Billionaire Warren Buffett weighing choices for '08 endorsement

By JOSH FUNK, AP Business Writer

Someday soon, Warren Buffett may have to apply his legendary stock-picking skills to the candidates clamoring for his endorsement in the 2008 presidential race.

For now, the plainspoken Nebraska billionaire appears to be enjoying his role as an unaffiliated kingmaker, raising money for Democrat Hillary Rodham Clinton while promising to do the same for her chief rival, Barack Obama. He's even heaped praise on New York Mayor Michael Bloomberg, who recently left the Republican Party and might join the race as an independent.

"As the markets often would follow Buffett's investments, I think that same mentality would follow his political activities, too," said Joseph Marbach, a Seton Hall University political science professor.

An outspoken critic of economic inequality in the U.S., Buffett is using his newfound political prominence as a platform to speak out on the obligation of the privileged to help the poor.

The 76-year-old Buffett is one of the world's wealthiest men, ranked third by Forbes Magazine behind Microsoft founder Bill Gates and Mexican telecom magnate Carlos Slim.

In 1956, armed with $105,000 raised from a handful of friends and relatives, Buffett founded the investment company now known as Berkshire Hathaway. Today, the company has assets of nearly $262 billion and owns more than 60 subsidiary businesses including insurance, clothing, candy and furniture.

In 2003, Buffett served as a top economic adviser to Republican Arnold Schwarzenegger's first campaign for California governor, but he advised Democrat John Kerry's presidential campaign a year later. He's also been active in several Nebraska contests.

When it comes to investing dollars in candidates, Buffett clearly favors Democrats. He's donated $65,600 to federal candidates since 1992, almost all of it to Democrats with a handful of contributions to moderate Republicans like Connecticut Rep. Chris Shays, according to Federal Election Commission records available through the nonpartisan Web site opensecrets.org. He gave $4,000 to Clinton's Senate campaign in 2000, and $5,000 to Obama's political action committee, Hope Fund, in 2005.

Buffett's political involvement reached a new level this year, as he began more forcefully criticizing the Bush administration's foreign and tax policies.

Buffett helped Clinton pull in at least $1 million at a New York fundraiser last month, and has said he would do the same for Obama later this year. But in a recent Time magazine interview, he also said he dreamed of a Bloomberg-Schwarzenegger presidential ticket.

"That would be one hell of a team, wouldn't it?" he said.

Buffett's political views have at times been controversial in the business world, particularly on the subject of taxes. He's made no secret of his belief that rich people have a duty to pay more taxes and that President Bush and Republicans in Congress have erred by pushing tax cuts for the wealthy.

"If you're in the luckiest 1 percent of humanity, you owe it to the rest of humanity to think about the other 99 percent," Buffett told attendees at the Clinton fundraiser.

On Friday, Clinton's campaign announced her support for cracking down on a tax loophole known as "carried interest" that allows some Wall Street investment managers to pay lower tax rates, citing concerns raised by "many finance and tax experts, including billionaire financier Warren Buffett."

In 2003, Schwarzenegger had to distance himself from Buffett after the billionaire was quoted criticizing Proposition 13, California's landmark initiative that keeps property taxes artificially low. The measure is revered by Republicans and many homeowners in the state, but it has also been blamed for badly underfunding public schools.

"I told Warren if he mentions Prop. 13 one more time he has to do 500 sit-ups," Schwarzenegger said at the time.

Dubbed the "Oracle of Omaha" by his many admirers, Buffett is revered in the business world. His annual investment lecture draws at least 25,000 people to Omaha.

Buffett grew up a Republican like his father, Howard, who represented Nebraska's 2nd District in Congress from 1943-49 and 1951-53. The younger Buffett switched parties during the early 1960s, saying his views on civil rights aligned more with Democrats.

Andy Kilpatrick, the stockbroker who has chronicled Buffett's life in "Of Permanent Value: the Warren Buffett Story," said Buffett's political activity seems to be attracting more attention now than it has in the past.

