Warren Buffett tells CNBC that while the economy "hasn't gotten worse" but also hasn't "gotten much better" over the past three months, he doesn't expect a 'double-dip' recession and sees significant improvement in residential real estate.

In a taped interview with Becky Quick airing this morning on Squawk Box, Buffett says he looks at a number of indicators, including data from Berkshire Hathaway companies, and "we have not bounced -- but we've quit going down."

Unless there's some "horrible event," Buffett thinks the odds are "very much against" another significant downturn for the overall economy in the near future.

He also sees "important" signs of life for housing: "I think we're certainly-we're through the worst of it in residential real estate in all probability. And-- and-- and the reason is we're building a lot fewer houses and we're-- and we're forming households, so that solves itself over time. Doesn't do it in a day or a

It's been said that the best things in life are free -- and we couldn't agree more. That's why we're back with our third annual list of our favorite freebies.

We looked for primo goods and services, no useless junk allowed. And boy, did we find 'em, from financial management and planning helps to entertainment and vacation freebies.

Go ahead. Embrace your inner tightwad:

1. Free Video Games

If you're looking for games for the kids -- or an excuse to act like a kid yourself -- head to Kongregate.com, Popcap.com, Pogo.com and OnlineFlashGames.org for thousands of free online and downloadable games of all types.

For educational or just-for-fun games suited to young kids, check out PBSkids.org, DiscoveryKids.com, NickJr.com and Scholastic.com/kids.

2. Free Birthday Goodies

A slew of businesses will give you prime freebies on your birthday that almost make getting older worth it. For instance, anyone can get free admission to Disneyland or Disney World parks in 2009. Join the

Warren E. Buffett has two cardinal rules of investing. Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1.

Well, a lot of old rules got trashed when the financial crisis struck — even for the Oracle of Omaha.

At 79, Mr. Buffett is coming off the worst year of his long, storied career. On paper, he personally lost an estimated $25 billion in the financial panic of 2008, enough to cost him his title as the world’s richest man. (His friend and sometime bridge partner, Bill Gates, now holds that honor, according to Forbes.)

And yet few people on or off Wall Street have capitalized on this crisis as deftly as Mr. Buffett. After counseling Washington to rescue the nation’s financial industry and publicly urging Americans to buy stocks as the markets reeled, in he swooped. Mr. Buffett positioned himself to profit from the market mayhem — as well as all those taxpayer-financed bailouts — and thus secure his legacy as one of the greatest investors of all time.

When so many others were running scared last autumn, Mr. Buffett invested billions in Goldman Sachs — and got a far better deal than Washington. He then staked billions more on General Electric. While taxpayers never bailed out Mr. Buffett, they did bail out some of his stock picks. Goldman, American Express, Bank of America, Wells Fargo, U.S. Bancorp — all of them got public bailouts that ultimately benefited private shareholders like Mr. Buffett.

If Mr. Buffett picked well — and, so far, it looks as if he did — his payoff could be enormous. But now, only a year after the crisis struck, he seems to be worrying that the broader stock market might falter

The deepest downturn in the U.S. economy since the Great Depression may finally shrink the gap between the very best-off Americans and everyone else.

If so, it won't be by lifting up the bottom. It will be by pulling down the top.

Over the past 30 years, chief executives, Wall Street bankers and traders, law-firm partners and such amassed ever-greater incomes, while the incomes of factory workers, teachers, office managers and others in the middle grew much more slowly. In 2007, the top 1% of U.S. families accounted for 23.5% of all personal income in the U.S., according to economists Emmanuel Saez of the University of California at Berkeley and Thomas Piketty of the Paris School of Economics. That was a level not seen since the Roaring Twenties.

The top 1%'s share appears to be falling fast. Mr. Saez and other economists expect income going to the top 1% of taxpayers — currently, those with about $400,000 a year — will drop to somewhere between 15% and 19% of all income by 2010. That still would leave income distribution more top-heavy in the U.S. than in many other countries.

One early indication: Median chief-executive pay at companies in the S&P 500 fell 15% in 2008 (to $7.3 million), according to University of Southern California pay expert Kevin Murphy.

