far the most ingenious strategy for saving on gas and auto costs comes from Dean Frisoli, who "slugs" to work. Slugging is a form of legal hitchhiking available to commuters outside of Washington, D.C., where the traffic is notorious.

In order to take the faster high-occupancy vehicle, or HOV, lane to work, a car must carry two passengers. At designated parking lots, so-called "sluggers" like Frisoli, a transportation policy analyst, line up to catch free rides from drivers eager to use the HOV lane. In the year since he started slugging, reports Frisoli, the former train commuter has saved more than $2,000.

"Other than the ice storm the day of the Virginia primary, where it took me five hours to get home, it has been a completely painless experience," he says.

Chetan Shah, a vice president at Bank of America in Charlotte, N.C., advocates paying for parking with pretax dollars. Tax law does permit this.

"Most of us ... have to pay either for parking or a monthly bus or train pass," he writes. "You can pay it pretax by asking the company you work for to deduct it directly from your paycheck."

6. Phone Service and Other Necessities

Financial planner Grande starts his conversation on saving money this way: "I'm talking to you on Skype right now."

Skype is an Internet-based phone system that lets computer users make calls for free or for only a few dollars a month. You don't need an actual phone -- just a computer and, if you wish, a headset, which costs about $20 at Radio Shack or Best Buy.

Download Skype for free, and you can "call" other Skype users for nothing. Pay $3 a month and you can make unlimited calls to land line and cell phone users.

Grande started using it last year and says now his office pays only the minimum local charge for having a land line -- less than $30 a month.
He uses Skype when he travels, making phone calls from WiFi hotspots in other states and even in other countries. When he traveled to Singapore last year, he called friends in the U.S. for only two cents a minute.

To save on utilities, conserve energy. Get an energy audit, says Larry Chretien, executive director of Mass Energy Consumers Alliance, a nonprofit home heating company with offices in Jamaica Plain, Mass., and Providence, R.I.

When it comes to energy efficiency, Chretien says, "We honestly think every home is different."

In many states, electric and gas utilities offer energy audits at no charge, and some will even help homeowners pay for their recommended changes. When this reporter had her home audited, Public Service of New Hampshire paid $2,000, or more than two-thirds of the total cost of energy-saving improvements, like insulating and installing programmable thermostats.

Call your electric or gas company or search their Web sites for energy auditing programs.

7. Travel

Tostado, the uber saver from Dover, N.H., hoards credit card rewards points. When she turned 50 three years ago, she and her husband set a goal of running road races in all 50 states within 10 years. So far, they've managed 19 states. Those plane tickets could add up -- but not for them.

Their strategy? Never, ever use cash when you can use a credit card. They win multiple free flights a year by paying virtually all of their bills -- including groceries, utilities and their mortgage -- with a Southwest Airlines card.

They even buy Dunkin' Donuts gift cards on credit and use them to buy their morning coffee rather than "wasting" a couple of dollars' worth of points every day. The couple sets aside an hour a week to pay bills together and always pays the full credit card balance so that they never pay interest.

Doucette and his family can afford posh vacations, but sometimes the tab is just too high. When their traditional vacation choice, a Beaches resort, priced out at $8,000 to $12,000, the Doucettes decided to share their vacation. They and some friends rented a beachfront Jamaican villa, complete with chef and bartender, and spent less than $5,000 for the week.

If you're going to travel overseas, consider vacationing in Mexico, the Caribbean or even in Africa or Asia, where the dollar is stronger than it is in Europe.

To get the cheapest fares, use a service like FareCompare.com, which sends e-mails the instant a cheap fare becomes available for your destination of choice. Don't procrastinate buying that ticket -- the cheapest fares go to only about 10 percent of travelers.

Kenya violence grows after opposition leader slain

By TOM MALITI, Associated Press Writer

Gunmen killed an opposition lawmaker in Nairobi and government helicopters fired on crowds in the Rift Valley on Tuesday, the latest flare-up of the ethnic fighting that has gripped Kenya since its disputed presidential election.

Under increasing pressure to share power, President Mwai Kibaki and the opposition leader, Raila Odinga, formally opened negotiations but the two remained far apart on the vote outcome — an issue each indicates is not negotiable.

Odinga insisted what needed "the most urgent attention" was the resolution of the flawed election results. Kibaki deplored the fact that some Kenyans "have been incited to hate one another and view each other as enemies."

Former U.N. Secretary-General Kofi Annan is helping mediate the dispute and Tuesday's meeting.

"The people need you," he told them. "They want you to take charge of the situation and do whatever possible to prevent the downward slide into chaos that is threatening this country."

Mugabe Were, who was shot to death as he drove home, was among a slew of opposition members who won seats in the legislative vote held at the same time as the presidential election. The opposition, which won the most seats in parliament, accuses Kibaki of stealing the presidential vote.

After Were's death, groups of armed youths began gathering in two Nairobi slums. Sabat Abdullah, a slum resident, said a gang hefting machetes dragged a doctor from the president's Kikuyu tribe from his clinic "and then cut and cut until his head was off."

Similar scenes have convulsed western Kenya, where police in helicopters fired on crowds on Tuesday. Since the Dec. 27 election, the death toll across a country once among the most stable in Africa has soared to over 800. Much of the violence has pitted other tribes against Kikuyu, long resented for their dominance of Kenyan politics and business.

U.S. Sen. Barack Obama, the Democratic presidential hopeful whose father was Kenyan, appealed for peace on Nairobi's Capital FM radio station.

"Now is the time for all parties to renounce violence. Now is the time for Kenyan leaders to rise above party affiliations and past ambitions for the sake of peace," Obama said. "Most troubling are new indications that the violence is being organized, planned and coordinated."

In Washington, the State Department spokesman Tom Casey said the ongoing violence underscored the importance of negotiations.

"This is a political dispute and it requires a political solution. The two leaders have to come to some agreement on how that is done," Casey said.

Police said Were's death was being treated "as a murder but we are not ruling out anything, including political motives."

"We suspect the foul hands of our adversaries," Odinga said as he made his way Tuesday to Were's home, where dozens of protesters manned burning barricades of tires and uprooted telephone posts.

Kibaki condemned the killing, appealed for calm and promised police would act swiftly to ensure the perpetrators were dealt with severely.

In the Mathare slum, armed Luo men at a roadblock dragged a Kikuyu man from his car and attacked him with machetes, volunteer aid worker Fospeter Ouma said. "They slashed him so much. I think he must have died," he said.

Angry supporters of Were in the slum area of Dandora, the murdered politician's constituency, set fire to homes and shops owned by Kikuyus and brandished axes and machetes.

Police fired tear gas, and later live bullets, to disperse them, and beat them with clubs. An AP Television cameraman saw a policeman pursue protesters down a mud road, shooting at them with a pistol.

In Western Kenya's Rift Valley, about 5,000 people set fire to homes and smashed shop windows in Naivasha, dragging away goods. Five police officers fired into the air but were unable to control the turmoil. Naivasha's police chief tried to calm the crowd but was pelted with stones and fled in his car.

A police helicopter and two military helicopters then flew over the crowd and officers began shooting, sending people running in panic. A reporter saw two bodies with bullet wounds, but it was unclear whether they were shot by officers in the air or on the ground.

Reporters also watched the helicopters swoop down, with officers firing on a mob of armed Kikuyus pinning down hundreds of Luos outside the Naivasha Country Club. Kikuyus, armed with machetes and clubs inset with nails, had prevented the Luos from escaping for two days.

On Tuesday, police began evacuating them, and police chief Grace Kakai said the helicopters helped.

"There were very big crowds gathering and we had to disperse them so we used helicopter patrols. They were not firing at the crowd. We were trying to scare them, not hurt them," she said. Some 300 Luos were evacuated, she said.

The Rift Valley has seen some of the worst of the postelection violence. At least 90 people were killed there over the weekend.

Kibaki and Odinga blame each other for the violence, which has driven 255,000 people from their homes. The two men have traded accusations of "ethnic cleansing." Human rights groups and officials charge the violence has become organized.

Prosecutor seeks appropriate charges against trader

By JAMEY KEATEN, Associated Press Writer

A Paris prosecutor on Monday asked for preliminary charges of forgery, breach of trust and fraud against a low-level trader accused by Societe Generale bank of orchestrating the largest securities fraud ever by single person.

