(FORTUNE Magazine) – SELLING/Cover Stories 38 HOW TO DEAL WITH TOUGHER CUSTOMERS Today's consumers can drive a marketer nuts. They insist on quality. They pore over labels. Surprise! Satisfying them can be very good for business. by Faye Rice

44 MEET THE WORLD'S TOUGHEST CUSTOMERS

51 , WHAT THE SCANNER KNOWS ABOUT YOU More than you think. by Susan Caminiti

MONEY & MARKETS 55 BIG BANKS: HOW BAD CAN IT GET? Investors are turned off, but that's not the worst of it. Watch out for a further fall in real estate prices, scarcer credit, and a few mergers with unlikely partners. by Gary Hector

62 WHY THE TISCHES ARE BETTING ON BANKS The family is a few hundred million behind, but they're still confident. by Brett Duval Fromson

POLITICS & POLICY 71 WHAT CONGRESS WILL DO NOW By strengthening the Democrats, voters have raised the odds that legislators will send corporate executives running for cover. Business's best bet: a veto- happy President. by Ann Reilly Dowd

75 CAN BUSINESS WIN IN WASHINGTON? Yes, but high-tech lobbying will be needed to counter environmentalists, consumer advocates, and resurgent regulators. by Robert E. Norton

TECHNOLOGY 87 THE INSIDE STORY ON THE BRAIN With the help of biotech tools, computerized scanners, and nine macaque monkeys, scientists have arrived at startling insights -- and potent treatments for mental illness. by Gene Bylinsky

INNOVATION 104 PRODUCTS TO WATCH A fat-free ice cream sandwich from Eskimo Pie Corp., Compaq's powerful new notebook computer, and more. by Stephanie Losee

MANAGING 107 SHOULD YOU WORK FOR THE JAPANESE? To some Americans the experience is fascinating. To others -- especially women -- it can be frustrating. Look before you jump. by Susan Moffat

DEFENSE 121 THE NEW CASE FOR STAR WARS Missile-rattling by Saddam Hussein has brought the Strategic Defense Initiative back to life -- in a cheaper, stripped-down version. by Nancy J. Perry

CORPORATE PERFORMANCE 137 FEDERAL EXPRESS'S BATTLE OVERSEAS The world's biggest air freight carrier is losing big money in its global push. But nobody's writing off CEO Fred Smith -- yet. by Erik Calonius

142 WHY YOU'LL PAY MORE FOR THE WALL STREET JOURNAL The paper has become a victim of the tough times it chronicles. by Richard S. Teitelbaum

144 COMPANIES TO WATCH Russell, maker of apparel for sports stars and fans, is playing to win long term. by Ret Autry

Also: Heekin Can, GMIS, and Integrated Waste Services.

EUROPE 146 THE NEW GERMANY'S GLOWING FUTURE Watch for an economic miracle reminiscent of the one that transformed West Germany after World War II. by Allan T. Demaree

DEPARTMENTS 4 EDITOR'S DESK 6 INDEX 10 LETTERS TO FORTUNE 14 NEWS/TRENDS Media consultants win big in the election, Wall Street swings the ax again, the Persian Gulf crisis stokes wood stove sales, and more.

23 FORTUNE FORECAST Though most forecasters now think recession can't be dodged, Fortune's economists stick to the view that the expansion will last, however sluggishly, through next year. by Todd May Jr.

27 PERSONAL INVESTING The Dow is off over 11% so far this year. Here are stocks top pros are buying. by Karen Nickel

Also: Companies that win or lose because of the new tax law, and Portfolio Talk with Robert C. Elliott of Bessemer Trust.

177 FORTUNE PEOPLE Gerald Greenwald hits the pavement, Ed Bass runs into trouble with his three- acre terrarium, and more. by Mark M. Colodny

178 ON THE RISE

181 BOOKS & IDEAS Former CBS chief William Paley, who died in October, had the world on a string. Trouble was, that was never quite enough. by Geoffrey Colvin

189 KEEPING UP A Big Apple for teachers, the latest plot against conservatives, and more. by Daniel Seligman

ABOVE: Adman Gad Romann (right) helps a consumer focus group compare toothpastes in Los Angeles (Steve Smith -- Onyx).

COVER: Doug Menuez (Reportage) photographed the McNellis family -- and Samoyed -- in a Denver studio.