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Former CIA chief George Tenet failed to follow through on his 1998 declaration of war against al Qaeda and the agency diverted counterterrorism money for other uses in the years before the September 11 attacks, according to an agency report released on Tuesday.

A summary of the 2005 report by the CIA inspector general was declassified under protest by agency Director Michael Hayden in response to a law passed by Congress earlier this month.

The report said top CIA officers "did not discharge their responsibilities in a satisfactory manner" and it described a "systemic breakdown" in a watch list for tracking terrorism suspects who seek to enter the United States.

"It's really pointing the finger at the CIA's executives," including Tenet, said Barbara Elias of the National Security Archive, which collects and publishes declassified documents.

The report recommended that the agency consider disciplining Tenet and other officials. But Hayden rejected that recommendation, endorsing a 2005 decision by his predecessor as CIA chief, Porter Goss.

"There was never a question of misconduct," Hayden said.

Although the officials had been unable despite their best efforts to prevent the September 11, 2001 attacks, "they have prevented other acts of terrorism, and they have saved innocent lives, in our country and overseas," he said on the CIA Web site.

Tenet, who was awarded the country's highest civilian honor, the Presidential Medal of Freedom, by President George W. Bush in 2004, called the report's findings "flat wrong."

The report said that in December 1998 Tenet signed a declaration saying "we are at war" and he directed that "no resources or people" be spared to contain al Qaeda and its leader, Osama bin Laden.

The declaration was issued four months after al Qaeda-linked bombings at U.S. embassies in Tanzania and Kenya.

However, the report said, the CIA focused too narrowly on tactics and never developed a broad strategy against al Qaeda before the September 11 attacks. Tenet, it said, "bears ultimate responsibility for the fact that no such strategic plan was ever created."

Tenet and others persuaded Congress to increase counterterrorism spending, but officials were not effectively using the money they had, the report said.

Managers moved money from counterterrorism programs to "other agency priorities," some of which had no connection to fighting terrorism, it said.

The report cited difficulties in working with the FBI and the National Security Agency, and in maintaining the suspected-terrorist watch list. Two of the September 11 hijackers were put on the list in August 2001, more than a year after their U.S. travel plans attracted attention.

Other probes into September 11 intelligence lapses have yielded similar findings. This one was ordered by Congress to study personal accountability for successes or failures within the CIA.

Tenet resigned as CIA director in 2004 after serving for seven years. "Before 9/11 no agency did more to attack al Qaeda than the CIA," he said in a statement Tuesday.

A Beijing factory recycled used chopsticks and sold up to 100,000 pairs a day without any form of disinfection, a newspaper said on Wednesday, the latest is a string of food and product safety scares.
 

Counterfeit, shoddy and dangerous products are widespread in China, whose exports have been rocked in recent months by a spate of safety scandals, ranging from pet food to medicine, tires, toothpaste and toys.

Officials raided the factory and seized about half a million pairs of recycled disposable bamboo chopsticks and a packaging machine, the Beijing News said.

The owner, identified only by his surname Wu, said he had sold the recycled chopsticks for 0.04 Yuan a pair and made an average of about 1,000 Yuan ($130) a day.

Wu, who had no license to sell the goods, said he had sold 100,000 pairs a day when business was good.

China, on track to overtake the United States this year as the world's second-largest exporter, lacks a basic food safety law and the manpower to enforce food and drug safety regulations at home or for export. Imports are generally carefully scrutinized.

A lack of business ethics and a spiritual vacuum after China embraced economic reforms in the late 1970s have been blamed for unscrupulous business practices and corruption.

In Guangzhou, capital of booming Guangdong province in south China, Mayor Zhang Ganging vowed to bankrupt serious violators of food and product safety.

The Hong Kong owner of a Guangdong manufacturer at the centre of a recall of Chinese-made toys by U.S. giant Mattel had committed suicide, according to Hong Kong media.

In the latest in a series of tit-for-tat measures, China has accused the United States of exporting substandard soybean shipments to China and requested "effective measures" be taken.

The Pentagon said on Tuesday it would close a controversial database tracking suspicious activity around U.S. military bases that critics complained had been used to spy on peaceful antiwar activists.
 

Officials decided the TALON program would end on September 17 not in response to public criticism but because the amount and quality of information being gathered had declined, the Pentagon said.

