In the month of January a lot of hedge fund managers were encountering enormous difficulties. Some complained of being in a "trading funk where nothing worked." Others "couldn't get it right" and lost confidence in their day-to-day decision-making ability. Volatility expanded rapidly during a four-week span, and no one expected the numbers to be as bad as they turned out to be. Some held on stubbornly, refusing to take their positions down, believing that things would turn around. The trades were crowded; some thought that they should have been more aggressive in hedging and should have reduced the size of their positions.

This reminded me of one trader, Everett whom I had talked to a while back, who admitted that he was in some trades that were relatively new for him and he increased his risk by adding to trades that turned out to be different ways of expressing the same bet. Unfortunately, his risk systems weren't really in place. He apparently also took his eye off the ball by getting involved in so many unfamiliar trades and assuming that the macro trades were good.

In fact, his problems had a lot to do with his method of information gathering and the stress he was experiencing as a result of his recent losses. And the lessons he learned could be seen as applying to many traders at the start of 2008. In order to get back on track, traders have to better differentiate the so-called noise from the information available to them and to become more active in the management of

Three couples discuss how they decided

Terry and Kathleen McLaughlin: Terry McLaughlin, 64, was executive vice president of the Seattle SuperSonics professional basketball team until he retired last month and set some new goals for himself. "I'm looking forward to more time to read all the things that you always wanted to read but never seem to find time to, studying languages, and learning a musical instrument," he says.

However, his wife, Kathleen, a construction management executive who is six years his junior, won't be retiring anytime soon. "I tried to talk her into the idea that she might want to retire, and it was pretty clear that she wasn't ready to do that yet. I'm comfortable with that," Terry McLaughlin says. "I think it will give me the opportunity to have a time of reflection that I might not have if we were retiring at the same time. We both won't be knocking around the house at the same time."

With more women in the workforce, retirement becomes a decision that a married couple must coordinate together. Sometimes, a workable solution is for one to keep working for a while when the other retires. "Most people do try to time it around the same time," says Phyllis Moen, a sociology professor at the University of Minnesota. "They need to talk about what they would like and what's feasible and plan for their lifestyles as well as their finances." This advice holds whether couples retire at the same time or

WASHINGTON (AP) -- Using words like "sluggish" and "deteriorated," Federal Reserve Chairman Ben Bernanke gave a starkly pessimistic assessment of the nation's economy on Thursday and signaled that the Fed will cut interest rate cuts further if needed to combat the adverse effects of a prolonged housing slump and a severe credit crisis.

Both Bernanke and Treasury Secretary Henry Paulson told a congressional hearing that the economy could still avert a full-blown recession, but Democrats said they believed the government should be doing much more to help millions of Americans cope with a threatened tidal wave of mortgage foreclosures.

Bernanke told the Senate Banking Committee the serious housing slump and a credit crisis triggered by rising defaults in subprime mortgages had greatly strained the economy.

"The outlook for the economy has worsened in recent months and the downside risks to growth have increased," Bernanke told the committee. "To date, the largest economic effects of the financial turmoil appear to have been on the housing market, which, as you know, has deteriorated significantly over the past two years or so."

Bernanke noted that hiring has slowed with job creation falling by 17,000 in January, the first such setback in more than four years. He said the weaker labor market along with recent declines in stock