Prosecutor Jean-Claude Marin said Jerome Kerviel, 31, did not attempt to steal money from the bank or its customers, but was motivated by a desire to be "an exceptional trader" and that he sought performance bonuses.

Kerviel appears to have acted alone, Marin said.

"It's always a bit for money, I'm not sure that was his prime motive," said the prosecutor. "It functions a bit like a drug, it's an addiction ... there's a sort of spiral you can't get out of."

Kerviel told investigators, who just wrapped up 48 hours of questioning, that he expected a bonus of 300,000 euros ($441,150) for 2007.

Societe Generale said it lost 4.82 billion euros ($7.09 billion) after unwinding Kerviel's trades.

Kerviel was set to appear before a judge who will decide whether to proceed with preliminary charges.

Under French law, filing preliminary charges means the judge has determined there is strong evidence to suggest involvement in a crime and gives investigators time to ask for a trial.

The bank's offices were searched Friday and "masses of documents" including computer records were seized, Marin said.

CEO Daniel Bouton said Societe Generale, thought by some experts to be vulnerable to a takeover, has not been approached.

Bank shares fell nearly 4 percent to 70.94 euros ($104.32) Monday.

Meanwhile, questions about how the bank handled the fraud are mounting. A lawyer for a group of Societe Generale shareholders, Frederik Canoy, said a legal complaint had been filed Monday asking investigators to look into possible insider trading.

The complaint was filed after France's market watchdog said in a routine disclosure that a member of Societe Generale's board, Robert A. Day, sold 85.75 million euros ($126.1 million) worth of shares in the bank on Jan. 9 — two weeks before the fraud announcement and well before bank management says it knew about the problem. Day is an investment manager with U.S.-based Trust Company of the West, or TCW, who Forbes magazine says has a net worth is $1.6 billion.

Two foundations linked to Day, the Robert A. Day Foundation and the Kelly Day Foundation, also sold a total of 9.59 million euros ($14.1 million) worth of shares a day later, on Jan. 10, the market watchdog reported. Regulators have made no allegations of wrongdoing.

Telephone calls to both Day foundations and TCW were not immediately returned Monday.

Bouton rejected suggestions from Kerviel's lawyers that Societe Generale was using their client to hide big losses linked to the U.S. subprime mortgage crisis.

"How could you want to imagine that we would have been able to hide a hole by another hole? It's completely stupid," Bouton told Europe-1 radio. He called Kerviel a "remarkable concealer" who had managed to outwit the bank's risk control systems by toggling between real and fictitious positions.

"That's what created this gigantic fraud," he said.

Elisabeth Meyer, one of Kerviel's defense lawyers, said he was "bearing up to the shock."

She disputed Societe Generale claims that Kerviel had committed fraud, saying he was in the black with his trades as of Dec. 31.

"In my view, he was thrown to the lions before being able to explain himself," said Meyer. "It's a lynching."

Another lawyer, Christian Charriere-Bournazel, said on Europe-1 radio that Kerviel made a profit of 1.5 billion euros ($2.2 billion) before his bets went sour.

The prosecutor, however, said the trader only "virtually" made a profit for the bank.

Kerviel could face a maximum seven years imprisonment if convicted under the current charges, the prosecutor said.

A day after the bank sent out a five-page explanation of how the fraud unfolded, analysts still had many questions.

Societe Generale alleges that Kerviel used other people's computer access codes, falsified documents and used other methods to cover his tracks — helped by his previous experience in other offices at the bank that monitor traders. It says he bet some 50 billion euros ($73.53 billion) — more that the bank's market worth — on European markets.

Societe Generale Bank Uncovers $7 billion Fraud by Futures Trader

By Emma Vandore, Associated Press Writer

French bank Societe Generale said Thursday it has uncovered a 4.9 billion euro ($7.14 billion) fraud -- one of history's biggest -- by a single futures trader whose scheme of fictitious transactions was discovered as stock markets began to stumble in recent days.

CEO Daniel Bouton said the trader's motivations were "irrational," netting the trader no personal financial gains. Still, the bank is seeking to have him prosecuted in court.

A person familiar with the case named the trader as Jerome Kerviel. Bank officials said the trader was a Frenchman in his 30s who probably acted alone. The person spoke on condition of anonymity because of the sensitivity of the case.

The bombshell destabilized a major bank already exposed to the subprime crisis. France's second-largest bank by market value said it would be forced to seek euro5.5 billion (US$8.02 billion) in new capital.

Societe Generale filed a complaint Thursday with a court in Nanterre, west of Paris, accusing the trader of fraudulent falsification of banking records, use of such records and computer fraud, the bank said in a statement.

The Paris prosecutor opened a preliminary investigation Thursday based on a complaint filed by a small shareholder concerned about losses incurred because of the fraud, a judicial official said. The Bank of France, the country's central bank, said it was immediately informed of the fraud and was investigating.

Societe Generale's shares, which have lost nearly half their value over the past six months, were suspended in Paris on Thursday morning, then dropped 5.5 percent to 74.77 euros ($108.97) when they resumed trading.

The bank said it detected the fraud -- comparable to a full year of its profits in stable times -- at its French markets division the weekend of Jan. 19-20.

Once uncovered, Bouton said the bank alerted market regulators and moved immediately to close the trader's positions, incurring heavy losses amid sharp declines on world markets.

"This is a bad time for banks and the industry in general. But detecting the fraud over the weekend was problematic because world stock markets on Monday and Tuesday fell hugely around the world. When the positions had to be unwound, the bank did that in a terrible market of falling equities," said Janine Dow, senior director at Fitch Ratings financial institution group in Paris

"In hindsight, it was this guy's superior knowledge of the control system of every aspect of trading at the bank that allowed him to build up fraudulent positions and hide them," she said.

The bank said the trader had misled investors in 2007 and 2008 through a "scheme of elaborate fictitious transactions." The trader, who was not named, used his knowledge of the group's security systems to conceal his fraudulent positions, the statement said.

The man admitted to the fraud, the bank said, and was being dismissed. Four or five of his supervisors were to leave the group. Bouton offered to resign but the board rejected that.

The trader had worked for the bank since 2000 and earned a salary and bonus of less than euro100,000 (US$145,700), executives said.

"I'm convinced he acted alone," said Jean-Pierre Mustier, chief executive of the bank's corporate and investment banking, who interviewed the trader when the fraud was uncovered.

The trader was responsible for basic futures hedging on European equity market indexes, the company said. That means he made bets on how the markets would perform at a future date.

Until last year, the trader had been betting that markets would fall, but then changed his position at the start of this year to bet they would rise, said Kinner Lakhani, an analyst at ABN Amro in London who specializes in Societe Generale shares, citing the bank's management.

He said there had been "daily rumors" this week that something was afoot at Societe Generale. "The market was sniffing something," he said.

Because the trader previously had worked in trading accounting offices, "he would have known how the risk management worked," Lakhani added. In a conference call with analysts on Thursday, bank officials "talked about this guy bypassing systems and setting up false counter-trades."

Societe Generale said the trader was involved in "plain vanilla" forms of hedging. Futures trading began with selling commodities like sugar or oil to be delivered at a future date, but has expanded enormously to many kinds of extremely complex financial instruments.

The fraud appeared to be the largest ever by a single trader. If confirmed, it would far outstrip the Nick Leeson trading scandal in 1995 that forced the collapse of British bank Barings. Leeson, the bank's Singapore general manager of futures trading, lost 860 million pounds -- then worth US$1.38 billion -- on Asian futures markets, wiping out the bank's cash reserves. The company had been in business for more than 230 years.

The fraud was not as big as the 1991 scandal that led to the demise of the Bank of Credit and Commerce International. Claims by depositors and creditors there exceeded US$10 billion at the time. International bank regulators seized BCCI, which had headquarters in Luxembourg, London and the Cayman Islands, acting on auditors' reports that described huge losses from illegal loans to corporate insiders and from trading transactions.

Axel Pierron, senior analyst at Celent, an international financial research and consulting firm, was stunned that 13 years after the Barings collapse, something similar has happened.

