Foreclosure Fear

Foreclosure fear 3:30

With foreclosures at a record high across the country, homeowners with everything to lose fear eviction.

Source: http://money.cnn.com/video/#/video/news/2008/03/18/news.dornin.031808.foreclosure.cnnmoney

WaMu: Skip customers; save the execs

As mortgage holders face foreclosure and shareholders take a bath, troubled Washington Mutual takes action -- to protect executive bonuses. It could be a trend.

By Michael Brush

Around the country, Washington Mutual (WM, news, msgs) regularly plays the tough guy with homeowners who fall behind on mortgages. This as foreclosure filings overall rose 60% nationwide in February.

And its involvement in the subprime mess has been tough on stockholders. Since last summer, the company's shares have lost nearly 80% of their value.

But the bank is a softy when it comes to bonus pay for top brass.

After CEO Kerry Killinger and other top executives missed all or a big part of their bonus pay last year, Washington Mutual wasted little time taking steps to apparently make sure it won't happen again -- even if the mortgage market and the company remain in the tank.

The board decided in February to use different performance yardsticks that could make it look like Killinger and other top executives were doing great jobs -- and all but ensure them millions of dollars in bonuses for 2008.

Those huge losses piling up because of subprime loans and foreclosures? At bonus time, the bank will ignore them.

"I would love to be able to do that," says Judy Lederman, a single mom in Scarsdale, N.Y., who won't be able to ignore the financial consequences of a potential foreclosure. She recently lost her job as a regional public-relations manager for a major retail chain. Washington Mutual handles her mortgage."I'm stupefied at the prospect of losing my home and scared stiff of the financial implications," she says.

Changing the rules

She'll be held to the rules in her mortgage agreement. Washington Mutual execs will collect bonus pay under new, easier-to-satisfy rules:

• Bonuses are now linked to achievements like growth in retail banking fees. That hardly seems a strenuous hurdle given the way ATM and other bank fees are rising.

• Executive bonuses will be doled out for squishy achievements such as improvements in customer loyalty.

• When the bank does use traditional metrics like profitability, it won't count the impact of mortgage losses and foreclosure costs.

"This throws the whole concept of pay for performance out the window," says Rich Ferlauto, the director of pension and benefit policy for the American Federation of State, County and Municipal Employees (AFSCME). "Management of subprime risk was central to the obligations of the CEO and other top executives at Washington Mutual. So to take that out of the pay formula isn't a rational approach to allocating rewards. It seems that everyone is suffering except the executives who were directly responsible in some manner for the subprime crisis."

Ferlauto recommends shareholders vote against board members who serve on pay committees that pull such antics.

Little sympathy for homeowners

The situation seems ironic to at least one financial adviser working in the trenches with homeowners trying to negotiate flexibility on mortgages because, like Lederman, they recently suffered a job loss, an illness or some other hardship beyond their control.

"I find Washington Mutual the most difficult when I try to negotiate forbearance agreements which are the last hope for people who are about to lose their homes," says Michael Sichenzia of Dynamic Consulting Enterprises, a Deerfield Beach, Fla., company that offers homeowners help in avoiding foreclosure. "I would love to have them recognize that we have available candidates for workouts and forbearance, but they just aren't doing it."

Washington Mutual spokesman Derek Aney responds: "We have been among the leaders in trying to keep people in their homes. We lose and the homeowner loses when the foreclosure occurs. I do not believe that characterizing us in that way is fair."

• Video: After Bear Stearns, are investment banks safe?

Aney says Washington Mutual helped 35,000 homeowners avoid foreclosure last year through loan modification and other kinds of assistance.

In its corner offices, Washington Mutual is generous. If the bank meets its watered-down performance hurdles this year, Killinger stands to pocket $3.6 million as a bonus for 2008, or about 365% of his base salary.

Shockingly, he'd get that bonus even if shareholders see more lousy performance at Washington Mutual. Killinger is at least partly responsible, given that he led the bank so deeply into the subprime morass. The company reported a nearly $1.9 billion loss in the fourth quarter of 2007, and analysts have forecast losses throughout 2008.

That's assuming his base salary this year is the same as the $1 million reported for 2007, the most recent number available. Without a bonus, he got $5.2 million in total compensation last year, according to company filings. That was down from $14.4 million in 2006, including a $4.1 million bonus.

For meeting the new, lowered bonus hurdles, Chief Operating Officer Stephen Rotella would get a $2.8 million bonus, or 304% of his base pay this year. And Thomas Casey, the finance chief, would get $1.2 million, or 179% of his base pay.