"Based on past experience, it looks like inequality will go down and change the long-term trend of America

On the surface, the future looks bleak for baby boomers. The Center for Economic and Policy Research projects that the median baby boomer household lost 45 percent of its net worth between 2004 and 2009. So why does retirement expert Ken Dychtwald think that boomers' retirement will still have a high quality of life? Dychtwald is a psychologist and the author of 16 books on aging, including his latest, With Purpose: Going From Success to Significance in Work and Life. He argues that retirement for this generation will be so different from traditional retirement that maybe we'll need a new word to describe it.

Perhaps the big reason retirement is changing is that life spans are changing. Increases in obesity and heart disease have not gotten in the way of continual increases in life expectancy over the past 100 years. In 1950, when many of the baby boomers were born, the average 65-year-old was expected to live an additional 13.9 years, according to the Centers for Disease Control. In 2006, a 65-year-old was expected to live 18.5 years longer. Dychtwald says this doesn't mean our health is improving; it's more a shift in attitude. "When our moms and dads reached their 65th or 70th birthday, they felt like they were in the ninth inning, and they were quite happy. Now, boomers look around and see 80-year-old newlyweds and 90-year-old marathon runners," he says.

Many boomers will retire later than their parents did. To some, the delay might seem like a sign of declining living standards. Retiring early has long been a mark of success. "Now we're seeing a lot of questioning of whether 20 years of nonproductive leisure is affordable or even enjoyable. Somewhere between 60 and 65 percent of retirees don't like it at all," he says, arguing that we may see a period of semiretirement for

In less than three years, Carrie Rocha and her husband, Marco, paid off $50,000 of nonmortgage debt and accumulated a six-month emergency fund and other savings by clipping coupons, buying store brands and reducing unnecessary expenses.

Rocha, of Maple Grove, Minn., says the couple realized they were spending more than they made and started cutting expenses across the board. But rather than tackle huge expenses, they started small.

"For us, large lifestyle changes would have turned my husband off to the whole idea of saving money. We have been intentional to set aside a little, a little, a little, until it became a lot, a lot, a lot," says Rocha, who now blogs about her experience at Pocketyourdollars.com.

Thrift gurus long have espoused the wisdom of pinching pennies because of its potential to add up to big savings.

But do clipping coupons and just saying "no" to the daily $4 latte really make a difference in the long run? Or is it big stuff -- such as downsizing a house or getting rid of one car -- that really helps families save?

The answer depends on your circumstances, tolerance for doing without and self-discipline.

“Small steps are the best way to form habits that will stick.”

Pinching Pennies Reduces Pain

Danny Kofke, author of "How to Survive (and Perhaps Thrive) on a Teacher's Salary," is a big believer

In a down economy, what are the wealthy doing with their money?

Experts who work with the wealthy and observe their spending habits say rich folks are sitting on their cash. Just like the rest of us, they're worried about the future. Suddenly uncomfortable with the nation's financial volatility, the wealthy are revisiting their investment and savings strategies, says Chris Geczy, director of the Wharton Wealth Management Initiative at the Wharton School in Philadelphia.

"They're consuming less and saving more," Geczy says.

Like so many other Americans, "the mass affluent were overextended" in real estate and investments gone sour, he says. Now, they are more likely to invest in fixed-income vehicles.

"They're still scared of risk," he says.

Investment professional Nancy Rooney has noticed this fear, too.

"There is a subset who -- since September and October -- are frozen and so nervous," says Rooney, managing director and head of the Northeast investment business for private wealth management at J.P. Morgan in New York, which says it serves 51 percent of the Forbes 400 list of U.S. billionaires.

"They're looking at their principal left and realize, 'If I lose any more, I'll jeopardize my quality of life,'" she

WASHINGTON (AP) -- The recession has eaten into people's nest eggs so the government is promoting ways to make it easier to save for retirement.

One initiative that President Barack Obama outlined in his weekly radio and Internet address Saturday will allow people to have their federal tax refunds sent as savings bonds. Others are meant to require workers to take action to stay out of an employer-run savings program rather than having to take action to join it.

"We know that automatic enrollment has made a big difference in participation rates by making it simpler for workers to save," Obama said. "That's why we're going to expand it to more people."