Kilpatrick attributed the new interest in part to Buffett's growing visibility as a philanthropist, particularly his plan to donate most of his fortune to the Bill & Melinda Gates Foundation.

While carefully withholding a formal endorsement, Buffett has said he'd be happy with either Clinton or Obama as president. Federal Election Commission records show that Buffett donated the maximum $4,600 to Clinton's campaign in January, while no donations to Obama have yet been reported.

University of Nebraska at Omaha political scientist Loree Bykerk said Buffett's reluctance to officially back either Clinton or Obama suggests he still believes the race for the Democratic nomination is wide open. When he does decide, Bykerk said, the endorsement will carry that much more weight.

"Insofar as he's seen as to be an excellent decision-maker, very competent, down to earth, and with Middle American values, there's almost no downside to that endorsement," she said. "He's a name almost anyone would be happy to be associated with."

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.

Currency impasse overshadows U.S.-China deals

Reuters

The United States and China struck civil aviation and financial sector access deals on Wednesday but they made no headway on the divisive issue of Chinese currency reform, stoking anger on Capitol Hill.

Lawmakers said they would move ahead with proposals to slap tariffs on Chinese imports because of Beijing's reluctance to redress the huge trade imbalance between the economic giants with a revaluation of the yuan.

The anger in Congress overshadowed U.S. Treasury Secretary Henry Paulson's claim of "tangible results" in the second leg of a "strategic economic dialogue" with Chinese Vice Premier Wu Yi.

Wu, for her part, said the "complicated" relations between Washington and Beijing needed careful handling and cautioned against retaliatory steps.

"It calls for direct consultation and dialogue between us, instead of easy resort to threat or sanctions," Wu said after two days of closed-door talks with Bush administration officials.

The official China Daily newspaper said in an editorial that both countries bore responsibility for the trade gap between them and warned against U.S. impatience for a rapid cure.

"The dialogue made it clear that a confrontational approach focusing on so-called immediate results only complicates the situation and adds nothing to problem solving," it said.

China's stellar economic growth was indeed too dependent on exports, the daily said, but it was also "all too obvious that the U.S. consumers spend too much and save too little, resulting in their country's current account deficit."

Tension was heightened during the talks by mounting concern about the safety of Chinese exports after reports about toxic toothpaste and contaminated pet food.

U.S. officials said they stressed to their Chinese counterparts that food and medicine safety was a "top concern."

"Recent events have forced very clearly as one of our top concerns the safety of food and medicine," Health and Human Services Secretary Mike Leavitt said.

CHINA "DOING ITS BEST"

The most concrete outcome of the talks was a deal committing China to remove a bar on new foreign securities firms and resume issuing licenses for securities companies, including joint ventures, in the second half of 2007.

That was a coup for former Goldman Sachs chairman Paulson, who has made gaining greater access to the Chinese financial sector a key objective.

The two sides also agreed on a new aviation pact that U.S. transportation officials said would more than double the number of passenger flights between the two countries by 2012.

Meanwhile, Chinese Vice Commerce Minister Ma Xiuhong said a Chinese business delegation on a 24-state U.S. tour had signed $32.6 billion in deals so far.

The buying spree appeared timed to soften U.S. congressional criticism of China's practice of managing its currency, the yuan, in a way that U.S. lawmakers and companies complain makes Chinese products unfairly cheap in U.S. markets.

But the chairman of the powerful House of Representatives Ways and Means Committee, New York Democrat Charles Rangel, said after a meeting between Wu and committee members that "we're moving forward" on tariff legislation.

Rangel favors a bill to let the Commerce Department levy duties on Chinese goods to offset the "subsidy" effect of China's exchange-rate policies.

Rangel's swift decision suggested that time was running out for Paulson to show that persuasion is sufficient to get China to permit the yuan to appreciate more quickly.

In July 2005, China abandoned an 11-year-old practice of holding the yuan fixed against the dollar and revalued it by 2.1 percent. But since then it has risen only a further 6 percent, frustrating U.S. legislators.

