Investors

California plans to sell $4 billion in tax-free bonds next week to fund infrastructure projects, and the state is hoping for robust demand from individual investors. The offering is expected to be a big test of California's standing in financial markets amid a still-precarious budget situation. The last state bond sale was in June.

These days, everybody's an environmentalist. But as the new year begins, we ask whether in this dismal market it's possible to safely invest in green companies and funds. The call to "go green" seemed to be reaching a fever pitch just a few months ago. Then-presidential candidate Barack Obama was pledging to promote industries that were environmentally minded and invest federal money in creating green technology.

President Obama's proposal for direct government funding of student loans -- cutting out private industry -- sent shares of Sallie Mae, Student Loan Corp., Nelnet Inc. and other college loan companies plunging Thursday. For-profit vocational schools, such as Corinthian Colleges Inc., DeVry Inc. and ITT Educational Services Inc., also saw their stock prices drop. Their students often rely on government-backed loans from private lenders.

Lloyd Charton recalls a fateful knock on the door. At his Dana Point home stood a cheerful man with an impressive knowledge of Charton's personal life. It was a neighbor, Dan J. Harkey. Harkey congratulated him on his retirement and asked about a recent vacation. He told him about his company, Point Center Financial Inc., which raised money from private investors and lent it to real estate developers.

The Redeemed Sinner in our popular culture is a mirror-image of the Fallen Saint; each inspires the suspicion that his transformation is never quite complete -- just as the latter's halo can never be entirely sullied by waywardness, the former's sin can never be totally expiated. This thought is prompted by the saga of former white-collar jailbird Barry Minkow, 42, who got back in the news recently by taking the stock of Lennar Corp. down 20% in a single day.

Want to buy some nice mortgage-backed securities? Probably not, these days, unless you're a speculator bottom-fishing for discount deals. But what if the mortgage bonds were backed by the government, as U.S. Treasury bonds are? What if Uncle Sam stepped in to pay the principal and interest to investors if one of the home loans backing the security went into default? That would create -- and has created -- a boom time at the Government National Mortgage Assn.

Santa Monica retiree Bob Braslau considers himself a victim of accused fraud mastermind Bernard L. Madoff. But the court-appointed bankruptcy trustee, he fears, might consider him a beneficiary. Braslau was among the thousands who lost money when the Madoff fund collapsed amid allegations that it was a $50-billion Ponzi scheme.

The Let's Be Frank food trailer parked most days outside the old Helms Bakery complex is no ordinary lunch wagon. The San Francisco company that operates the hot-dog vendor serves franks and sausages made from cows that ate only grass or pigs that were raised humanely. Customers also can choose turkey or soy dogs, all on buns from L.A. Breadworks. The small business was funded in part by venture capitalist Peter Rogers and his Dry Creek Ventures, which targets clean energy, water and food businesses.

California suffered a painful snub by investors Thursday as the state's attempt to sell $4.5 billion in general obligation bonds failed to attract enough demand to raise the full amount. After boosting interest rates on a chunk of the debt, the state cut the total size of the deal by 8% to $4.14 billion, Treasurer Bill Lockyer said. The debt, split among taxable and tax-free bonds, will finance infrastructure projects. Municipal bond analysts said California was, in part, a victim of circumstance: The bond market overall -- including muni, corporate and U.S. government issues -- hit a wall last week after months of ravenous investor and trader demand that had pushed yields sharply lower.

Some angry investors -- both average Americans and giant pension funds -- are not taking their massive losses quietly. Holding portfolios that have imploded from a barrage of financial time bombs, they are turning to the courts for compensation. "Any time people lose money, expect litigation to pick up," said John Sandy Smith, a partner at law firm Morris, Manning & Martin in Atlanta.