"The situation reveals that banks, despite the implementation of sophisticated risk management solutions, are still under the threat that an employee with a good understanding of the risk management processes can getting round them to hide his losses," he said.

At Societe Generale, the announcement came on the back of 2.05 billion euros ($2.99 billion) in write-downs linked to subprime-related difficulties and the crisis in financial markets.

The bank is now planning a capital hike in the "following weeks" by selling shares in a rights offer underwritten by JPMorgan Chase & Co. and Morgan Stanley.

The write-down and losses will lead the company to post a net profit of 600 million euros to 800 million euros ($874 million to $1.16 billion) for all of 2007, the Paris-based bank said. Full-year results will be announced Feb. 21. In 2006, net profit was euro5.2 billion.

Associated Press writers Matt Moore in Davos, Switzerland, Thomas Wagner in London and John Leicester in Paris contributed to this report.

How to overcome 7 common tax terrors

Kay Bell

Admit it. You're afraid of your 1040. That's OK. A lot of us are. And our tax fears, sometimes irrational, sometimes warranted, cause us to do a lot of dumb things when it comes to our annual returns.

Some people put off filing, some don't file at all. But fear doesn't have to paralyze you. Here are seven common tax terrors, how real they are (or aren't) and how you can overcome them.

These fears paralyze many taxpayers, but Bankrate's solutions can help you move through them.

7 reasons taxpayers tremble

1. Afraid I can't do my taxes myself.
2. Afraid I'll overlook a tax break.
3. Afraid I'll make a mistake that will cost me money.
4. Afraid that my tax adviser is incompetent or a crook.
5. Afraid I'll get audited.
6. Afraid to e-file because my personal info could be lost or stolen.
7. Afraid to file because I can't pay.

1. Afraid I can't do my taxes myself
This fear, unfortunately, is too often justified. And it gets truer every year as federal lawmakers add provisions and pages year after year. The tax law publisher CCH Inc. notes that the 1913 tax code took up 400 pages in its "Standard Federal Tax Reporter." By 2007, CCH filled more than 67,000 pages of that document with tax law intricacies.

"The law is very complicated and filling out the returns is somewhat mind-boggling," says Robert Simon, partner at Eisner & Lubin in New York. "The media keeps telling everyone how difficult it is and people just get panicky. They sit down and start (the filing process) with all this in the back of their minds. I can understand why people would be afraid to do it."

Such fear, says Simon, is nothing to be embarrassed about. "If you ask congressmen who actually wrote the laws, many don't do their own returns," he says. "They're writing policy, not looking at it from an accounting point of view."

The way our tax system works also adds to this fear.

"Many people aren't good with numbers, then once a year they wind up trying to deal with numbers," says Simon. "Any other time you spend money, before you walk out you have someone there telling you what you owe. But when you're doing your taxes, you're doing it yourself. You're telling the government what you owe them."

The remedy: Don't be afraid to ask for help. You have lots of preparer options, from a personal accountant who can fill out your return and help you plan throughout the year to franchise operations that gear up between Jan. 1 and mid-April. If your tax situation is not overly complicated, computer software might be enough to help you file with a bit more confidence. Take a look at your tax needs, then find the tax assistance that best meets them.

2. Afraid I'll overlook a tax break
Even folks who are brave enough to tackle their taxes on their own often face this fear. Again, it's not an unreasonable one. And once again, those folks in Washington, D.C., feed this fear.

Take, for example, the alternative minimum tax, or AMT. This parallel tax system can be quite costly for millions of filers, but rather than make a permanent change to the law, for the last several years Congress has opted instead for a temporary "patch." Even worse, the 2007 law change was enacted so late, it will caused a lot of grief not just for us filers, but also for the Internal Revenue Service. The slow lawmaking process has forced the 2008 filing season to be delayed until mid-February for up to 13.5 million taxpayers.

The remedy: Accept that tax filing is going to take some homework. Before you start your return, check out the countless publications -- including Bankrate's Tax Guide, of course -- so you'll know exactly where this year's taxes might trip you up. Again, you also can turn to software or a tax pro for help in claiming all your possible tax breaks.

3. Afraid I'll make a mistake that will cost me money
This is a close relative of fear No. 2. But here, the fear is not of omission, but commission.

This includes things as simple as filing the wrong tax form. It happens. In trying to get through filing as quickly as possible, some folks opt for the easy, in this case, the 1040EZ, way out and end up cheating themselves.

Or they choose the incorrect filing status, such as single when they're eligible to file as the more tax-advantageous head of household. Those are just a couple of the many mistakes that filers make ever year.

The remedy: Slow down. No longer how long you wait to do your taxes, you still have time to do it right. Read the instructions. If you're using software, don't skip steps just to finish. Answer all your tax pro's questions. If he or she says to provide more information, then provide it. A little extra work and attention to detail could cut your tax bill or get you a bigger refund.

4. Afraid that my tax adviser is incompetent or a crook
You know you need help, but you're afraid that the person you turn to could be more of a hindrance. Unfortunately, sometimes this fear is well-founded.

The Government Accountability Office issued a report in April 2006 with the disturbing finding that in a limited study of commercial tax prep chains in major metropolitan areas, all the returns completed in those offices were wrong to some degree.

Then in April 2007, the IRS alleged that some Jackson Hewitt franchises filed bogus returns for clients, cheating the federal government out of $70 million. The agency obtained court orders to shut down 125 branch offices in Detroit, Atlanta, Chicago and Raleigh, N.C.

Even big name, high-dollar help sometimes produces unexpected tax costs. Remember KPMG? A few years ago that global accounting and consulting firm acknowledged that some of its tax shelters didn't meet IRS standards and agreed to pay the government millions to settle the inquiry. Last month, the law firm Jenkens & Gilchrist announced it was closing its offices across the U.S. in the wake of a nonprosecution agreement it reached with the IRS about tax shelters it offered clients.

By the way, the taxpayers who participated in those companies' questionable shelters ended up owing additional taxes and penalties.

The remedy: Everybody makes mistakes, even tax professionals. The key is to make sure you don't end up paying for your tax preparer's mistakes.

Start with the hiring process. Investigate several potential preparers and thoroughly check out each before you hand over your personal tax documents.

Once you're a client, don't take every recommendation at face value. Ask questions and make sure you understand the answers. Most of all, remember the adage "If it sounds too good to be true, it probably is." There are some tell-tale signs that a tax shelter is in fact a tax scheme that could cost you dearly.

5. Afraid I'll get audited
If fear No. 4 comes true, then this is definitely one to be scared of. Audit fears, however, tend to be much greater than actual audit realities. True, there are some red flags, such as excessive medical or charitable deductions, that might catch an IRS examiner's eye. But overall, the risk of audit is small -- about 1 percent of individual returns were audited in 2006.

So don't let fear of IRS questions keep you from filing. And definitely don't let it stop you from claiming legitimate tax breaks.

"If you're really doing stupid things on your tax return, expect to get audited. Deservedly so," says Enrolled Agent Eva Rosenberg, who is based in Southern California and the Internet's Tax Mama. "But if you're afraid to use a legitimate tax break because you're afraid you're going to be audited, stop it! Stand up for your rights. There's no reason to be afraid."

The remedy: Make sure you can show an IRS examiner why you filed as you did. This means keeping good records, especially if you're self-employed. People who work for themselves and file Schedule C with their returns tend to get scrutinized a bit more, so your business record keeping needs to be more precise.

6. Afraid to e-file because my personal info could be lost or stolen
Slightly more than half of us send in our returns electronically. But that leaves another 60 million, give or take a million, folks who still file the old-fashioned paper way. This fear is one of the contributors to that mind-set.

Yes, identity theft is a major issue. In fact, the IRS keeps careful track of e-mail phishing scams that falsely claim to be from the tax agency. And yes, hackers still manage to break into online financial data systems periodically.

The biggest problem the IRS has had in recent years, though, has been with such information left on laptop computers that were lost or stolen, not with someone compromising the government's online tax database. But that doesn't mean you should ignore Internet safety precautions.

The remedy: Any tax data transference requires two parties. Make sure the starting point of such a relay, your computer, is secure.

"You're one of the end points and the IRS server is the other," says Gary Morse, president of Razorpoint Security Technologies in New York. "Make sure that your personal machine is secure, that it doesn't have any viruses, Trojan horses or any other back-door access points that could be attacked."