The head of China's central bank, Zhou Xiaochuan, said China had pressures of its own to deal with that made it hard to speed up currency reform.

"They may think that we can accelerate the speed of reform, but we think that we already try our best, and domestically we have pressure to slow down," Zhou told reporters after meeting the lawmakers.

China remains an emerging-market economy only partly driven by free-market forces, but its cheap labor force and exporting prowess have enabled it to become the world's fourth-largest economy, behind the United States, Japan and Germany.

6 Signs Your Bank is Evil

We knew there were going to be fees. But booby traps? Here's how to fight back.

By Liz Pulliam Weston

Banks have to make money to stay in business. I was an economics major, so I get that.

What I don't get is why so many consumers do nothing as banks get bolder and bolder about picking their pockets. It's no longer nickel-and-diming -- we're losing $10, $20 and $30 a pop as banks come up with ever-more-creative ways to "fee" us to death.

The banking industry collects more than $50 billion a year in various service charges, more than twice the total of a decade ago. It's time we pushed back.

Sometimes just shining the light of scrutiny on these policies is enough to get banks to back down; read below about what happened recently with ING Direct bank. Other times, we need to protest, involve our lawmakers or even move our money elsewhere.

Here are some of the most egregious practices, and what you can do about them:

Checks clear almost immediately; deposits take days

In recent years, changes in federal laws have all but eliminated "float" -- the time it takes for a check to clear from the writer's bank account. What used to take days now often takes hours or less. What hasn't been speeded up is the time it takes for deposits to clear and be available for your withdrawal.

The Fed is required by law to reduce maximum deposit hold times as check-processing gets faster, but it recently decided against requiring banks to make deposits available sooner. Essentially, regulators concluded that even though money disappears from your account a lot quicker these days, it still doesn't disappear fast enough to warrant the extra costs banks might face from crediting you with your deposits more quickly. So: Heads you lose, tails the banks win.

What you can do: Kick up a fuss with your lawmakers. Banks make billions from consumer accounts; they should be required to invest some of that in speeding up deposits. (You can locate your U.S. representative here and your senators here. You'll find telephone numbers, addresses and e-mail addresses on their individual pages.)

Stacking the deck against you

Most big banks, and many smaller ones, process checks that arrive the same day in order of their size, with the largest check processed first. Banks say they do this to increase the odds that consumers' most important checks, such as mortgage and car payments, get paid. Consumer advocates say it's simply a way to jack up overdraft fees, which make up the majority of account service charges that banks collect. Here's how it works: Let's say you have $500 in your account, and you write checks for $10, $55 and $450. If the bank processed from smallest to largest, only one overdraft fee would be generated. By processing them from largest to smallest, two bounce fees can be collected.

What you can do: Obviously, you should try to avoid writing checks when there's not enough money in your account to cover them. But even the most conscientious consumer can get tripped up now and then (especially if there's a hold on your deposits, or if the bank messes up -- as mine did recently by processing a $403.50 transaction as $4,035.00). So sign up for overdraft protection that links your checking account to a savings account or line of credit; the fees and other costs involved are generally much lower than when you bounce a check. If you do get hit with an overdraft free, ask your bank to waive it as a one-time courtesy.

Charging for 'potential' overdrafts

(Note to readers: This section has been rewritten to clarify how Wachovia Bank assesses bounced-check fees.) A poster named haberschmidt recently alerted the blogosphere to the way Wachovia Bank increases bounced check fees. Some of the poster’s charges are incorrect, according to bank spokeswoman Mary Beth Navarro, including his assertion that Wachovia deducts bounce fees before processing transactions that overdraw an account. Each night, Navarro said, Wachovia first credits deposits, then deducts all transactions that have posted, and then finally assesses bounced-check fees.

But Navarro confirmed that the bank does assess bounced-check fees when transactions exceed an account’s “available” balance, even if the real balance in the account is actually high enough to prevent an overdraft.