"The analytical value of it was pretty slim," said Army Col. Gary Keck, a Pentagon spokesman, told reporters. "The TALON database was a perfectly legal system, nobody ever said it wasn't, but it just was not meeting our needs any more."

Although the Pentagon insisted the move was not a response to criticism, a memo by the department's top intelligence official obtained by Reuters in April said the program should not be continued "particularly in light of its image in the Congress and the media."

Military and defense personnel still will report suspicious activities around military bases, the Pentagon said. But that information will go to an FBI database until the Pentagon proposes a longer-term solution.

The TALON program, which was set up in 2003, has been used to store reports about potential threats to Pentagon and U.S. military facilities and personnel.

PEACEFUL PROTESTORS INCLUDED

The Pentagon said in April last year that a review had found the database included reports on peaceful protests and anti-war demonstrations that should have been deleted.

At that time, the Pentagon said it had introduced safeguards to prevent such information from ending up in the database but it stood by the system, saying it was a valuable tool for detecting potential terrorist threats.

The American Civil Liberties Union, which had sharply criticized the Pentagon for maintaining the database, welcomed the decision to abandon TALON but said questions remained about Pentagon surveillance activity in the United States.

"The TALON program could be just the tip of the iceberg," said Caroline Fredericks, director of the group's Washington legislative office.

"It remains critical that Congress investigate how the abuse of the TALON database happened in the first place and conduct proper oversight of other intrusive surveillance by the executive branch," she said in a statement.

The Pentagon is legally restricted in the types of information it can gather about activities and individuals inside the United States.

In his memo from April this year, U.S. Undersecretary of Defense for Intelligence James Clapper said he had assessed the results of TALON during the past year and did not believe they justified continuing the program in its current form.

The Pentagon said on Tuesday that records would be kept of data previously collected in the TALON system.

TALON has been widely understood to stand for Threat and Local Observation Notice and the Pentagon's own internal watchdog used that name in a report on the program this year. But a Pentagon spokesman said on Tuesday TALON was originally just a name, not an acronym.

Hurricane Dean raced through Mexico's southern Gulf on Wednesday, whipping up wild winds and roaring seas around oil platforms that produce crude for export to the United States.
 

Dean hammered Mexico's Caribbean resort of Tulum and swallowed sand from the famous beach at Cancun before crossing the Yucatan Peninsula out into the Gulf of Mexico where state oil company Pemex has several hundred wells and other installations.

Mexico evacuated over 18,000 Pemex staff and shut down 80 percent of its crude production ahead of the arrival of Dean, which was a potentially catastrophic Category 5 hurricane when it first hit land in Mexico's Caribbean coast.

There was no early word on whether oil platforms were damaged as Dean weakened to a Category 1 and plowed through Gulf waters in the Campeche Sound.

"Pemex is waiting for the hurricane to pass through the Campeche Sound," spokeswoman Martha Velar said on Tuesday.

The price of oil tumbled more than 2 percent on Tuesday as Dean weakened over the Yucatan, easing concerns the powerful storm would disrupt Mexican and U.S. oil operations.

Mexico, one of the top three suppliers of U.S. crude imports, has shut down 2.65 million barrels per day of production -- slightly more than Venezuela's total output -- and closed ports as a precaution.

Dean forced tens of thousands of people, including many tourists, into shelters on the Yucatan Peninsula but there were no reports of deaths or serious damage in Mexico.

Store owners in the city of Vera Cruz, a historic Gulf port near the site of 16th century Spanish conquerors' first landing in Mexico, boarded up windows.

PANIC BUYING

"There has been panic buying of food in supermarkets," said Gabriela Navarrete, 35, who runs a bar in the port.

The storm was due to make landfall again on Wednesday afternoon north of Veracruz, a balmy city often compared to Havana. Sugar and coffee grows in the mountains behind the port.

The hurricane, carrying winds of 80 mph (130 kph) , was 215 miles east of Veracruz on Tuesday night.

Dean destroyed one-bedroom beach cabins and restaurants in the small, arty Caribbean resort of Tulum with strong waves and uprooted palm trees.

Dazed locals wandered across white sands strewn with rocks, garbage and bits of debris from small wooden and concrete huts popular with European and U.S. visitors.

But the "Mayan Riviera" was almost intact compared to the devastation wrought on hotels and tourist sites by Hurricane Wilma in 2005.