Continued: 'Pretty nice jobs, aren't they?'

"Those are pretty nice jobs, aren't they?" quips Don Hodges, the president of the Hodges Fund (HDPMX), who credits his fund's superior performance in part to the fact that he avoids companies handing out excessive compensation to execs.

"When they start excluding losses from certain sectors when calculating bonuses, it looks like the board thinks officers are there to manage part of the business but not all if it. It would be nice if shareholders could do that, too. It's a further example of boards who are more concerned about their friends in management than they are the shareholders."

Washington Mutual says the fact that executives sacrificed so much bonus pay last year shows the company is committed to pay for performance. Execs lost two-thirds of their 2007 restricted shares due to poor results, and all stock options issued before the end of last year are out of the money. Executives got only about a third of their expected cash bonus, and Killinger declined to accept whatever he might have gotten.

Going forward, the company says, at least half of total direct compensation -- 70% for Killinger -- comes in the form of stock options that won't reward execs unless the stock goes up considerably. Killinger, for example, can cash out half of his options only after the stock trades above $26 a share and the other half when the stock goes above $35, and he has to wait three to four years to do so. The stock recently was trading for about $10.

Though Washington Mutual will exclude real-estate-loan losses and expenses related to foreclosures when calculating bonuses, the board may override those measures and penalize execs if they do a poor job of managing those two costs, bank spokesman Aney says.

Washington Mutual isn't the only company moving up the goal posts on executive bonuses as the mortgage mess unwinds. It's part of an emerging trend that pay experts such as Patrick McGurn of Institutional Shareholder Services think will continue. Here's a look at three others:

Toll Bros.

Shareholders of home builder Toll Bros. (TOL, news, msgs) last week voted to jettison its old bonus plan for CEO and co-founder Robert Toll. It's easy to guess why shareholders voted to get rid of the plan: Insiders hold about 25% of the stock; Toll himself owns 17%.

The rules they threw out prevented Toll from getting a bonus last year for the first time since 1991, as the company struggled. Revenue fell 24%, and the company had big inventory write-offs.

Under the new bonus plan, Toll gets bonus pay based on improvements in a long list of soft concepts ranging from employee morale and the company's "visibility" and "reputation" to customer satisfaction. The company will also use traditional measures such as revenue growth and profitability. Toll will also get 2% of the company's income before taxes and bonus.

But here's the sneaky part: The board's compensation committee can now change the mix of bonus yardsticks used each year, giving it the freedom to select any measures it wants without asking shareholders. Toll Bros. won't even reveal which yardsticks it is using, so shareholders won't even be able to judge if the company is picking easy targets.

You know where this is going.

The company says that if its new set of yardsticks had been in place last year, Toll would have gotten as much as $6.5 million in bonus pay, instead of zero.

• Video: After Bear Stearns, are investment banks safe?

"It doesn't seem like that bonus is tied to company performance at all because the stock was down over 35% last year," says Jacob Hay of the Laborers' International Union of North America, which owns shares of Toll Bros. "It just gives him a bonus for being a CEO, basically," Hay says. Toll's $6.5 million bonus last year would have been on top of $8.4 million in total pay for 2007.

The company declined to respond. But in filings, it denies it had wanted to revise the bonus plan because Toll got no bonus last year. Instead, it says the change was needed to ensure Toll's compensation could be linked to positive steps taken even in a weak market, like cost cutting or debt reduction. The continuing flexibility means the committee is "better able to tailor the performance component annually to address current issues," which is important because "no two years present the same challenges for the company or the CEO," company filings say.

Continued: More generosity

More generosity

Two other home builders have also moved the goal posts on executive bonuses.

KB Home (KBH, news, msgs) chief Jeffrey Mezger missed his bonus last year because the company did not turn a profit. No matter. KB Home's compensation committee simply granted him a "discretionary" bonus of $6 million for 2007. Including the bonus, he made $16.4 million last year in pay and options grants. The company also handed out performance bonuses worth $1.8 million to four other execs.

Hovnanian Enterprises (HOV, news, msgs) recently amended its options plan to allow the board to lower the exercise prices on options, making them more profitable for the execs who hold them.

KB Home declined to comment. In a filing, it rationalized Mezger's big "discretionary" bonus by saying he did other good deeds for the company last year. These included strengthening the balance sheet, improving customer satisfaction, cutting costs and selling off its French operations.