This means installing a firewall and virus protection, either as software or a hardware barrier, and then updating it regularly.

Of course, says Morse, taxpayers still must trust the IRS to safely store our data, but at least e-filers can know they did their part in the security process.

As for data losses, almost every computer user knows the frustration of dealing with a crashed machine. Tim Margeson, general manager of CBL Data Recovery Technologies Inc., headquartered in Armonk, N.Y., points to an oft-repeated warning as the surest way to avoid this: Save and back up your files regularly. This is especially important for home PCs, even beyond tax season, because of what Margeson calls "the unique issues -- children and pets and food" -- that the machines face.

You don't need any fancy software to back up your data, says Margeson. "You can just copy the files the same way you copy other material, send it from 'my docs' to a CD or USB drive."

"There's no reason that a computer or data loss should cause filing problems," says Margeson. "The IRS doesn't really accept that as an excuse for a late or no return."

7. Afraid to file because I can't pay
The only thing scarier than filing taxes is what could happen if you don't file. The IRS penalty for not filing is actually worse than if you file but don't pay your tax bill in full.

If you owe tax and don't file on time, the late-filing penalty is usually 4.5 percent of the tax owed for each month, or part of a month, that your return is late. However, if you file on time but just can't pay your tax bill then, you'll generally face a late-payment penalty of only one-half of 1 percent of the tax owed for each month, or part of a month, that the tax remains unpaid.

The total nonfiling and nonpayment penalties could reach a cumulative 25 percent maximum penalty. But if you file your forms on time and then make arrangements to pay, you can avoid taking that hardest tax penalty hit.

The remedy: File! And file on time. If you can't afford to pay your full tax bill, send Uncle Sam at least a down payment. Even sending in an extension request with a nominal payment is better than not filing at all. Then worry about coming up with the cash.

"Never don't file," says Rosenberg. "There's no reason to put yourself in that position. File the return and establish a plan to deal with the consequences of not having the money."

You have payment options. Use a credit card to meet your tax debt, then pay it off as quickly as possible. Go with the card that has the lowest interest rate or a zero-percent rate if possible. The IRS also has payment plans. Though these add interest charges to your tax bill, at least you can be assured that you're meeting your filing and payment obligations.

Face your tax fears early
By now, you should be a little less anxious about that impending return. And by taking a few steps now, you should be able to completely overcome most of these fears by the time your next return is due.

Look at what caused your heart to race and your palms to sweat this filing season. With those fears fresh in your mind, map out a strategy to overcome them, starting now.

"Trying to pull things together at the end of year when you're not organized during the year is not a good idea," says Simon. "You need to plan throughout the year, not in April."

That way, when next tax season rolls around, fear won't be a factor.

Holiday Tipping - Who to Tip & How Much

A little holiday green can spread cheer for the rest of the year. Here’s a guide to tipping the right people the right amount.

By Liz Pulliam Weston

If you've made your holiday list and checked it twice, chances are you've still forgotten some folks: the service providers who are expecting holiday tips.

End-of-the-year gratuities can show these folks that you appreciate the work they do for you and thank them for helping your life run more smoothly. This extra cash may help foster loyalty and, in a few instances, prevent future problems (like a building superintendent who might become sulky).

If you want to get to the meat of whom you tip and how much, skip down a bit. The next section is for those of you still balking at the whole idea. I've learned a lot about holiday tipping since first writing a column about it a couple of years ago, including:

Some of you think I invented it. "Wow, what on earth are you doing??" one outraged reader wrote. "Get real and try to relate to the public, not just your own little rich community. I expect at least $20 to $50 please for giving you a much-needed service -- a wake-up call!!"

So I consulted etiquette expert Peter Post, who assured me that holiday tipping has been around a lot longer than I have and isn't an isolated phenomenon. The amounts and even who is tipped can vary from place to place, but holiday tipping is ingrained in American life.

"It's not a regional custom," said Post, author of "Essential Manners for Couples." "It's everywhere."

Many of you don't like it.

Like several others, one reader -- who called himself "Scrooge," no less -- opined against the whole idea of tipping, at holidays or otherwise.

"Classic one is a bartender expects a $1 tip on $6 bottle of beer," Scrooge wrote. "Why should he get a tip ... he didn't do anything special? He opened a fridge and pulled out a bottle of beer and opened it. Boy, he really worked hard for that one."

Yes, indeed, why shouldn't that bartender work for the pleasure of Scrooge's company? There's a head-scratcher.

But the anti-tipping crowd has good company. Judith Martin, author of "Miss Manners' Guide to Excruciatingly Correct Behavior, Freshly Updated" agrees that tipping in general is a "silly system" that "grew up haphazardly" so that some workers -- like the bartender, the waiter, the taxi driver -- expect tips while others performing similar functions -- psychoanalyst, airline attendant, bus driver -- get their compensation from their paychecks. She finds it puts too much power in the hands of not-always-fair clients.

That doesn't let you off the hook, though. The system's the system, Martin says; we tip because it's expected: "It would be Scrooge-like, not to mention wrong," she writes, "to deny these workers their expected income merely because one doesn't like the method by which this is provided."

Some of you want in on it.

I fielded a fleet of e-mails from readers who want some holiday generosity spread their way. Many mail carriers take offense at U.S. postal regulations that discourage tips, and one newspaper carrier thought the amount recommended by etiquette experts -- $10 to $30 -- was "an insult … (unless) the customer also tips during the course of the year."

Given that holiday tips are customarily given only to people who provide regular, repeated service, the most puzzling letter came from an appliance-repair person who wanted a customer-supplied bonus. Sir, if you're showing up regularly enough to be tipped, doesn't that say something rather negative about the quality of the service you provide?

But by far the biggest roadblock to holiday tipping is that:

Many of you think you can't afford it.

Post empathizes, and hastens to add that holiday tipping, and gift-giving in general, "isn't about going into debt." If your budget won't stretch, it won't stretch.

But that doesn't release you from your obligation. Post recommends that in situations where a holiday tip would be expected, the financially challenged compose a handwritten thank you note and include with it some kind of seasonal gesture, like a plate of holiday cookies. Superb service might prompt a praise-filled letter to the worker's supervisor.

Personally, I think there may be more room in people's budgets than they think. The average American consumer is expected to spend $90 on gifts for him- or herself this season, according to the National Retail Federation. A little self-restraint could help you express your appreciation for at least some of the people who help you during the year.

Who shouldn't expect a tip

Now that the debate portion of this column is finished, we can run through the shortlist of people you don't tip.

You'll be relieved to know that there are people who aren't expecting cash from you. That doesn't mean you can ignore them, though; it just means your gift shouldn't be green. These people include:

• Teachers: Professionals in general shouldn't be tipped, and teachers typically include themselves in this category. Ask what classroom supplies they need, and supply them. Gifts of food or a well-deserved day at the spa (perhaps purchased jointly with other parents) can be thoughtful, as well.
• Friends: Whatever the service they provided for you, a gift is a more appropriate thank-you than a check.
• U.S. Postal Service employees: The Postal Service discourages tips, but your mail carrier is allowed to accept gifts worth less than $20.
• Anyone who would be insulted: You'll have to feel your way on this one a bit, since some of the people you traditionally didn't tip -- a beauty salon owner, for example -- now often have no problem accepting your money.
  

  If you offer the cash and it's returned to you promptly, you'll know you've found one of these elusive folks.

  The ground rules for tipping

  How much you give, Emily Post and other etiquette authorities tell us, can depend on a number of factors, such as:
  
  • The quality of the service
  • The frequency of the service
  • How long you've used the service
  • Regional custom, and of course
  • Your budget

  Use your own judgment, but be guided by the spirit of generosity. The better you take care of the people who care for you, the better off everybody will be.

  Now that we've got that settled, let's move on to who, and how much.

  The "who's" break down into four basic categories:

  People who provide you service regularly but briefly

  These folks typically get $10 to $30. The list here can include:
• Newspaper deliverers
• Parking or garage attendants
• Trash collectors
• Any regular delivery person (for food, laundry, overnight packages, whatever)
  

  Several readers asked how they should handle holiday tipping when they get regular service from a company, but people actually providing the service change constantly. Post handles this by simply tipping whoever happens to show up on the day he's handing out the cash, and hoping that others do the same so that the holiday generosity gets spread around.