"We escaped. It was very light," said Miguel Cruz, 29, a hotel receptionist in the resort of Playa del Carmen.

Water surged down a main street at thigh level in Chetumal, a city of about 150,000 people near where the eye of the hurricane first hit land.

President Felipe Calderon said no deaths were reported in Mexico.

But Jamaican police raised the death toll to three from Dean's brush with the island last weekend. The storm has killed a total of 12 people in its run through the Caribbean.

Heavy rain drenched Belize, a former British colony that is home to some 250,000 people and a famous barrier reef. Sugar canes fields were flattened but there were no deaths reported.

Category 5 hurricanes are rare but there were four in 2005, including Katrina, which devastated New Orleans.

Lose a game of chess to a computer, and you could bruise your ego. Lose an arm-wrestling match to a Japanese arcade machine, and you could break your arm.

Distributor Atlus Co. said Tuesday it will remove all 150 'Arm Spirit' arm wrestling machines from Japanese arcades after three players broke their arms grappling with the machine's mechanized appendage.

'The machine isn't that strong, much less so than a muscular man. Even women should be able to beat it,' said Atlus spokeswoman Ayano Sakiyama, calling the recall 'a precaution.'

'We think that maybe some players get overexcited and twist their arms in an unnatural way,' she said. The company was investigating the incidents and checking the machines for any signs of malfunction.

Players of 'Arm Spirit' advance through 10 levels, battling a French maid, drunken martial arts master and a Chihuahua before reaching the final showdown with a professional wrestler.

The arcade machine is not distributed overseas.

Yes, Deep-Fried Oreos, but Not in Trans Fats

The deep-fried Combo Plate may be a little more healthful this year at the Great Indiana State Fair. So say the fair’s leaders, who, taking a step rarely seen in the realm of corn dogs and fried pickles, have banned oils with trans fats from all the fryers that line the grounds here.
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Jeremy Orem's stand is the home of the Combo Plate: a Snickers, two Oreos and a Reese's, all battered and deep-fried.

The change is only the latest in a string of bans on artificial trans fats. Tied to health problems including heart disease, they have been banished by national restaurant chains, snack brands and New York City, which forbids restaurants to use them in food preparation.

But this is perhaps the most unlikely locale yet: the nation’s classic summer fair, long seen as one final safe haven from the health police.

Along the steamy thoroughfare here, where only sensitive palates can distinguish among the various cuts of potato (curly fries, ribbon fries and the old standby, French), fairgoers seemed pleased with the switch. The food tasted the same, they said happily. And if this meant they could indulge without guilt or have one more helping, so much the better.

“This is a slice of heaven,” said Ryan Howell, 31, as he cradled his Combo Plate, which, for the record, consists of one battered Snickers bar, two battered Oreos and a battered Reese’s Peanut Butter Cup — all deep-fried in oil that is trans-fat free, thank goodness.

“This was an issue we wanted to tackle,” said Cindy Hoyer, executive director of the fair, which spent the winter months testing various oils and, despite the fears of some concessionaires about possible changes to taste or costs or tradition, concluded that trans-fat-free oils created what Ms. Hoyer called a better product.

National fair officials say Indiana and at least one other fair, the Western Washington, have led the way on a health issue that is only now creating a buzz in the fair industry. During a national convention of fair officials in Las Vegas this November, Indiana representatives are to offer a workshop, “Going Trans-Fat Free,” which, the convention program promises, will answer the question “What is all the craze about?”

Some concessionaires here said trans-fat-free oils seemed to leave “less of a varnish buildup” on their French fry baskets and corn dog equipment. But Chris Coffman, who helps his brother, Sam, operate a stand that sells the fried-dough snack called elephant ears, was none too pleased with the new ways.

The oil they are now using has to be changed more often, Mr. Coffman said (although some other concessionaires said their new oils in fact required less changing). And he worried, briefly, that the ban might also apply to the margarine that the Coffman's use to make cinnamon sugar stick to their doughy confections; it does not, fair officials ruled.

And that, Mr. Coffman said, is the silly part of the whole ban: it will barely skim the surface of fair food’s inherently — and proudly — unhealthful nature, he said.

“It’s craziness,” said Mr. Coffman, 45, who says he eats fair food every day but who appears surprisingly trim. “They’re using this for a marketing ploy. It’s a way to convince people that they can eat more — that somehow all of this is safe now and you can eat all you want — when we all know that’s not true.”