Hovnavian finance chief Larry Sorsby responded that options re-pricing may be necessary to keep top execs in the company, since all their options are out of the money. The stock is down almost 70% over the past 12 months.

Sorsby said his company's decision was supported by board members who are independent of the execs who will benefit.

Pay experts find these kinds of excuses galling. They believe companies are really just applying a double standard on "pay for performance" which, after all, helped home builder CEOs rake in tens of millions a year during the good times.

"They are happy to benefit from the upside in pay for performance programs, but they don't want any downside," says McGurn, of Institutional Shareholder Services, "When we see the downside kick in, companies immediately begin a rapid retreat."

At the time of publication, Michael Brush did not own or control shares of any of the companies mentioned in this column.

Source: http://articles.moneycentral.msn.com/Investing/CompanyFocus/WaMuSkipCustomersSaveTheExecs.aspx?page=all

Retirement crisis: From bad to worse

You've been hearing about a looming Social Security problem for years, but it's not the only big trouble facing boomers and the generations behind them.

By Jim Jubak

Baby boomers and the post-boomer generations are facing a retirement crisis. And it now goes way beyond the worries about a collapse of Social Security that so preoccupied us before housing prices headed south.

The crisis I'm talking about is a result of economic and monetary policies that have turned a pattern of boom-bust-boom-bust into business as usual in the U.S. economy. The 2007-and-counting collapse of the housing, mortgage and debt markets isn't an isolated disaster but part of a decade-long shift away from saving and investing toward speculation and gambling with our future.

We don't have a whole lot of time to fix this crisis. The boomers born in 1946 will turn 65 in 2011. For many of us in the baby-boom generation, financing a relatively comfortable retirement, which never looked easy, looks increasingly impossible.

For those of you in the post-boomer generations, I'm sure it seems even more likely that we boomers will try to pick your pockets to finance our retirements. And I'm not sure that you're wrong to believe that. This crisis wouldn't be so bad -- and might not even exist -- if we hadn't dug ourselves such a deep hole to begin with and then kept on shoveling.

Pig in a python

That initial hole was largely demographic. The number of Americans 65 and older is projected to increase to 69.4 million in 2030 from 35.5 million in 2000, the Census Bureau says. That's not entirely bad news -- much of the increase comes from Americans living longer -- but it is a problem if you're trying to figure out how to pay for all those people to retire.

• Talk back: Are you worried about the worsening retirement crisis?

Because the baby-boom generation is so much bigger than succeeding generations, the ratio of people in the retirement years, 65 and older, to those in the working years, 20 to 64, will rise from 20.6% in 2005 to 35.5% in 2030, according to the Census Bureau. That will put a strain on any retirement system that depends on contributions from current workers, as Social Security does, to pay the benefits of current retirees.

Fortunately, Social Security is only one part of the stream of cash that we use to pay for retirement in the United States. Most of the other sources aren't based on funding current benefits from current contributions. They rely on current savings, invested over time, to produce a future sum sufficient to pay for retirement or part of it.

There are three big pieces to this saving and investing part of the retirement cash flow:

• Traditional pensions. With these, most of the saving and investing is done by employers, which also bear the risk that retirement assets will fall short of promised benefits. As of 2005, only 37% of workers were covered by a traditional pension, according to the Employee Benefit Research Institute. And a growing number of company pensions are winding up in the hands of the Pension Benefit Guaranty Corp., a government agency and payer of last resort that is underfunded to the tune of $14 billion, as I described in "The year's scariest investing news" on Feb. 26.

• Accounts funded by contributions from workers. These include 401(k)s and individual retirement accounts. The Employee Benefit Research Institute estimated workers had about $7.5 trillion in these retirement accounts as of October 2007.

• Home equity. For most people, the house they live in is their biggest retirement asset. In retirement, people cash in on the value of their homes by selling and then buying less expensive houses, renting or moving in with the kids. More people are also using reverse mortgages to extract equity from their homes in retirement. As of October, working from numbers published by the Federal Reserve and changes in home prices measured by the S&P/Case-Shiller index, I calculated a total value of about $20.7 trillion for the value of all U.S. residential real estate.

Video on MSN Money

Why the market tumbled
The Dow industrials' 315-point plunge Friday, Feb. 29, was triggered by a margin call, when lenders to London's Peloton Partners hedge fund asked for more collateral or cash. The surprise, says MSN Money's Jim Jubak, was that the fund suddenly decided to liquidate its $9 billion in assets.

