NEW YORK (Reuters) - Billionaire investor George Soros on Tuesday predicted a "stop-go" economy for the United States, saying fears of inflation will drive up interest rates and choke off growth.

Soros, one of the world's most successful hedge fund managers who was speaking at a breakfast hosted by the Wall Street Journal, said borrowing costs are the major headwinds for the economy.

"As markets revive, fear of inflation will drive up interest rates, which will choke off recovery," he said.

Rising U.S. Treasury yields have driven mortgage rates back up, threatening a recovery in the housing market and a refinancing boom that has helped preserve the still-fragile health of recession-weary households and the banks that lend to them.

The rise in bond yields and mortgage rates may also act to check the huge recent rally in global stock markets of the past three months, with the Federal Reserve trying to end an 18-month recession and yet not spur inflation.

Soros went back into retirement earlier this year after leading his self-named firm through the 2008 crisis. He made about $1.1 billion last year, according to Institutional Investor's Alpha Magazine.

SOROS ON 'SUPER BUBBLE'

Soros, who made his fortune targeting currencies in tightly controlled markets, said international financial

WASHINGTON (AP) -- Unemployment rates rose in all the largest U.S. metropolitan areas in May for the fifth straight month, and are likely to keep marching higher this year, a potential obstacle to a hoped-for economic recovery.

The Labor Department said Tuesday that jobless rates in May rose from a year earlier in all 372 metropolitan area it tracks.

The unemployment rate in Kokomo, Ind., jumped to 18.8 percent, up 11.7 percentage points from a year ago, the largest increase of all metro areas. The second-highest increase occurred in Indiana's Elkhart-Goshen, where the rate rose to 17.5 percent. That's up 11.4 percentage points from a year earlier.

Both parts of Indiana have been slammed by layoffs in transportation equipment manufacturing. Elkhart-Goshen has suffered layoffs at RV makers Monaco Coach Corp., Keystone RV Co. and Pilgrim International.

The other metro areas posting large gains were: Bend, Ore., where the jobless rate rose to 15.2 percent, an increase of 8.8 percentage points; and North Carolina's Hickory-Lenoir-Morganton saw its unemployment rate rise to 15.4 percent, a gain of 8.5 percentage points.

A common thread running through most of the regions that have been hard hit is the loss of manufacturing jobs. The collapse of the housing market has especially hurt jobs at factories that produce building materials and household goods, such as carpets, flooring, appliances and furniture. In addition

NEW YORK (AP) -- Scott Painter makes his living betting on startup companies, having played a role in launching 29 of them over the years. But with the bad economy choking initial public offerings and acquisitions, Painter is now backing an idea that makes it easier for insiders like him to sell shares in their companies even before they go public.

SharesPost, which was founded by Painter's business partner, Greg Brogger, launched publicly in June. Through SharesPost's Web site, Painter is trying to sell shares in several companies he helped found, including car pricing startup TrueCar.com. He also wants to buy shares in companies that are far from an IPO, like short-messaging site Twitter and business-networking site LinkedIn.

SharesPost is one of a few private stock exchanges that are emerging to fight what venture capitalists call a liquidity crisis. These exchanges give stakeholders an alternative way to trade their shares in hot startups like Facebook for cold, hard cash -- without having to wait years for an IPO.

Employees at startup employees often put in long hours but get salaries that can be 20 percent less than their peers at public companies. In return, they get stock or options that they hope will be a path to sports cars and summer homes after their company goes public or is bought out.

Given this, services like SharesPost could help startup workers get some cash while awaiting a distant IPO that might never even get off the ground. Most people won't be in on the action, though, since these exchanges are only open to a small pool of buyers.

And it's not clear how much -- or how little -- stock has changed hands through them. In its short life

The investor's favorite stocks are selling cheaply right now.

Lunch with Warren Buffett is up for sale on eBay again. The Oracle of Omaha will break bread in New York with the winning bidder and seven pals, with proceeds going to the Glide Foundation, a San Francisco charity.

With a few days to go, bidding has reached $81,000. Last year the winner, a Chinese fund manager, paid $2.1 million.

But you don't need an expensive New York lunch with Mr. Buffett to invest alongside him these days. Despite this spring's stock market rally, several of Mr. Buffett's favorite stocks are selling for less than he paid for them.

