WASHINGTON (AP) -- It's a toxic economic mix the nation hasn't seen in three decades: Prices are speeding upward at the fastest pace in a quarter century, even as the economy loses steam.

Economists call the disease "stagflation," and they're worried it might be coming back.

Already, paychecks aren't stretching as far, and jobs are harder to find, threatening to set off a vicious cycle that could make things even worse.

The economy nearly stalled in the final three months of last year and probably is barely growing or even shrinking now. That's the "stagnation" part of the ailment. Typically, that slowdown should slow inflation as well -- the second part of the diagnosis -- but prices are still marching higher.

The latest worrisome news came Tuesday: a government report showing wholesale prices climbed 7.4 percent in the past year. That was the biggest annual leap since 1981.

"We're in a slowdown," Press Secretary Dana Perino said at the White House, where the economics talk was still upbeat until recently.

Once the twin evils of stagflation take hold, it can be hard to break the grip. People cut back on their spending as they are stung by rising prices and shriveling wages. Businesses, also socked by rising costs

ARMONK, N.Y. (AP) -- IBM Corp. raised the low end of its 2008 earnings outlook Tuesday and said its board of directors had authorized a continuation of its massive stock buyback program. Its shares jumped almost 4 percent.

IBM now expects earnings per share to exceed $8.25 this year. Previously the company had given a range of $8.20 to $8.30, and analysts surveyed by Thomson Financial were expecting $8.22.

IBM has spent $94 billion buying back shares since 1995, including $18.8 billion last year. Tuesday's decision by the board will let the technology company spend another $15 billion on share repurchases, in addition to $400 million left over from a previous authorization.

IBM said it expects to spend $12 billion of that pool buying back shares in 2008.

IBM shares rose $4.30 to $114.38 in trading Tuesday.

IBM's aggressive stock repurchases are expected to continue in the coming years. IBM executives have described a plan for earnings per share in 2010 to be as high as $11, which would represent a gain of nearly $5 from 2006. Roughly $1.10 of that $5 increase is expected to come from taking shares off the

Whether it's the Dutch tulip craze of the 17th century, the dot-com mania of the late 1990s, or the most recent rush into real estate, there's no shortage of examples of investors behaving irrationally.

In the world of traditional economists and finance professors, though, that's not supposed to happen. If investors are rational decision-makers, then emotion-driven bubbles shouldn't be possible. Yet human weaknesses can limit our ability to think clearly. Many studies of investor behavior have shown that investors are too willing to extrapolate recent trends far into the future, too confident in their abilities, and too quick (or not quick enough) to react to new information. These tendencies often lead investors to make decisions that run counter to their own best interests.

The idea that investor psychology can result in poor investment decisions is a key insight of an increasingly influential field of study called behavioral finance. Behavioral-finance theorists blend finance and psychology to identify deep-seated human traits that get in the way of investment success. Behavioral finance isn't just an interesting academic diversion, however. Its findings can help you identify--and correct--behaviors that cost you money.

What commonplace mistakes should investors avoid? Here are a few key behavioral-finance lessons worth

Housing has imploded, the market's a yo-yo, recession's in the air. And the "working rich" are learning to do without. So says Russ Alan Prince, president of a private wealth-research firm and author of the book The Middle-Class Millionaire. What does that mean?

"They have certain middle-class values," says Prince. "They will continue giving to charity and to send their kids to get the best education, because those are important components to them. They will still buy the high-end luxury car, but not the sports car."

Prince's latest research shows that 78% of the "working rich," or "middle-class millionaires," defined having a net worth of between $1 million and $10 million and still working for a living, consider themselves "very or extremely concerned about their ability to maintain their current financial position." He also estimates that 21% of them have already begun pulling back on spending.

Unity Marketing's Luxury Consumption Index tumbled 27% in January to its lowest level since the firm started the survey in 2004. During the just-ended fourth quarter of 2007, 24% of luxury consumers said they felt their economic situations were worse than they were a year ago, double the 12% who said so in the third quarter. Sure enough, spending on luxury goods dropped 20% during the second half of 2007 from the first half. The company polled 1,281 mass affluent consumers whose income averaged $155,000