  People you see less often but for longer periods

  These are usually the ones who are working hard to tend you and yours. The holiday tip normally equals the cost of one visit, although you can reduce that to $20 or so if your patronage is sporadic.
  
• Hairdresser or barber
• Manicurist
• Facialist
• Personal trainer
• Massage therapist
• Regular after-hours baby-sitter (not your nanny or day care worker)
• House cleaner (unless he or she is full time, then see below)
• The lawn-care crew
• Pool cleaner
• Pet groomer
  

  If you use a day-care center, ask the director about appropriate tips for the child's primary caregiver. The accepted amounts can range from $10 to $70, plus a small gift from the child.

  Your employees

  Anyone you employ more than a couple of days a week gets a bigger check, typically at least equal to one week's pay. Exceptional or long service might boost the amount to two weeks' pay or more. A small gift is often appropriate as well. This list includes:
  
  
  • Nannies
  • Full-time housekeepers
  • Home-care attendants
  • Caretakers

  If you're not planning to tip your full-time employees, you need to ask yourself why. If you're genuinely not happy with their services, you should have long ago detailed your concerns and given them a chance to improve. Otherwise, withholding a holiday tip is sandbagging. You wouldn't like it if your boss surprised you with a negative evaluation out of the blue, so don't do it to others.

  People who can be strategically tipped

  All tips can have an element of strategy in them, but these gratuities can make a real difference in the quality of your life. Here the range varies enormously:
  
• Building superintendent: Ask around your building. The going rate can vary from as little as $20 to $200 or more.
• Doorman: Ditto. Usually the range is $10 to $100.
• The bartender, wait staff or maitre d' at a place you frequent regularly: Try $20 to $50 and see if your typical table location doesn't improve.

Talk back: Are you tipping this holiday? How much?

Seven ways to spot a liar on the job

By Ken Osborn

How many times has your business suffered because you trusted the wrong person? If you're like most people, you've been lied to thousands of times.

Deception hurts in many ways. There's the emotional stress from being betrayed, the loss of self-confidence and the increased suspicion or even paranoia. Not to mention the financial cost.

A deceptive supplier may promise that a shipment will arrive by your deadline, all the while knowing that delivery by the promised date is impossible. Trusting this supplier could cost your company thousands of dollars or more. Deceptions like this can be deadly to a growing business.

But you don't have to be a victim. Here are seven subtle cues that often mean a person isn't being completely honest with you.

1. Nose touch: We have erectile tissues in our noses, which engorge with blood when we lie. This causes a tingling or itching sensation that requires a nose touch to satisfy. The absence of a nose touch doesn't guarantee truth, but the presence of a nose touch often means deception. Of course, sometimes a person will touch his or her nose because of a non-deceptive cause, such as a cold. With some practice, you can quickly learn to distinguish a deceptive nose touch from something innocent.

2. Speech disturbances: When we lie, we force our brain to pretend that the lie is true, that the truth is a lie and simultaneously remember that the real truth is that each is the other. Are you confused? So is your brain when you lie. The process of deception taxes our cognitive ability to think efficiently. So when we lie, we pause longer and speak slower than normal and often experience speech disturbances that serve as gap fillers, such as "um," "er" and "ah." Train yourself to look for deception when you hear this kind of verbal cue.

3. Incongruent behavior: When our words and our body language don't agree, our communication is incongruent. Imagine that you ask a salesman if he can assure your delivery will be on time. If he explains how certain he is about it being on time while also shaking his head--as if non-verbally saying "no"--he is incongruent. When this sort of incongruence occurs, you would do well to believe the person's body over his words.

4. Neck rub: We rub our necks because of the stress we experience when we feel that an obstacle may be insurmountable. Let's say you're interviewing a potential employee for a key leadership position and the prospective employee verbally emphasizes his interest in the job. However he also begins to rub his neck when you explain the expected duties. This probably means he doesn't feel he'll be able to accomplish the duties. He might be wrong, but if we know anything about human psychology, it's that if someone believes that they can or can't do something, they're probably right.

5. Eye rub: An eye rub is an indicator of disbelief. Let's say you have an important computer keystroke sequence to teach a new employee. The employee begins to rub her eyes even while verbally affirming your statements. This probably means that she doesn't believe you or disagrees with your instruction. It would be wise to stop and ask a question to allow the employee to verbally object. Many subordinates feel uneasy about disagreeing with the boss, but their bodies don't hesitate. Perceiving a potential problem and dealing with it early can be the difference between a simple misunderstanding and a business disaster.

6. Upward inflections: We upwardly inflect our words when asking a question. You may have noticed that some salespeople will upwardly inflect certain statements of fact. This is a red flag that should alert you to potential deception. The salesman might say, "Your competitors have seen their profit margins increase by 30 percent by using our product." If you notice that he upwardly inflected the words, "30 percent," you should disregard this statistic and be suspicious of him altogether.

7. Stabbed hollows: In the study of graphology--or handwriting analysis--hollow letters represent honesty. Anything that disrupts a hollow letter could indicate deception. Let's pretend you enter your office to find a note from your top salesman on your desk. His note indicates that he had to go out of town to visit his sick mother and won't be able to go to the annual trade show. You notice that every "o" in his note has some sort of mark interjected into the hollow space of each letter. You would be right to be suspicious of the facts in the note and a phone call or meeting would likely expose some sort of deception.

With some practice, these new awareness tools will give you greater confidence in your perceptive ability and new peace of mind when deciding to trust others.

Profitable Jobs You Can Do From Home

Ysolt Usigan, ClassesUSA

In today's world of high connectivity, anyone can do virtually anything from home. In fact, the International Telework Association and Council reports that approximately 23 million people work at home at least part time, a number expected to increase as workplace technology becomes more and more seamless. If clocking in from your kitchen is the right choice for you, read on for telecommuting tips from successful home-office professionals.

Computer Software Production

Scott Testa knew that the competition for landing a convenient telecommuting job was tough, so he used education to distinguish himself.

After earning a Ph.D. in education through Drexel University's online program, Testa founded numerous software companies. He currently works from home as the chief operating officer of Mindbridge Software.

His biggest driver of success? The mindset that working from home must reflect the same initiative and motivation you would have if you were physically in the office. "Dress for work and keep the same hours you typically would in the office," he advises.

Marketing and Public Relations

Shannon Cherry, a marketing and public relations firm owner who does much of her work via e-mail, is accustomed to using the Internet for advancement -- she even earned her master's degree in communications administration from the University of Memphis online.

If you wish to secure an in-demand telecommuting position, Cherry stresses the power of effective communication. "It's important that you learn to brand yourself early on," she asserts. "That means you need to market your uniqueness."

Along with her master's degree, what distinguishes Cherry is her trustworthiness and reliability. "I suggest taking that a step further," she adds. "Market yourself by using stories or testimonials to clients or prospective employers. And network like crazy."

Financial Consulting and Sales

Anthony Shafer, a commercial finance consultant for LoanFight, Inc., usually works in his home office from 10 a.m. to 10 p.m., or even as late as 1 a.m. "With time differences, I have to get a hold of people at all hours of the day," he explains.

Shafer admits that TV can be a distraction, although it's actually a requirement for his job. "I keep CNBC on so I can follow the financial world," he says. Understanding the line between work and play is key to staying focused.

Also important are desire and devotion, says Shafer, who is currently working on his business information systems degree from DeVry Online. "You've got to be a salesman, and do it with a serious desire to please people," he says.

Graphic Design

Most graphic design work available to telecommuters is on a freelance basis, which means missing out on benefits like health insurance, steady salary, and job stability.

Jill Sabato, a recent graduate of the School of Visual Arts, tried freelance design projects when she was in between jobs. "When you've got bills to pay, it's not a good idea to count on the money you'll make from a project," she says. "Who knows when you'll get another assignment?"

If you do find a company with which you're comfortable, be sure to give your best. "If you freelance for a company that knows your work and is happy with it, stick with them," says Sabato. "Keep in contact so they know they can always count on you for projects."