Mr. Buffett liked oil giant ConocoPhillips (NYSE:COP) enough to invest $7 billion in the stock through the end of last year, at an average price of $82.55, according to the Berkshire Hathaway annual report. Anyone buying today can get it for about $41.

Mr. Buffett has conceded an "unforced error" in buying this oil stock when oil prices were booming. But that doesn't mean he has given up on it. In his last comments on the subject a few months ago, he reiterated his belief that demand for energy would remain strong. At current prices ConocoPhillips is about 13 times this year's forecast earnings, but analysts predict that will drop to a cheap 7 times in 2010

NEW YORK (Reuters) - A bidder has offered to pay $456,789 for a steak lunch with billionaire investor Warren Buffett, in a charity auction expected to be completed Friday night on eBay Inc's (NasdaqGS:EBAY) website.

The top bid as of noon EDT (1600 GMT) in the 10th annual fundraiser remains well short of last year's record $2.11 million paid by Hong Kong-based investor Zhao Danyang. The starting price was $25,000, and the auction ends at 10 p.m. EDT Friday.

As in recent years, the winner and up to seven friends may dine with the world's second-richest person at the Smith & Wollensky steakhouse in New York.

Zhao, who runs the Pureheart China Growth Investment Fund, had his lunch with Buffett on Wednesday.

The auction benefits the Glide Foundation, a nonprofit in San Francisco's Tenderloin district that offers housing, job training, health and child care, and meals for the poor.

Observers had speculated that the global recession might keep this year's winning bid below last year's record. Bids typically soar in the last few hours of the auction, as bidders who did not want to push the price up early step in.

If the $456,789 bid were to hold up, it would be the fourth-most ever paid for the lunch. Winning bidders

DETROIT (Reuters) - General Electric Co (NYSE:GE) Chief Executive Jeff Immelt said on Friday the United States needs to refocus its economy on manufacturing and exporting if it wishes to recover from a brutal recession.

The world's largest economy can no longer count on consumer spending to drive demand, nor can it rely on Wall Street financial wizardry if it wants its population to continue to enjoy a high standard of living, the head of the largest U.S. conglomerate said.

"We should clear away any arrogance, false assumptions, or a sense that things will be 'OK' just because we are America," Immelt told the Detroit Economic Club. "Our competitive edge has slipped away and this has hit the middle class hard."

The U.S. should work to have manufacturing represent about 20 percent of employment, more than double its current level, he said.

The world's biggest maker of jet engines and electricity- producing turbines said on Friday it would be building a new manufacturing research center outside Detroit that will employ 1,100 people.

The move reflects Immelt's belief that, like many U.S. companies GE has turned too many core technological procedures over to outside contractors and foreign operations.

"In some areas, we have outsourced too much," Immelt said, according to a copy of his prepared

WASHINGTON (AP) -- Despite persistent layoffs, the economy seems to be faring better than it was at the start of the year.

The Labor Department said Thursday that new jobless claims jumped unexpectedly last week. And the number of people continuing to receive unemployment aid rose more than expected.

The figures indicate that jobs remain scarce even as the economy shows some signs of recovering from the longest recession since World War II.

A revised reading on gross domestic product -- the broadest measure of the nation's output -- said the economy posted a 5.5 percent annualized decline from January through March. That was slightly better than the 5.7 percent estimate made a month ago. Economists generally think the economy is shrinking at a slower pace -- about 2 percent -- in the current quarter.

The main forces behind the small upgrade in the first quarter: Businesses didn't cut stockpiles of goods as much, and imports dropped more sharply than previously estimated.

On Wall Street, investors shrugged off the unexpected rise in jobless claims and focused on positive earnings reports from homebuilder Lennar Corp. and home furnishings store Bed Bath & Beyond Inc. The Dow Jones industrial average added about 140 points in afternoon trading. Broader indices also rose more than 1 percent.

Initial claims for jobless benefits rose last week by 15,000 to a seasonally adjusted 627,000. Economists

CHARLOTTE, N.C. (AP) -- Bank of America Corp. said Thursday it will raise more money than the government said it needed in order to withstand a deepening recession.

Upon the completion of a debt exchange later this week, the Charlotte, N.C.-based bank will have raised $38 billion. That is $4.1 billion more than the $33.9 billion the Federal Reserve said last month the bank needed to protect against potential losses should the economy worsen.