At this point in articles on this topic, it's customary to point to the money lost in the busts after the booms and, after much wringing of hands, conclude that all is lost. The absolute numbers are indeed impressive.

In the 2000-02 dot-com crash, market capitalization of the U.S. stock markets declined anywhere from $5 trillion to $9 trillion (depending on what indexes and markets you count, but what's $4 trillion among friends?). In a Feb. 28 conference call, mortgage buyer Fannie Mae (FNMN, news, msgs) said it expected the real-estate market to bottom in 2009 after a total drop of 15% to 20%. That would produce a loss of roughly $3 trillion to $4 trillion.

Biggest loss isn't dollars

But it's not the dollars lost that make me worry about a crisis. Market losses get recouped in market rallies. By July 2007, the Standard & Poor's 500 Index ($INX) had made up all the money it had lost in the bear market of 2000-02. The top estimate of $4 trillion lost in a housing bubble would just take home prices back to where they were in March 2004.

What we've lost that can't be replaced is time.

Continued: A financial nightmare for many

As anyone planning to retire in 10 years or so knows, your biggest nightmare -- the one where you wake up screaming -- is a collapse in the financial markets and the economy in the years just before you retire.

If you've had such a nightmare, take a shower and then buckle down to some serious financial discipline. Bring lunches from home and brew your own coffee instead of rushing out to Starbucks. You know the drill. And invest the extra you save to make up for lost dollars and time.

Or you can decide to make up the difference by making riskier bets in the hope that the gamble will enable you to catch up.

Looking for a shortcut

There's no evidence that we're cranking up the financial discipline, however, and plenty of evidence that we're rolling the dice.

How we'll react to the housing bust of 2007 isn't yet known. But the evidence from how we reacted to the 2000-02 bear market doesn't fill me with confidence. According to the Federal Reserve's 2004 survey of consumer finances, the percentage of families that save anything at all went down to 56.1% in 2004 from 59.2% in 2001. (The Fed does these every three years, and the 2007 survey isn't out yet.)

The Employee Benefit Research Institute reports that the number of people participating in defined-contribution plans, including IRAs and 401(k)s, declined to 52.2 million in 2004 from 52.9 million in 2002.

The housing boom certainly didn't have any of the trappings of a disciplined attempt to reach retirement goals. As home values rose, homeowners withdrew money from these vital retirement assets to use on current consumption. In the early stages of the boom, 2001 through 2004, the average homeowner's equity fell from 58% of home value to 55%. That's during a period when home values climbed 67%, according to the S&P/Case-Shiller index, when equity would have been rising if consumers hadn't been so busy cashing out. According to the Web site RGE Monitor, homeowners pulled $800 billion out of their homes in 2005 alone.

Grim news on several fronts

Sure, that was great for the U.S. and global economies. All that extra consumer spending kept the economies ticking along when Europe and Japan were barely growing. But don't expect the global economy to return the favor now by buying enough from the U.S. to push economic growth back over 3%.

U.S. exports might climb enough to help us avoid a recession, but will they get economic growth back over 3%? Forget it, at least anytime soon. In February, the Federal Reserve cut its forecast for 2008's economic growth to 1.3% and for 2009's to 2.1% to 2.7%. The central bank also noted that growth could remain below "normal" as far out as 2012.

Video on MSN Money

Why the market tumbled
The Dow industrials' 315-point plunge Friday, Feb. 29, was triggered by a margin call, when lenders to London's Peloton Partners hedge fund asked for more collateral or cash. The surprise, says MSN Money's Jim Jubak, was that the fund suddenly decided to liquidate its $9 billion in assets.

The news doesn't get any better if you look at inflation, where rising prices eat away at the value of retirement assets, the dollar (where a falling dollar raises prices for anything imported, including oil) and investment returns (where low interest rates make it hard to find anywhere safe to put money that's earning a positive return after inflation).

Pretty grim. No doubt about it.

What we can do about it

But there are things we can do as individual investors to increase our chances of escaping the worst consequences of this crisis. Save more, of course, if we can. Keep on investing. And invest smarter.

In coming columns over the next month or so, I'll look at several strategies for investing smarter for retirement:

• How to put more of your portfolio in strong-currency assets.

• Where to find the stability premium that used to work in favor of U.S. assets.

• A new strategy that I'm calling "unfixed income" for finding better yields in a low-interest-rate environment.

• And, in my next column, set for March 11 (no column on Friday, March 7), I'll describe why, in a falling-dollar world, commodities are about as close to a sure thing as you'll ever find.