Dry cleaner wins missing pants case

"Pants not worth $54 million" - Judge

By LUBNA TAKRURI, Associated Press Writer

A judge ruled Monday in favor of a dry cleaner that was sued for $54 million over a missing pair of pants.

The owners of Custom Cleaners did not violate the city's consumer protection law by failing to live up to Roy L. Pearson's expectations of the "Satisfaction Guaranteed" sign once displayed in the store window, District of Columbia Superior Court Judge Judith Bartnoff ruled.

"A reasonable consumer would not interpret 'Satisfaction Guaranteed' to mean that a merchant is required to satisfy a customer's unreasonable demands" or to agree to demands that the merchant would have reasonable grounds for disputing, the judge wrote.

Bartnoff ordered Pearson to pay the court costs of defendants Soo Chung, Jin Nam Chung and Ki Y. Chung.

Pearson, an administrative law judge, originally sought $67 million from the Chungs, claiming they lost a pair of trousers from a blue and maroon suit, then tried to give him a pair a pair of charcoal gray pants that he said were not his. He arrived at the amount by adding up years of alleged law violations and almost $2 million in common law fraud claims.

Bartnoff wrote, however, that Pearson failed to prove that the pants the dry cleaner tried to return were not the pants he taken in for alterations.

Pearson later dropped demands for damages related to the pants and focused his claims on signs in the shop, which have since been removed.

The court costs amount to just over $1,000 for photocopying, filing and similar expenses, according to the Chungs' attorney. A motion to recover the Chungs' tens of thousands of dollars in attorney fees will be considered later.

Chris Manning, the Chungs' attorney, praised the ruling, which followed a two-day trial earlier this month.

"Judge Bartnoff has spoken loudly in suggesting that, while consumers should be protected, abusive lawsuits like this will not be tolerated," Manning said in a statement. "Judge Bartnoff has chosen common sense and reasonableness over irrationality and unbridled venom."

Pearson did not immediately respond to a call and an e-mail seeking comment.

Surprising Jobs With Six-Figure Pay

By Steve McGookin

It's always been true that if you want to earn more money, you should think about going back to school.

But how many people realize that so many teaching posts could carry six-figure salaries?

According to the latest statistics from the U.S. Department of Labor showing average salaries for a range of occupations, six categories of teachers are included in the rankings showing jobs where the average of the top earners (the 90th percentile) is in excess of $100,000 annually.

They range from math teachers to those who impart knowledge about home economics. In math, for example, the official Labor Department definition of jobs done by those in that teaching category is "teach courses and/or pursue academic research pertaining to mathematical concepts, statistics and actuarial science and to the application of mathematics in solving specific problems and situations." So each teaching group specifically includes university and college lecturers at the postsecondary level, rather than high school teachers.

The data also show, of course, that the true average wage for all the teachers included in the data set is between $55,000 and $65,000 a year. But the ranking measure--the average of the higher-earning individuals in each category--puts teachers of certain subjects into the six-figure range.

In order of their average salaries for top earners, the subjects most in demand are computer science, sociology, psychology, mathematics, history, languages and home economics. In terms of numbers as defined, there are 44,570 math teachers and 36,630 computer science teachers, but just 4,330 home economics teachers.

Some of the occupations on the list probably won't seem that much of a surprise. For example, commercial pilots come at the upper end of this particular ranking, with a high-end average of just over $115,000, roughly the same as insurance sales agents. Those are the only two of the listed categories to exceed that average figure.

Market research analysts (those who "research market conditions to determine potential sales of a product or service [and] may gather information on competitors, prices, sales, and methods of marketing and distribution") come next, followed closely by real estate agents.

While commission-based jobs are obviously subject to greater fluctuations in income levels than those that have a graded salary structure, it is certainly interesting--given the often cyclical nature of the home sales market--that loan officers (in addition to real estate sales agents) are highly placed. A loan officer's job is to "evaluate, authorize or recommend approval of commercial, real estate or credit loans [and] advise borrowers. [The category] includes mortgage loan officers and agents, collection analysts, loan servicing officers and loan underwriters."

In terms of the connection between commission and income, also in the ranking--albeit lower down the scale, with a high-end average of $101,030 is the general category of "sales representatives" (definition: "sell goods, for wholesalers or manufacturers, to businesses or groups of individuals"). Sales representatives also make up the biggest single category by number, with 1,488,990 so defined by the Labor Department.

Coming in at the bottom end of the ranking is the category that includes the 3,330 employees defined as "farm, ranch and other agricultural managers." The Labor Department defines them as employees who "manage farms, ranches, aquacultural operations, greenhouses, nurseries, timber tracts, cotton gins, packing houses or other agricultural establishments for employers." Their high-end average is $100,050, just less than double the true average for all employees in that category.

New age town issues its own currency

By Scott Malone

A walk down Main Street in this New England town calls to mind the pictures of Norman Rockwell, who lived nearby and chronicled small-town American life in the mid-20th Century.

So it is fitting that the artist's face adorns the 50 BerkShares note, one of five denominations in a currency adopted by towns in western Massachusetts to support locally owned businesses over national chains.

"I just love the feel of using a local currency," said Trice Atchison, 43, a teacher who used BerkShares to buy a snack at a cafe in Great Barrington, a town of about 7,400 people. "It keeps the profit within the community."

There are about 844,000 BerkShares in circulation, worth $759,600 at the fixed exchange rate of 1 BerkShare to 90 U.S. cents, according to program organizers. The paper scrip is available in denominations of one, five, 10, 20 and 50.

In their 10 months of circulation, they've become a regular feature of the local economy. Businesses that accept BerkShares treat them interchangeably with dollars: a $1 cup of coffee sells for 1 BerkShare, a 10 percent discount for people paying in BerkShares.

Named for the local Berkshire Hills, BerkShares are accepted in about 280 cafes, coffee shops, grocery stores and other businesses in Great Barrington and neighboring towns, including Stockbridge, the town where Rockwell lived for a quarter century.

"BerkShares are cash, and so people have transferred their cash habits to BerkShares," said Susan Witt, executive director of the E.F. Schumacher Society, a nonprofit group that set up the program. "They might have 50 in their pocket, but not 150. They're buying their lunch, their coffee, a small birthday present."

Great Barrington attracts weekend residents and tourists from the New York area who help to support its wealth of organic farms, yoga studios, cafes and businesses like Allow Yourself to Be, which offers services ranging from massage to "chakra balancing" and Infinite Quest, which sells "past life regression therapy."

LOCAL PRIDE

The BerkShares program is one of about a dozen such efforts in the nation. Local groups in California, Kansas, Michigan, New York, Oregon, Pennsylvania, Vermont and Wisconsin run similar ones. One of the oldest is Ithaca Hours, which went into circulation in 1991 in Ithaca, New York.

About $120,000 of that currency circulates in the rural town. Unlike BerkShares, Ithaca Hours cannot officially be freely converted to dollars, though some businesses buy them.

Stephen Burkle, president of the Ithaca Hours program, said the notes are a badge of local pride.

"At the beginning it was very hard to get small businesses to get on board with it," said Burkle, who also owns a music store in Ithaca. "When Ithaca Hours first started, there wasn't a Home Depot in town, there wasn't a Borders, there wasn't a Starbucks. Now that there are, it's a mechanism for small businesses to compete with national chains."

U.S. law prevents states from issuing their own currency but allows private groups to print paper scrip, though not coins, said Lewis Solomon, a professor of law at George Washington University, who studies local currencies.

"As long as you don't turn out quarters and you don't turn out something that looks like the U.S. dollar, it's legal," Solomon said.

FULL CIRCLE

The BerkShares experiment comes as the dollar is losing some of its status on international markets, with governments shifting some reserves into euros, the pound and other investments as the U.S. currency has slid in value.

But the dollar is still the currency that businesses in Great Barrington need to pay most of their bills.

"The promise of this program is for it to be a completed circle," said Matt Rubiner, owner of Rubiner's cheese shop and Rubi's cafe. Some local farmers who supply him accept BerkShares, but he pays most of his bills in dollars.

"The circle isn't quite completed yet in most cases, and someone has to take the hit," Rubiner said, referring to the 10 percent discount. "The person who takes the hit is the merchant, it's me."

Meanwhile, Berkshire Hills Bancorp Inc., a western Massachusetts bank that exchanges BerkShares for dollars, is considering BerkShares-denominated checks and debit cards.