Here's how it works: You use your debit card like a credit card at a store, signing your name to the transaction instead of entering a personal identification number (PIN). Because this is a signature-based transaction, the money is processed through the credit card payments system, which means the cash takes a few days to actually leave your account.

Banks typically don't wait, however, to deduct the transaction from your so-called "available balance" -- the money that's available for other spending. Where Wachovia differs from many of its banking brethren is what happens when other transactions are processed that exceed this "available balance." With many banks, you won't get a bounced-check fee unless you exceed the actual balance in your account. With Wachovia, you can wind up with a fee if you exceed the "available balance" -- even if you actually have enough money in your account to cover the transactions.

What you can do: As above, it's important to closely monitor your accounts and to keep a pad of cash in them (read "Why you need $500 in the bank" for more details). That said, banks shouldn't be allowed to charge for overdrafts before they happen. If you're a Wachovia customer, raise hell, contact your lawmakers and consider moving to another bank.

The oxymoronic 'courtesy overdraft'

Courtesy overdraft, also known as bounced-check protection, is a far cry from true overdraft protection. Instead of tapping into one of your own accounts, you're borrowing the bank's money and being charged hefty fees for the privilege. What's more, banks often sign you up for this "service" without your consent, and the sneakiest ones even add the amount of the "protection" to the balance you see when you check your account at an ATM. In other words, you're being told you have more money in your account than you actually do, which can lead you to overdraft your account and create more fees for the bank. (For more details, read "Don't be duped by bounced-check 'protection.' ")

What you can do: Call your bank and ask if you have "courtesy overdraft" or "bounced-check protection;" if so, try to get it removed from your account and replace it instead with real overdraft protection.

Fat fees for using personal-finance software

One of the best ways to track your accounts and prevent problems like overdrafts is by using personal-finance software such as Money or Quicken. These programs not only allow you to easily download your recent transactions, but help you forecast your cash flow in the future so you can predict when you might need to get extra cash into your checking account. So naturally, some banks ding you for $6 to $10 a month for using the software to automatically download your transactions.

Do I have a dog in this fight? You bet I do. I'm a longtime user of this software, and I write for MSN Money, which is owned by Microsoft, maker of Money. Even if neither of those things were true, however, I'd find it awfully suspicious that the majority of financial institutions find a way to provide automatic downloads for free, yet a handful of large banks -- Bank of America, Citibank and Wells Fargo among them -- find it necessary to charge over $100 a year for the same service.

What you can do: You may be able to get around the charges by using a more manual download process that involves going to the institution's Web site and clicking a few buttons, but that's a hassle. A better solution if you like the more automated download feature may be switching financial institutions. Washington Mutual, Charles Schwab, ING Direct and others support the automatic downloads without charging for the privilege.

Closing accounts because of bad credit

ING Direct, an online bank, says it was all a mistake. But some 5,300 customers were recently sent e-mails telling them their checking accounts would be closed because of their low credit scores. Many of these customers were understandably disturbed, since there are plenty of ways your credit scores can plummet that have nothing to do with your ability to manage a checking account.

When I called ING Direct USA CEO Arkadi Kuhlmann to ask about this seemingly unprecedented move, he couldn't apologize fast enough. "That was obviously an error," he said of the mass e-mailing. "The letter was worded wrong. . . . We do not give or deny one of our accounts" based solely on credit scores. The bank does use credit scores, he said, to help determine the size of a customer's overdraft line of credit. Within hours of my phone call, ING Direct customers who received the original e-mails reported receiving e-mails from the bank's chief operating officer, Jim Kelly, apologizing for the mess and assuring them their accounts would be restored.

What you can do: If you run across an obviously unfair bank practice, don't keep it to yourself. Someone who received the original ING Direct e-mail posted a message about it on the Consumerist Web site; Wachovia's practice of "potential" overdrafts was highlighted on Wesabe.com. Shout about what you see on those sites, or on MSN Money's own Your Money message board. Draw enough attention, and perhaps we can head off some of the worst policies before they become "industry standards."