The calorie count? The state fair does not require vendors to provide those numbers, and no one here would venture any guesses. But figures from the Web site Calorie King. COM suggest that a Combo Plate, for instance, comes to well over 700 calories. That is more than a third of the entire daily caloric intake recommended by the Department of Agriculture for a 30-year-old woman who is 5-foot-6 and 130 pounds and who exercises less than 30 minutes a day.

Ms. Hoyer, the fair’s executive director, pointed out some healthful (if, judging from the customer lines, less popular) offerings of salads and tomato juice here. But she was quick to acknowledge that trans-fat-free oils will not turn standard state fair cuisine into health food.

“When you are having fair food, you are having fun,” she said. “You’re probably still going to use some calories out here. Look, we can’t control what goes in an Oreo, but we can say what goes in our fryers out here.”

Jeremy Orem, who runs Fried Creations, the home of the Combo Plate, introduced a new item at this year’s fair: deep-fried Pepsi. He rolls out his Pepsi-based dough, dips it in a batter made with Pepsi and deep-fries it for 90 seconds. His oil, made of soybeans, is trans-fat free as required, and on the front of his booth he has posted a local newspaper’s account about the fair’s trans-fat ban.

But inside the booth, where the air is dense with oil, workers chuckle about the whole concept. And Mr. Orem himself rarely eats what he cooks here.

“I stay away from fried foods,” he said.

Foreign-policy experts deem U.S. national-security strategy in disrepair, the war in Iraq alarmingly off course, and the world increasingly more dangerous for Americans.

They also have a negative view of the Bush administration's so-called "troop surge" in Iraq, but disagree with the public's call for immediate withdrawal from the region.

These sentiments, from more than 100 foreign-policy experts, were logged in a recent survey by Foreign Policy magazine and the Center for American Progress, a Washington think tank. Respondents include former White House officials, former secretaries of state, a retired CIA director, liberals and conservatives.

The survey, known as the Terrorism Index, is an attempt to discern the American foreign-policy establishment's assessment of how the United States is fighting the war on terror.

Some 53 percent say that the surge is having a negative impact, an increase of 22 percentage points in the past six months. And nearly all of the experts (92 percent) believe that the war in Iraq is having a negative impact on U.S. national security.

Mike Boyer, senior editor of Foreign Policy, which published the survey in its September/October issue, described the respondents' doubt about the way the war in Iraq is being conducted.

"The main reason for this pessimism appears to be events on the ground in Iraq," Boyer said.

Thousands of military personnel have been killed and maimed.

Aaron Friedberg, who was surveyed and spent two years as deputy national security adviser to Vice President Cheney, cautions that more is to be considered than the experts' opinions.

"You always have to ask, what would be better and where would we be if we were pursuing policies very much different than those that we have been?" said Friedberg. "It's possible that we would be better off in certain respects, but we might be worse off in others."

Further details on the war's status will be disclosed in a report by Gen. David Piraeus on Sept. 15.

A bipartisan majority (68 percent) now say that the United States should redeploy troops from Iraq in the next 18 months, though most oppose an immediate withdrawal. Surprisingly, more conservatives (25 percent) called for an immediate pullout than liberals or moderates.

Overall, nearly all of the experts (91 percent) say that the world is becoming more dangerous for Americans and report that the country is not winning the war on terror (84 percent).

Georgetown University professor Bruce Hoffman, who also participated in the survey, said it's difficult not to read the poll as a repudiation of the Bush administration's conduct of the war on terror.

"If you wanted to take a bumper sticker from both my experience and then from this poll, it's that where we've been particularly either remiss or ineffectual is in fighting the al-Qaida brand as hard as we've fought the actual al-Qaida terrorists."

More than 80 percent predict a terrorist attack on the scale of the one on Sep. 11, 2001, within the next decade.

Pakistan was named as the country most likely to become the next al-Qaida stronghold, ahead of Iraq. About 75 percent of those surveyed also said that Pakistan –- home to Dr. Abdul Qadeer Khan, who is revered in Pakistan as the father of the country's nuclear bomb — was the most likely to transfer nuclear technology to terrorists in the near future.