The move was largely expected within the investment community.

What was not expected, if anything, was the speed with which Bank of America raised the money, said Tony Plath, finance professor at the University of North Carolina at Charlotte.

"Remember, they were essentially given 30 days to submit a plan. Heck, they raised the capital in 30 days," Plath said. "That's proof that they have credibility in the capital market and that they did have residual assets that they could in turn dispose of in order to raise capital."

In its latest move to boost capital, Bank of America said it has preliminarily agreed to exchange $3.9 billion in depository shares for common stock as part of a debt exchange offer. Settlement of the exchange, which was oversubscribed, is expected to be completed Friday.

The bank has also agreed to convert about $10.7 billion in preferred stock into 789 million shares of

Using liability-driven investing to better meet your retirement goals.

It works for the big dogs, and it might just work for you. "Liability-driven investing," a strategy that has been sweeping the world of pension-fund management, could be the next big trend in retirement planning for wealthy individuals.

LDI, as it's known, calls for matching or at least explicitly considering your future expenses when designing a portfolio, rather than focusing on asset growth alone. The idea is to assemble investments that will generate enough gains, and at the right times, to cover everything from greens fees to a bequest to your alma mater. So far, it's mostly being used for portfolios of the super-rich, but experts say it can work just as well for the merely well-off.

LDI certainly has taken hold among large U.S. pension funds, about half of which now use it or are considering doing so. The big liabilities of these funds -- future payments to retirees -- resemble long-term bonds and are extremely dependent on interest rates. If interest rates fall, it's harder for a fund to earn the money needed to make the payments. Therefore, "the heart of most LDI strategies used by pension funds is to try to take this interest-rate risk off the table, so that assets and liabilities move in lock step when interest rates change," says Mark Ruloff, the director of asset allocation at Watson Wyatt Investment Consulting.

This can mean something as simple as investing the whole fund in bonds with the same interest-rate sensitivities as the liabilities. But liability-driven investing also has more sophisticated variants. For instance, a pension fund may run two separate portfolios -- one focused on hedging interest-rate risk

In a live interview on CNBC today, Warren Buffett said there has been little progress over the past few months in the "economic war" being fought by the country. "We haven't got the economy moving yet."

While the economy is a "shambles" and likely to stay that way for some time, he remains optimistic there will eventually be a recovery over a period of years.

BECKY: The last time we sat down to talk to you was on May 4, and at that point you told us that you think we're in an economic war right now. How much progress do you think we've made in that war?

BUFFETT: Well, it's been pretty flat. I get figures on 70-odd businesses, a lot of them daily. Everything that I see about the economy is that we've had no bounce. The financial system was really where the crisis was last September and October, and that's been surmounted and that's enormously important. But in terms of the economy coming back, it takes a while. There were a lot of excesses to be wrung out and that process is still underway and it looks to me like it will be underway for quite a while. In the (Berkshire Hathaway) annual report I said the economy would be in a shambles this year and probably well beyond. I'm afraid that's true.

SAN FRANCISCO (Reuters) - Apple Inc chief executive Steve Jobs underwent a liver transplant at a Tennessee hospital and has "an excellent prognosis", the hospital that performed the operation confirmed on Tuesday.

Jobs, 54, received the transplant because he was "the sickest patient on the waiting list at the time a donor organ became available," the Methodist University Hospital Transplant Institute said in a statement on its Website.

"Mr. Jobs is now recovering well and has an excellent prognosis," the statement said. James Eason, program director at the institute and the hospital's chief of transplantation, added that the confirmation had come with Jobs's permission.

The hospital did not release details of Job's condition or when the operation was performed, but the Wall Street Journal reported over the weekend that the transplant took place about two months ago.

Hospital spokeswoman Ruth Ann Hale did not immediately respond to a request for comment on Jobs' condition. A prognosis refers to a doctor's prediction regarding the probable course of a disease, disorder

WASHINGTON (AP) -- Orders to U.S. factories for manufactured goods from computers to aircraft surged in May for a second straight month. And a gauge of business investment rose last month by the most in nearly five years.

Together, the data Wednesday signal that the recession could be at or near a bottom.