"Businesses aren't comfortable walking around with wads of BerkShares to pay for their supplies or their advertising," said Melissa Joyce, a branch officer with the bank, which has 25 branches, six of which exchange BerkShares. "I do hope that we're able to develop the checking account and debit card, because it will make it easier for everyone."

21 Stocks to Make You Rich

Kiplinger Magazine (Yahoo Finance)


Of the infinite number of possible stock-picking strategies, one that we particularly like can be summed up in three words: The pros know. In other words, ask the experts what stocks they're buying and you're likely to come up with some pretty good ideas. Last year, we asked seven top portfolio managers to name their favorites, and their 22 choices returned an average of 29% to May 14, well ahead of the 18% gain of Standard & Poor's 500-stock index (for more details, see Our Team Gains 29%).

Now we've rounded up a new group of outstanding managers using the same simple criteria we used to pick last year's bunch: They all have produced superior records, over both the short term and the long term. When these folks discuss their best investing ideas, it's worth listening in.

A Berkshire bent

Many a mutual fund manager has bolted to the free-wheeling, less-regulated, potentially more lucrative hedge-fund world. Whitney Tilson and Glenn Tongue have done almost the reverse. They launched their first hedge fund in January 1999 (it returned an annualized 11%, after fees, to May 1, compared with an annualized gain of 4% for the S&P 500). Then in March 2005 they unveiled Tilson Focus, a concentrated mutual fund that invests in undervalued companies of all sizes. It returned 20% over the past year.

Tilson and Tongue look for safety, low price and rapidly growing value when they shop for stocks. If this reminds you of a certain investor in Omaha, it's for good reason. "We admit to being loyal Buffett disciples," says Tilson.

No surprise then that Warren Buffett's Berkshire Hathaway (BRK-A) is Tilson Focus's largest holding. Tilson and Tongue see safety in Buffett's triple-A-rated holding company: "Its balance sheet is Fort Knox-safe," says Tongue. The value of Berkshire's operating companies in particular, such as Geico, Gen Re and Shaw Industries, is compounding at a furious pace. Tilson says that pretax earnings of Berkshire's operating companies swelled by more than 30% a year from 1995 through 2006.

And Tilson and Tongue reckon that the shares are still cheap. When they apply a modest price multiple to the operating businesses and add the value of Berkshire's cash, bonds and big stakes in publicly traded companies, such as Coca-Cola, Moody's and American Express, they arrive at an intrinsic value of $150,000 a share for Berkshire, a 36% premium to the stock price of $110,000 (Berkshire Class B shares change hands for a mere $3,668).

The story with McDonald's (MCD) is different. This is a remarkable turnaround that Wall Street has consistently underestimated. The stock price has tripled since Tilson and Tongue first bought shares for their hedge fund in December 2002. A stream of successful new-product launches, such as McGriddles, salads and premium coffee, has produced more revenues (sales at stores open at least one year surged a tasty 8.2% in March) through a fixed asset base, resulting in rapidly expanding profit margins. Tilson thinks the stock, recently $51, is worth at least $60 a share.

Mueller Water Products (MWA) is a more traditional deep-value pick. Spun off from Walter Industries late last year, Mueller is the leading maker and supplier of water-infrastructure products, such as fire hydrants, valves, couplings and transmission pipes. The stock, which sells at a small premium to book value (assets minus liabilities), has been depressed by the housing recession. But the water infrastructure in the U.S. is in urgent need of repair or replacement, so Tilson thinks it's just a matter of time before Mueller's flow of profits increases. He sees more than 50% upside in the stock, recently trading at $16.

Overseas and out-of-favor

Since launching Causeway International Value fund in 2001, Sarah Ketterer hasn't been afraid to go against the grain. She favors companies that are attractively priced because of temporary difficulties, and she will take large positions in a country or sector if the fund's strict stock-picking regimen determines that's where the values are. With a $5-billion portfolio of large-company stocks, the fund seemingly has lots of room to grow. Yet Ketterer closed it to new investors to retain the flexibility to move back into midsize companies when prices in that segment moderate. Investors who got in before the doors were locked have been rewarded with a 17% annualized return over the past five years, which was achieved with relatively low volatility.

One of Ketterer's top picks, Sanofi-Aventis (SNY), illustrates how she achieves those low-risk returns. Shares of the Paris-based drug giant have fallen about 9% since July 2006 because of concerns about generic competition and delays in the launch of its anti-obesity product, Acomplia. But a rich pipeline of 65 potential drugs should ensure strong earnings growth in coming years. Meanwhile, says Ketterer, the company should generate a staggering $55 billion in free cash flow (cash left over after paying bills and reinvesting in the business) over the next five years, which should support the share price, recently $46. The company could use the cash to repurchase shares and to bolster its dividend. "The downside is practically nil, barring the unexpected," Ketterer says.

A somewhat riskier pick is Ericsson (ERIC), which built the infrastructure that handles 40% of the world's mobile-phone calls. The Swedish telecom-equipment giant should benefit from strong expected growth in mobile traffic over the next few years. But it operates in an inherently volatile business, and the declining value of the dollar hurts profits earned in the U.S. and in Asian countries with currencies pegged to the greenback. Still, "the stock is too undervalued to ignore," says Ketterer. The shares, at $38, could return 15% to 20% annually over the next couple of years, she says.

HSBC (HBC), the London-based banking giant, has taken its lumps from a subsidiary involved in the foundering U.S. subprime-mortgage business. But with a price-earnings ratio of 13, says Ketterer, it's "quite a bargain for a company that operates globally and with a strong Asia business that is expected to produce earnings growth of 20% to 30% a year." What's more, she adds, the bank is overcapitalized, meaning there's plenty of cash available for paying dividends and buying back stock. Even now, the shares yield a generous 4.3%.

Great companies with principles

Nicholas Kaiser has steered Amana Trust Growth fund to market-beating performance over the past ten years, even though he is, in effect, working with one hand tied behind his back. The fund invests according to Islamic principles, so it must avoid financial stocks and companies with high debt (because of a prohibition against collecting or paying interest) as well as businesses associated with liquor, gambling and pornography. As a result, about half of the U.S. stock market is off-limits. Despite these restrictions, Kaiser has delivered excellent returns: an annualized 14% over the past decade, compared with 8% for the S&P 500.

One of Kaiser's favorite picks is Apple (AAPL). He began buying the computer and iPod maker several years ago at $14 a share, and he still likes it at $109. Yes, the shares look pricey at 30 times expected 2007 earnings, but the P/E has actually been falling as Apple's bubbling product pipeline has churned out one hit after another. Apple's earnings in the first quarter of 2007 soared 85% over the same period a year earlier, well beyond analysts' expectations.

Kaiser believes the company can keep up this impressive performance. He cites the release this year of a new generation of power-hungry digital-design-and-imaging software programs from Adobe. The software, he says, will provide a major boost to sales of Apple's high-end Mac Pro workstations, which start at $2,500. "Every media desktop jockey is going to want to have one of those things," he says. This summer's release of the long-awaited iPhone and the fall debut of the Leopard operating system are further hits in the making, he says.

Kaiser holds a slew of transportation stocks in the fund, and one of his favorites is UPS (UPS). Although its U.S. package-delivery business provides nearly two-thirds of revenues, it faces fierce competition. What excites Kaiser is UPS's logistics business, which offers services ranging from consulting to running a company's entire shipping program. Although it generates just 17% of UPS's revenues, "it's the growth engine," says Kaiser. A $1.68 annual dividend provides a nice 2% yield on UPS's shares.

Clean energy is not one of Amana's mandates, but that doesn't stop Kaiser from endorsing FPL Group (FPL), a Florida utility that's one of the world's largest producers of electric power from wind. Although Kaiser views the utility's emphasis on renewable energy as a plus, he is mainly attracted by its growing customer base, which encompasses about half of Florida's population, and its unregulated wholesale business, which sells low-cost power generated from nuclear plants and other sources. FPL has a "good, steady flow of earnings, an increasing dividend, and it's something we know makes money," he says. The $1.64 dividend has grown nearly 10% annually over the past three years and provides a 3% yield.