Continued: Updates to Jubak's Picks

Updates to Jubak's Picks

Sell Kinross Gold (KGC, news, msgs): I think gold is headed to $1,000 an ounce in the short term, but that's now just $15 an ounce away. And though I think the inflationary winds will eventually blow gold well above $1,000 an ounce, I think the price is likely to face some heavy resistance around that $1,000 level.

The most recent news out of Kinross urges me to caution. In the fourth quarter of 2007, the company reported lower production at its Round Mountain gold mine and higher-than-expected costs. Cash costs for 2008 now look to be around $370 an ounce. Contrast that to cash costs of $195 for Goldcorp (GG, news, msgs).

I'm probably leaving money on the table here, but with Kinross' costs higher than expected and production lower, there's no way I can get to a target price above $25 a share. With the stock at $25.87 as I write this March 3, I'm planning to sell Kinross out of Jubak's Picks on March 4 with a 117% gain since I added it Sept. 22, 2006.

(Full disclosure: I will sell shares of Kinross out of my personal account three days after this column is posted.)

Sell Dynamic Materials (BOOM, news, msgs): This is a market call. As of March 4, I'm selling Dynamic Materials out of Jubak's Picks because the shares climbed 30.4% in the rally from Jan. 17 to Feb. 29 and because I think that rally is about to fail.

The market, in my opinion, is likely to fail its testing of February's lows and then head about 10% lower to test the summer 2006 lows around 2,000 for the Nasdaq Composite Index ($COMPX) and around 1,220 for the S&P 500.

I'm selling these shares out of Jubak's Picks with a 12% loss since I added them to the portfolio on Dec. 7, 2007.

Sell Weatherford International (WFT, news, msgs): This sell is also a market call, on what I think is a developing bubble in oil prices. An influx of hot money looking for some alternative to stocks, bonds and mortgage-backed securities has driven commodity prices up at historic rates.

The Reuters/Jefferies spot commodities index was up 15.3% in January and February. That's the biggest increase in the index since it was started in 1956. I think oil is due for a pullback when the Organization of Petroleum Exporting Countries decides (my prediction) at its March meeting that the political cost of cutting production when oil is over $100 a barrel is just too high and when rising production in non-OPEC countries meets up with falling demand from a global economic slowdown.

The resulting correction will wring some of the speculative excess of out oil prices and certainly won't mark an end to the long-term rise in oil, but I'd like to cut my exposure to oil before the correction so I can buy at lower prices. As of March 4, I'm selling Weatherford out of Jubak's Picks with a gain of 6% since I added it to the portfolio on Jan. 8, 2008.

Continued: Developments on past columns

Developments on past columns

"Wait out a weird stock market": Now that's better. On Feb. 20, Itron (ITRI, news, msgs) reported the kind of quarter I expected from this company when I added it to Jubak's Picks. The company reported earnings of 81 cents a share, 9 cents a share above Wall Street expectations, on revenue of $480.5 million, well above the Wall Street consensus of $447 million.

Even better, the company told Wall Street to increase its revenue estimates for the first quarter to $450 million to $465 million from the current $414 million consensus. For all of 2008, the company expects revenue of $1.87 billion to $1.91 billion versus the current $1.82 billion Wall Street projection.

A few days later, Itron announced that it had won a major contract from Pepco Holdings (PHI, news, msgs), one of the largest electric utilities in the mid-Atlantic region with 2 million customers, for its metering-data-management product. Pepco will also use Itron software to manage peak utility loads and improve revenue predictability.

In addition, Itron is one of two finalists for a Southern California Edison program to deploy 1.4 million electric and 900,000 gas "smart" meters.

As of March 4, I'm raising my target price on Itron to $108 a share by December 2008 from my prior target of $92. (Full disclosure: I own shares of Itron in my personal portfolio.)

"Make a profit, save the world": Patience is paying off. Now if only the market weren't so determined to send everything, good and bad, down in price.

On Feb. 26, Maxwell Technologies (MXWL, news, msgs) reported a fourth-quarter loss of just 4 cents a share, a huge 17 cents a share better than Wall Street had projected, on revenue of $17 million. That revenue number represented year-over-year growth of 14.6% and beat the Wall Street consensus estimate of $15.3 million for the quarter. Revenue climbed 19% from the third quarter of 2007.