But when the experts were asked to name the ally that least serves U.S. security interests, Pakistan placed second to Russia, with Moscow's consistent criticism of the United States, refusal to back tougher sanctions against Iran, and the increasingly authoritarian tendencies of President Vladimir Putin likely weighing on the experts' minds.

Yet, the experts didn't have ready answers about to what to do.

"Everyone seemed to be pointing to how dire the situation was with Pakistan. But the experts were all over the map about what we do about it," said Caroline Wadhams of the Center for American Progress, a Washington think tank.

One topic on which there was relative consensus: Iran. Just 8 percent of the foreign policy experts favor military strikes against Iran's nuclear facilities. Some 8 percent to 10 percent say the U.S. should instead opt for sanctions or diplomacy to contain Iran's nuclear ambitions.

Harvard University, already America's richest university, said on Tuesday its endowment grew to a new high of $34.9 billion, boosted by bets on emerging markets, real estate and private equity.
 

Returns for fiscal 2007, which ended June 30, grew 23 percent, significantly above the 16.7 percent gain posted for 2006 and the 19.2 percent gain reported for 2005.

Harvard, whose investments are closely watched in the asset management industry, also extended its run of beating its internal benchmark and besting the average university's investment returns.

The Ivy League school made headlines last month when it lost $350 million after Sowood Capital, a hedge fund run by a former Harvard employee with whom the university invested, collapsed.

What started with problems in the sub prime mortgage market quickly spread and pushed global stock markets lower, hurting many funds, including Sowood.

The school said the Sowood loss would have translated into a decline of about 1 percent on a stand-alone basis.

But the portfolio actually gained 0.4 percent in July because of its positioning and strong risk management. John Longbrake, a university spokesman, declined to say how the portfolio was faring in August, as sharp moves in the yen, metals and stocks left some hedge funds with heavy losses and others able to turn July's declines into gains.

Harvard, unlike many universities, still manages a chunk of its endowment in-house at its Harvard Management Company unit. It also relies on outsiders, including HMC alumni, who have launched their own hedge funds, to invest much of the money donated by former students.

The endowment is not a single fund but roughly 11,000 individual funds, many restricted to specific uses like scientific research or the creation of a professorship, the university said.

Mohamed El-Erian, who replaced Jack Meyer as HMC's president in 2006, is an influential emerging markets bond specialist. And for the second straight year, investments in emerging markets posted the year's highest total return.

Since arriving in Boston, where HMC is located, from California where he worked at Pacific Investment Management Co., El-Erian has rebuilt HMC's depleted staff and implemented other changes. HMC said it restructured the allocations it made to external managers, but gave no details. Looking ahead HMC plans to concentrate on under-exploited market segments to help develop new investment vehicles.

El-Erian said Harvard plans to be more transparent about its structure, activities and governance, setting an example in an industry well-known for its secrecy. Next month, a new Web site will be launched, and in October 2008, HMC will publish its first-ever annual report.

The median large institutional fund returned 17.7 percent in the last fiscal year, according to the Trust Universe Comparison Service.

Harvard, located across the Charles River from Boston in Cambridge, relies heavily on its endowment to cover annual expenses and said it spends about 5 percent of the endowment every year on university programs.

Investors feeling shaken by the recent market fluctuations may want to revise their recipe for success. In the September issue of Money magazine, senior writer Jason Zweig offers five secrets of successful investing:

1. Don't go back for more. Anyone who has made a bundle off a lucky investment will be tempted to angle for a second windfall, but the odds of getting one are slim. "Be especially wary of investing in stocks or mutual funds that remind you of the one you made a killing on long ago," writes Zweig, "Chances are, any similarities to another investment, living or dead, are purely coincidental."
2. Don't trust your instincts. "Many of the world's best investors have learned to treat their own feelings as reverse indicators," Zweig writes. "Excitement becomes a cue that it's time to consider selling; fear tells them they should be thinking about buying." The lesson: when it comes to investing, your gut may be lying.
3. Beware your triggers. "The stock market generates signals that can goad you into trading," warns Zweig. Don't be Pavlov's dog. Avoid obsessively checking stock prices on the computer. And if you're watching CNBC for stock updates, turn the sound down, so the bells and shouts of the trading floor don't spur you into action prematurely.
4. Divide and conquer. Investing requires being tolerant of risk, but you don't want to jeopardize your entire nest egg. Play the odds by putting 90% of your money in a low-cost, diversified index fund. The other 10% can be used for purely speculative trades. But once it's gone, it's gone. Don't dip into your savings to replenish it, Zweig cautions.
5. Stay calm. If great gains are driving you to buy, or losses propelling you to sell, think before you react. It's always a bad idea to make investment decisions in the heat of the moment.