Yet new-home sales fell unexpectedly last month. It was a reminder that any recovery in the housing market will be long and slow.

Even so, investors focused on the positive news on durable-good orders and business investment, before Federal Reserve policymakers announce their decision on interest rates Wednesday afternoon.

The Dow Jones industrial average added about 80 points in midmorning trading. Broader stock averages also surged more than 1 percent.

The Commerce Department said demand for durable goods rose 1.8 percent last month, far better than the 0.6 percent decline that economists expected. It matched the rise in April, with both months posting the best performance since December 2007, when the recession began.

Orders for non-defense capital goods, a proxy for business investment plans, jumped 4.8 percent, the biggest increase since September 2004. That could signal that businesses have stopped trimming their investment spending.

The back-to-back monthly gains in orders for durable goods -- items expected to last at least three years

WASHINGTON (AP) -- New U.S. home sales fell slightly last month, another sign that the housing market's recovery is likely to be gradual and prolonged.

The Commerce Department said Wednesday that sales dropped 0.6 percent in May to a seasonally adjusted annual rate of 342,000, from a downwardly revised April rate of 344,000. Sales were down nearly 33 percent from May last year.

The results fell short of economists' forecast of a 360,000 sales pace, according to Thomson Reuters. However, many analysts think new home sales hit bottom in January and will increase gradually as the economy gathers steam.

The median sales price of $221,600 was up 4.2 percent from April, but down 3.4 percent from a year ago.

Still, houses are still sitting on the market unsold for months. There were 292,000 new homes for sale at the end of May, down more than 2 percent from April. At this sluggish rate of sales, that's a 10-month supply.

The inventory of homes for sale "will remain enormous, particularly with increased competition coming from distressed sales of existing homes," wrote Joshua Shapiro, chief economist with MFR Inc.

Fallout from the housing crisis has played a central role in the U.S. recession, now the longest since World

THE WOODLANDS, Texas (AP) -- Huntsman Corp. said Tuesday two investment banks will pay it a $1.7 billion settlement over its accusation they schemed to scuttle a $6.5 billion buyout of the chemicals maker last year.

The agreement with Switzerland's Credit Suisse and Germany's Deutsche Bank ends a trial in Texas state court on fraud charges. Huntsman, based in Salt Lake City but operated from suburban Houston, was seeking up to $4.6 billion in compensatory damages.

The settlement will give Huntsman a cash infusion and access to financing at a time when chemical producers are struggling with weak sales linked to the recession.

The banks will pay Huntsman $620 million in cash and provide $500 million in senior-debt financing, $600 million in unsecured note financing and $12 million in legal costs.

Huntsman claimed the banks worked behind the scenes to renegotiate a funding agreement with Hexion Specialty Chemicals' owner, the private equity firm Apollo Management.

Hexion had agreed to buy Huntsman in July 2007 for $6.5 billion, with Credit Suisse and Deutsche Bank providing the financing. Hexion began backpedaling last summer and Apollo pushed in court to have the agreement canceled, citing Huntsman's deteriorating finances.

A Delaware judge ordered Apollo to try to close the deal anyway, but Credit Suisse and Deutsche bank said they wouldn't fund it. The two chemical companies parted ways and Huntsman received a $1 billion

COLUMBUS, Ohio (AP) -- The weakened dollar boosted oil prices once again Tuesday, ending a two-day slump.

Benchmark crude for August delivery rose $1.74 to settle at $69.24 a barrel on the New York Mercantile Exchange.

There has been some optimism about an economic rebound, which would tend to lift energy markets, but the value of the U.S. currency is playing an even bigger role in prices for everything from oil to gasoline on Nymex.

Crude is priced in the U.S. currency and a lot of money has flooded into the market with big investors using oil as a hedge against inflation. The dollar fell 2.37 cents against the euro Tuesday.

Energy experts believe the falling dollar has resulted in artificially high prices for the past couple of months. Retail gas prices rose every day for nearly two months until Monday, though they remain well below last summer's prices.

Just how much the dollar is influencing energy prices may become clear Wednesday, as the Federal Reserve meets to talk about U.S. interest rates.

Few expect that rates will be raised right now, but everyone will be parsing the language of the Fed statement to determine if a rate hike is even possible in the near term.

Another sign of how much demand there is for crude and gasoline arrives Wednesday when the