The new federal steps, which do not require congressional action, include:

--Making it easier for small companies to set up 401(k) retirement savings plans in which all workers are automatically enrolled unless they ask to be omitted. Employers can set default amounts of each worker's pay -- perhaps 3 percent -- to automatically be deposited into the accounts without being taxed. Workers can raise or lower the contribution levels, and they choose how to invest the money. They will pay taxes on the money only when they withdraw it as retirees, when their tax rates are likely to be lower than when they are working full-time. A similar process would apply to savings plans called SIMPLE-IRAs.

--Allowing such plans to automatically increase the amount that workers save over time unless the workers object.

--Allowing people to check a box on their federal tax returns asking that any refund be sent as a savings

Don't be happy; worry.

The Dow Jones Industrial Average is up 46% since March 9, when the world itself seemed to be coming to an end. In the entire 113-year history of the Dow, only six rebounds have been bigger and faster. But the swiftness and magnitude of this bounce-back aren't reasons to be cheerful; they are reasons to be cautious.

In March, stocks traded as low as 11.7 times their average earnings over the previous 10 years, adjusted for inflation, according to finance professor Robert Shiller of Yale University. That put the market at its lowest valuation since January 1986. Today, however, stocks are selling at 18.4 times Prof. Shiller's measure of earnings. That isn't only up hugely from March but is above the long-term average of 16.3 times earnings.

Robert Rodriguez, chief executive of First Pacific Advisors in Los Angeles, says that in March, investors feared getting crushed in a further decline. Now all they seem afraid of is missing an even greater rally.

Mr. Rodriguez is convinced that the consensus -- economic recovery by early next year at the latest -- is wrong. "People are talking about whether the shape of the recovery will be a 'V' or a 'W' or even a 'square root,' " he says, "but I think we are in what I call a 'caterpillar economy.' It will be up and then down, up and then down. We will be far from normal for a very long period of time. People deploying capital will end up destroying capital."

I am not as worried as Mr. Rodriguez, but it is at times like these, when a rising market sweeps our spirits up with it, that investors need to evaluate their emotions and consider whether their beliefs and actions

GENEVA (AP) -- Airline companies lost more than $6 billion during the first half of the year due to the economic crisis, even as fresh figures showed some signs of recovery in the passenger and freight business, an industry group said Tuesday.

A sample of more than 50 airlines found their losses declined to $2 billion in the second quarter from $4 billion in the first quarter, the International Air Transport Association said, noting that the April-June period is usually a strong one for the industry.

"Since the sample of airlines is incomplete, total industry losses in the first half of 2009 are likely to have been in excess of the reported $6 billion," IATA said.

The Geneva-based group, which represents 230 airlines worldwide, said seat occupancy in international markets stabilized in July -- the first time in over a year -- but added that airlines need to further cut capacity to meet demand.

Freight capacity also still exceeds demand despite an 8.1 percent capacity cut in July, IATA said.

"With excess capacity continuing through Q2 it was not surprising that freight rates were down more than 20 percent over the year," it said.

Overall, the industry outlook remains volatile, IATA said.

Airlines are still adding to their fleet because of long-term orders committed to before the downturn.

NEW YORK (Reuters) - EBay Inc plans to sell a 65 percent stake in its online phone unit Skype for $1.9 billion to private investors including Silver Lake and a venture firm run by the Netscape co-founder Marc Andreessen.

The deal values Skype at $2.75 billion, down from the $3.1 billion the Internet auction house paid for the popular service in 2005.

The group buying Skype includes London-based Index Ventures and the Canada Pension Plan, in addition to Silver Lake and Andreessen's firm Andreessen Horowitz.

The deal leaves to eBay focus on its PayPal electronic payments service as well as its flagship auction service, the company said. It also avoids the risks of a initial public offering eBay had slated for Skype next year.

Susquehanna Financial Group analyst Marianne Wolk said the valuation was at the high end of her expectations.

"It eliminates the risk of the planned IPO and is a better price than many of us expected," Wolk said, adding that the valuation is about 24 times her estimate for Skype's 2009 after-tax earnings contribution to eBay or 4 times her revenue estimate.

John Donahoe, eBay's chief executive, had said in May that a $2 billion valuation would be low for the growing Internet telephone business amid speculation about a potential sale of the company to private