People too quick on the draw may have shot themselves in the foot by selling when the stock market looked like it was in a free fall.
Since that day -- Aug. 9, when the Dow industrials fell 387 points for its second-worse loss of the year -- the market has bounced back, fallen, bounced back some more, and fallen again. Indeed, even on a day of triple digit falls the market has snapped back to end up.
Weird.

The big lesson that should be gleaned from all this bouncing around is patience -- from an investor's perspective anyway. Jumping in and out of investments means missing certain opportunities, unless you're jumping in at market bottoms and out at market tops while see-sawing your way to tremendous profits.
If this is what you are doing then give up your day job and join the pros. If not, have patience.
Meanwhile, professionals should be exploiting these markets. Otherwise, what good are they? If you're paying investment managers then they should be actively managing your account. Many investment managers are being passive during these turbulent times and that's a big mistake.
I know this sounds like it conflicts with the "patience" attitude waged at investors, but professionals are just that, professionals, and they get paid to find opportunities in the capital markets. And there may be no better time than now to exploit opportunities in the capital markets.
Good investment managers salivate over volatility. Take certain hedge funds that are profiting off the sub prime mortgage debacle. Almost a year ago, hedge fund adviser Hennessee Group reported that certain hedge funds were purchasing credit default swaps in anticipation of a decline in the mortgage market. Credit default swaps are sophisticated financial instruments that essentially capitalize on creditor defaults.
These hedge funds have profited enormously, of course, because of the massive declines and defaults in the sub prime mortgage market. These hedge fund managers did what good investment managers do: they looked for opportunities in the marketplace and seized them.
As Hennessee itself reports, "In what has been the best short-sale theme since 2002, many hedge funds have greatly benefited from the collapse in sub prime mortgages via their short exposure to mortgage lenders and sub prime mortgage backed securities and indices."
Some of the securities that hedge funds bet against are now down more than 60%, which means betting as they did has paid off huge for these funds.
Winners and losers
To be sure, several hedge funds with large investments in bonds backed by sub prime mortgages have experienced significant losses in the first half of this year. Those losses have spilled over into the equity markets and, quicker than you can say Bernanke, cuts and pullbacks abound.
But Hennessee says the "reality of the situation is that many hedge funds were expecting such an event and were able to profit from the decline."
The difference between how many profited and how many lost may be the key to the future of not only the hedge-fund industry but the capital markets themselves.
It will also be interesting to see how some of the savvier mutual fund investment managers such as Marty Whitman capitalize on the credit markets now. Value managers like him scour the markets for just the right time to buy. Active value managers, I bet, will pull in big numbers this quarter.
If your manager is being passive, he or she isn't doing his or her job. That is the only reason to sell a managed account these days as an investor; get out and get on with your money. There's too much opportunity to let passive managers ponder the markets while your money sits. Find managers that pack a punch. You'll be glad, when the dust settles, that you did.

Right now, there are plenty of ways to earn a 5% or higher yield on your savings, but many consumers don't take advantage of those rates, according to a recent survey.
Sixty percent of consumers surveyed in May said they "almost never" check the interest rates available on savings accounts, even though most respondents pointed to rates as a top concern for them, according to an online survey of about 5,800 U.S. households conducted for HSBC Direct, a unit of HSBC Holdings PLC  the U.K.-based bank.
Consumers may have more reason to shop rates soon: Some economists predict the U.S. Federal Reserve Bank will lower the federal funds rate to calm the volatile financial markets. The prime rate -- a rate that's tied to many consumer financial products -- generally moves in step with the federal funds rate. See full story.
A decline in the federal funds rate could lead to a drop in the rates offered on savings accounts. On the other hand, a lower federal funds rate can also mean lower credit-card and other loan rates. Watch video on tips for maximizing savings.
Just 15% of the consumers surveyed said they earn more than 5% on their money market account and 29% say they earn more than 5% on their online savings account, according to the survey.