Growing and reasonably priced

Most of the high-flying funds that returned 100% or more in 1999, the last year of the tech bubble, have long since crashed and burned. One exception is Turner Emerging Growth. The fund, which focuses on small, fast-growing firms, followed a 144% leap in 1999 with gains of at least 10% in every year except 2002, when it lost 20%. Its annualized 14% return over the past five years easily beat that of the Russell 2000 Growth index. (The fund is closed to new investors.)

Manager Frank Sustersic looks for companies with annual revenue growth of at least 10%, scrutinizing them for weaknesses in their business models. He's also sensitive to price; he dislikes P/Es that are higher than a company's growth rate. That kept the fund out of trouble when the tech bubble burst.

One of Sustersic's top picks is Parexel International (PRXL), among the world's largest providers of clinical research for pharmaceutical and biotech firms. The industry is experiencing "phenomenal growth," in part because the U.S. Food and Drug Administration is requiring more clinical tests, says Sustersic, a health-care analyst by training. Parexel, based in Waltham, Mass., operates in 36 countries and has a backlog of orders totaling more than $1 billion. Its U.S. operations have historically been unprofitable, but Sustersic says that's about to change -- one reason he likes Parexel despite its high P/E of 27 times this year's expected earnings.

Another firm benefiting from a hot market is Ladish Co. (LDSH), a maker of jet-engine parts and other aerospace products. The industry is experiencing a burst of growth, spurred in part by major new jetliners from Boeing (787 Dreamliner) and Europe's Airbus (A380). Like Sustersic's other favorites, Ladish has a healthy backlog -- more than $500 million worth of business. Its shares stumbled, though, after an earnings disappointment in the fourth quarter of 2006 that Sustersic attributes to a plant-maintenance closing that lasted longer than expected. As a result, the shares are selling for a relatively modest 18 times estimated 2007 profits.

Sustersic's third pick, Bucyrus International (BUCY), also made our list last year. The South Milwaukee, Wis., company manufactures large-scale excavation equipment for the surface mining of coal, copper, oil sands and other minerals. Weakness in coal prices has hung over the shares for the past year. But the long-term demand for coal is robust, and the firm has an order backlog of nearly $900 million, up from $659 million a year earlier. "I love firms that have good earnings visibility from a stable or growing backlog," says Sustersic. The stock trades for about 22 times this year's expected earnings, and analysts expect profits to grow by 33% this year and 28% in 2008.

Growth Franchises

Although most growth managers have been mired in a severe slump the past several years, Alex Motola, of Thornburg Core Growth, has maintained a high batting average. During the past three years, his growth fund, which invests in companies of all sizes, has returned an annualized 22%, more than twice the performance of the benchmark Russell 3000 Growth index. Motola says he searches for highly sustainable, growing franchises that are selling at reasonable prices and that are not subject to constant technological innovation or price competition.

His largest position is in Amdocs (DOX), a billing-software and customer-care provider for the telecommunications industry. Clients such as Sprint Nextel and Bell Canada hire Amdocs to install software and operate billing and customer-care applications. Between Amdocs' rising profit margins and recovering stock values in the telecom sector, Motola still sees good upside in the shares, which trade at 17 times estimated profits.

In Las Vegas Sands (LVS), Motola says he's making the rare exception of paying up for a pricey stock: The casino operator sells at 55 times estimated 2007 earnings. Motola anticipates a rising tsunami of earnings and cash flow starting in 2008. "The value is wrapped up in licenses and in Sands' ability to execute," he says.

Sands' founder and controlling shareholder, Sheldon Adelson, is successfully exporting his brand and expertise to Asia, Motola says. The septuagenarian hit the jackpot with Sands Macau. Las Vegas Sands will own or operate seven of ten new properties on the Cotai Strip, a Macau landfill project under construction. "Chinese have a high propensity to gamble," says Motola, who calculates that one billion people live within three hours' flying time of Macau.

Motola also likes the global footprint and powerful brand recognition of Western Union (WU), the venerable money-transfer outfit. A recent spinoff from First Data, Western Union has an unmatched network of 260,000 agents around the world and leadership in a highly fragmented industry. Motola says the company is a play on immigration and the increasing global migration of labor; Mexican immigrants use the network to send money back home, Filipinos working in the Persian Gulf send savings back to the Philippines, and so on. A strong cash generator, Western Union trades for 19 times this year's expected earnings.

Overseas stock shopper

If Alex Motola is one of the best young growth managers in the mutual fund business, David Winters is one of the top young value-investing practitioners. Winters learned his craft at Mutual Series, at the feet of a master, Michael Price. A couple of years back, Winters left his post as chief investment officer of Mutual Series to start his own fund, Wintergreen. Over the past year, Wintergreen returned 20%.

Winters says he's on a "global shopping expedition" and is finding the best deals overseas. One of his favorites is U.K.-based Anglo-American (AAUK), "an incredible treasure trove of assets that can't be duplicated." Winters enthuses over Anglo-American's rich diamond and platinum deposits. The metals-and-minerals giant holds a 45% stake in privately held DeBeers, which "has done a spectacular job convincing women, and the men who love them, that they need diamonds," he quips. Winters figures that hundreds of millions of aspirational Chinese women, trading up from jade jewelry, are potential diamond customers.

An adept numbers-cruncher, Winters looks for undervalued assets and an alluring discount to his assessment of a company's true value before he purchases a stock. But he also zeros in on quality of management. "People matter," he says. "In general, the best investments and worst investments are because of people." Winters looks for executives who focus on building a business's value.

Winters loves the management of Canadian Natural Resources (CNQ), a petroleum company with a large stake in the oil sands of Alberta. Led by Murray Edwards, a team of managers has acquired large oil reserves cheaply. If oil prices don't budge, Winters figures Canadian Natural will still do fine. Plus, managers own $1 billion of company stock. "They're in the boat pulling the oars in the same direction as shareholders," notes Winters.

He also admires the managers of Imperial Tobacco (ITY), which has "done a spectacular job for shareholders." A spinoff in 1996 from Hanson, a British conglomerate, Imperial has made intelligent acquisitions of cigarette brands and consistently returned capital to shareholders through higher dividends and share repurchases. Winters doesn't smoke, but he seems to have an addiction to tobacco stocks, which accounted for 21% of Wintergreen's portfolio at the end of 2006.

Pleasure Picker

Sector funds tend to be streaky and volatile. Mark Greenberg's AIM Leisure is an exception. Over the past decade, it returned more than 15% annualized, nearly double the market's return, with impressive consistency. Greenberg, who started following the leisure business -- what he calls "all the fun stuff in life" -- in 1983, picked an alluring sector. In the U.S., Europe and Asia, consumer spending on such non-necessities as travel, alcoholic beverages and movies routinely grows faster than the overall economy.

One of Greenberg's favorite stocks is Diageo (DEO), the largest owner of liquor brands, including Smirnoff and Tanqueray. "When you're at the bar, you say 'Captain Morgan,' not rum; 'Johnnie Walker,' not Scotch," says Greenberg, who worked as a hotel bartender while in college in Milwaukee. "When liquor is mixed, you can't even tell what you're drinking." It doesn't cost much more to distill branded liquor than generic, but Diageo can sell Johnnie Walker for several dollars more per bottle. The difference shows up in Diageo's robust cash flow and steadily rising dividends.

No matter what you think of Rupert Murdoch's politics, there's no denying that he runs a potent media shop in News Corp. (NWS) Greenberg says Murdoch has been particularly adept at seizing international opportunities and harnessing the Internet (MySpace was a clever acquisition) for cross-marketing purposes. Fox has the highest profit margins of any Hollywood studio, says Greenberg, and the Fox Network churns out popular TV hits with global appeal, such as The Simpsons and American Idol. Shares of News Corp., which has disclosed that it wants to buy Dow Jones, recently traded at 17 times Greenberg's forecast for 2008 earnings.

His final pick exemplifies the discretionary spending of a leisure society: the fast-growing pet-store chain PetSmart (PETM). "It's amazing how much people love their dogs and cats," says Greenberg. The pet industry is growing twice as fast as the economy, and Americans pamper their little friends (dog-and-cat hotels are one of PetSmart's expanding businesses). PetSmart and privately owned Petco are the category-killers in this industry, elbowing aside tiny neighborhood pet shops.