Efforts by new CEO David Schramm to pursue only business that yields a profit -- rather than growth for growth's sake -- in the company's ultracapacitor unit seems to be paying off. Revenue from ultracapacitors, an energy-storage technology that's ideal for fast-charge, fast-discharge uses such as in hybrid or all-electric cars -- rose only 7% from the third quarter, but the company made substantial progress on reducing manufacturing costs. That led to an improvement in gross margins to 29% in the fourth quarter from 24% in the third quarter.

The timing of any big jump in ultracapacitor revenue continues to hinge on the rate of adoption by the auto industry. During the quarter, Maxwell announced a contract to supply ultracapacitors to Continental (CTTAY, news, msgs), a German auto supplier, for use as the energy-storage element in an electrical system board that Continental is designing. Now, thanks to a leak from a competitor, we know that the previously unidentified automaker is BMW and that the board would include eight Maxwell ultracapacitors. BMW is expected to take 100,000 to 200,000 boards for use in a 2010 hybrid.

Continental is also known to be working with other automakers on ultracapacitor electrical systems. I think the potential here justifies sticking with these shares even in the present terrible market conditions.

As of March 4, I'm raising my target price of $14 a share by December 2008 from a prior $12 a share by November 2008. (Full disclosure: I own shares of Maxwell in my personal portfolio.)

"3 hot sectors where shares are scarce": Yara International (YARIY, news, msgs) reported fourth-quarter-2007 results on Feb. 14. Earnings for the quarter came in below Wall Street projections. EBITDA (earnings before interest expense, taxes, depreciation and amortization) rose 48% from the fourth quarter of 2006, but that was still about 15% below expectations.

The outlook for the rest of 2008 continued to improve, however. Company management projected that nitrogen fertilizer prices will remain at record levels, a projection echoed by executives at other fertilizer companies during their recent earnings reports. Across the industry plants are operating at capacity, and, except for the production of urea, there's no new capacity on the horizon. (And in the case of urea, forecasts of new capacity additions in 2008 have come down to 3.8% from 4.2%).

Video on MSN Money

Why the market tumbled
The Dow industrials' 315-point plunge Friday, Feb. 29, was triggered by a margin call, when lenders to London's Peloton Partners hedge fund asked for more collateral or cash. The surprise, says MSN Money's Jim Jubak, was that the fund suddenly decided to liquidate its $9 billion in assets.

With global grain stocks at historic lows and grain prices at historic highs, farmers will plant all the acres they can for the foreseeable future -- and buy more fertilizer as a result. Yara's management is confident enough of its supply-demand forecasts to plan to increase phosphate-rock capacity at its Siilinjärvi, Finland, facility by 30% in 2010-11.

As of March 4, I'm raising my target price for Yara to $65.50 by September 2008 from my prior target of $54.60 by March 2008.(Full disclosure: I own shares of Yara in my personal portfolio.)

Meet Jubak at The Money Show

MSN Money's Jim Jubak will be among more than 100 investment experts on hand for The Money Show in Las Vegas, May 12-15. You can hear from the experts in more than 250 free workshops while sharing tips and tricks with other active investors. Admission is free for MSN Money readers. To sign up, call 1-800-970-4355 and mention priority code No. 009554, or register online.

Editor's note: Jim Jubak, the Web's most-read investing writer, normally posts a new Jubak's Journal every Tuesday and Friday. Due to a pressing book deadline, there will be no column March 7, however. Please note that recommendations in Jubak's Picks are for a 12- to 18-month time horizon. For suggestions to help navigate the treacherous interest-rate environment, see Jubak's portfolio of Dividend Stocks for Income Investors. For picks with a truly long-term perspective, see Jubak's 50 Best Stocks in the World or Future Fantastic 50 Portfolio. E-mail Jubak at jjmail@microsoft.com.

At the time of publication, Jim Jubak owned or controlled shares in the following equities mentioned in this column: Itron, Kinross Gold, Maxwell Technologies and Yara International. He did not own short positions in any stock mentioned.

Source

Eygpt -Bankruptcy

How would the American's attitudes change if bankruptcies were posted in the criminal section in the newspaper? Eygpt does. How about this? What if we posted the names of the former homeowners when the papers are riddled with foreclosures?

U.S. single-family home values have decreased by 5.5%

Zillow’s latest Home Value Report shows that over the past year, U.S. single-family home values have decreased by 5.5%, while condo values have declined by 7.4%.

Did you know? Many recent homeowners are now under water.

39% of Americans who bought a home in 2006, and 30% of those who purchased in 2007, now have negative home equity—meaning they owe more on their mortgage than their home is currently worth.