But a quick check at Bankrate .com on Monday finds about 15 savings or money-market accounts listed that pay a 5% or higher annual percentage rate, yet require a minimum balance of just $25 or less and charge no account fees. Bankrate is a financial-rate research firm that surveys banks nationwide.
Savers who have $1,000 or $5,000 to deposit can find even more options offering a 5% or higher yield. Bank money market accounts and savings accounts are FDIC-insured, meaning consumers' deposits up to $100,000 are insured. Money market accounts often limit the number of monthly withdrawals.
"You may want to check in quarterly or semiannually to see whether you're getting a good deal," said Gerri Detweiler, author of "The Ultimate Credit Handbook" and operator of GerriDetweiler .com.
"Whether it's paying interest or earning interest, we aren't always as careful as we could be. That's money you may be leaving on the table if you don't spend a few minutes shopping around for a better option," Detweiler said.
Still, she added, some may check account yields too often. "If you're constantly checking, unless you have a lot of money at stake, then you may be spending more time than it's worth looking around."
Stephen Brobeck, executive director of the Consumer Federation of America, agreed, noting that a slightly higher yield doesn't make much difference for those with low balances.
"Those with modest amounts of savings are not that sensitive to interest yields on savings accounts because the difference in annual interest earned between a 1% and 2% account on $1,000 is only $10, and the difference between 1% and 5% is only $40," Brobeck said. The CFA is a nonprofit advocacy and research group in Washington.
The survey respondents who don't keep a close eye on yields are "acting rationally," he said.
Free money
Still, bankers say some consumers who neglect to shop for high rates are missing out on free money.
"If a consumer goes out to save $100 on an airplane ticket and yet leaves their money in a non-interest-bearing checking account, they're giving up free money," said Michael Prebenda, senior vice president for HSBC Direct in New York. HSBC Direct offers online savings and checking accounts, among other products.
"Where this issue becomes particularly glaring is with checking accounts where you're getting absolutely nothing for your money" at many traditional banks, Prebenda said. "People just don't realize what several percentage points means on that $5,000 checking account balance," he said.
"Trying to find an additional 50 basis points of interest is not what they want to do, but they want to know their money is earning greater than inflation and they can do that with an online savings account. Five percent is a very good investment today," Prebenda said.
Brobeck of the CFA said consumers should focus first on building an emergency savings account. CFA surveys of U.S. households have found that $2,000 is the typical annual amount needed for emergencies, he said.
"We're talking about repairing the brakes on your car, buying your child new shoes, paying for an emergency dental treatment, paying off a speeding ticket," he said. "The key thing is to have that emergency savings account. If you don't, you're going to have to run up your credit-card debt or take out a payday loan at even higher interest rates," he said.
"Once you have built up enough funds to cover those unexpected expenditures, then you should pay particular attention to looking for yields as you build up your savings beyond that."
If you find budgeting difficult and thus neglect to make regular contributions to a savings account, consider setting up an automatic withdrawal from your checking account (or whichever account to which your paycheck is deposited), feeding every month into a savings account.
That way, your money is pulled out for savings before you have a chance to spend it. Said Detweiler: "It's an out-of-sight, out-of-mind situation where you can rack up savings without tapping it every time you get to the AMT

Aug 21, 2007

Federal agents are investigating a fire that burned two homes early Tuesday, but that's not the only problem that firefighters are confronting in Chalmette.
 

Vincent Gangi's home was consumed in the blaze, which investigators say started in an abandoned home next door.

Firefighters seemed to have trouble getting set up and with water pressure, Gangi said.

St. Bernard Fire Chief Tommy Stone said the fire was already burning part of Gangi's home when crews arrived. Gangi wasn't aware of it because it started on the third floor, Stone said.

The chief, however, admitted there were issues with water pressure, as well as some other problems.

"We did have a couple problems during the night with water pressure. Actually, one firefighter, some kind of way, got entangled with an intake line and got flipped over and had to be extracted from the hose. We had to actually shut down the lines that we were feeding to one of our ladder trucks," Stone said.

Water pressure isn't an overall concern in St. Bernard Parish, the chief said, but there are isolated spots with problems.

Another issue, Gangi said, were overgrown bushes hiding the hydrant.

"Nobody cuts the grass on this side, over there. Look around -- there's no cleanup, he said.

Stone said manpower was also an issue in putting out the fire. The department used to have 116 firefighters, but since Hurricane Katrina, it only has 90.