Speaking in Washington, D.C., yesterday, Federal Reserve Chairman Alan Greenspan emphasized the need for our nation's youth to better understand financial concepts.

The chairman and The Motley Fool have always been on the same page with this issue. We'd love to see more financial courses enter the core curriculum, especially at the junior and senior high school level.

Can you imagine how much better off the nation would be if every high school graduate thoroughly understood the positive effects of investing at an early age or the dangers of credit card debt?

In today's Motley Fool Take:

Will Housing Go Bust?

Fool writer Mathew Emmert may find a decent house yet.

In his column, Mathew laments the extreme prices being demanded even for dilapidated, ramshackle ramblers in today's hot housing market. He and his wife have decided to wait on the sidelines to see if housing prices cool off.

Why? Partly because the last thing a new home buyer wants to do is end up "upside down" on a mortgage, which occurs when the value of a home declines below the mortgage obtained for it. This very situation caused many people to essentially become "bankrupted by their homes" when regional prices tanked about a decade ago. Back then, tens of thousands of people abandoned their California homes and mortgages rather than continuing to pay.

Could something like that happen again? As reported by today's Wall Street Journal, an IMF World Economic Outlook study concluded, "Housing booms are more likely than stock booms to end in a bust," and when they do, the economic damage is more severe than stock market declines.

The study showed that U.S. housing prices are up 28% (after inflation) since the mid-1990s. This is the largest short-term increase ever recorded, but records only go back to 1970. The U.S. price increase pales next to the 103% gain in Ireland, 70% rise in the U.K., and 43% hop in Australia, but IMF's research director said a 28% rise still easily meets their statistical measure of a boom, and implies perhaps a 40% chance of a later bust.

Not all agree. Even IMF's deputy research director wasn't ready to call this housing market a bubble, according to the Wall Street Journal. He argues that prices are up for valid reasons, including higher immigration rates and increased demand, as low-income families qualify for mortgages more than ever before.

It's all about supply and demand, and lately, demand still remains at least in-step with supply.

The study suggests that when the housing market does go bust, prices fall an average of 30%, which means that homes lose about 60% of their recent runup in price. Housing price booms occur once every 20 years, on average, and 40% of recorded booms have ended in busts. That sounds like pretty even odds for this time around. If it does happen, though, some markets will hold up better than others.

It's always about location, location and, uh, location.

Quote of Note

"Our houses are such unwieldy property that we are often imprisoned rather than housed by them." -- Henry David Thoreau

Shareholders Await HP's Decision

Does Hewlett-Packard(NYSE: HPQ) care about its shareholders' wishes? You have to wonder today, following its sketchy behavior after a contentious shareholder proposal passed at the company's annual meeting Wednesday.

The proposal asks that the board of directors seek shareholders' approval before paying out executive severance packages worth more than 2.99 times the executive's base salary and bonus. The AFL-CIO made the recommendation after watching former Compaq head Michael Capellas walk away with $14 million in November (three times his annual salary and bonus).

It's true that the AFL-CIO has its own bias and agenda, but that's immaterial now. Shareholders took the time, thought, and care to make their choice clear to HP. It's a strong stand, since most shareholder proposals hardly ever garner significant support.

HP responded today that it will "duly consider" the recommendation. That's a nice way of saying, "Awww, our shareholders approved some silly measure. How quaint."

Shareholder proposals aren't binding, so the company isn't obligated to listen. But it should, unless it wants to be perceived as one of the most shareholder-unfriendly corporations around.

HP probably hopes the issue will just die. It can ignore it, people will forget, and that will be that. Scorned shareholders won't forget anytime soon, though, and neither will we.

Do the right thing, HP. Listen to your shareholders.

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Hard Times for PeopleSoft

Never tell an enterprise software maker to mind its own business. PeopleSoft(Nasdaq: PSFT) became the latest corporate player to warn, announcing that March-quarter earnings missed the mark.

Profits of $0.11-$0.12 a share on no more than $455 million in revenue missed analysts' expectations of $0.14 a share, and its top line was off by $30 million. Investors were braced for a sequential dip, but not a year-over-year decline.

The shortcoming hits especially hard because, just three months ago, PeopleSoft bragged about gobbling up market share, "clearly setting us apart from our competitors." Now, it's just another face in customer relationship management software crowd.

Wasn't this supposed to be a safe haven for investors? PeopleSoft and its enterprise software peers, Oracle(Nasdaq: ORCL), BEA(Nasdaq: BEAS), and Siebel(Nasdaq: SEBL), were supposed to prosper in an economic landslide because their wares improved efficiency and shaved costs. What company wouldn't mind spending a little money now to save a whole lot more later? But in the words of the great David Byrne, "This is not my beautiful house."

The bottom line is that to sell business software, you need businesses. Struggling to stay afloat in the near term, companies aren't making investments that would allow them to thrive in the long run.

PeopleSoft's saving grace? For starters, a $1.6 billion cash balance. That translates into a little more than $5 a share in debt-free cashola. As long as the company remains cash-flow positive -- and there's no reason to think otherwise -- the downside is relatively limited here.

It will take some time. Earnings need to recover. But patience will pay off for investors who understand what so many companies don't these days: Suck it up in the near term for long-term rewards.

Discussion Board of the Day: Oracle

Does PeopleSoft's fall after its grandstand just a quarter earlier remind anyone else of Oracle's Larry Ellison? Is the Oracle CEO a proud genius or simply too arrogant for his own good? What will it take for the enterprise software market to bounce back? All this and more -- in the Oracle discussion board. Only on Fool.com.

Quick Takes

Shares of gene chip maker Affymetrix(Nasdaq: AFFX) fell off a cliff 35% today after warning that Q1 revenue would be down roughly 15% versus prior guidance, to a range of $60 million to $62 million from $71 million to $73 million. Company management attributed it to "global economic weakness and cautious capital spending." Affymetrix first earned a profit in Q3 2002.

Computer memory interface developer Rambus(Nasdaq: RMBS) climbed almost 10% on news that a federal appeals court denied chip maker Infineon's(NYSE: IFX) request to reconsider the sweeping January victory it gave Rambus. Rambus shares have more than doubled since the January decision.

Websense (Nasdaq: WBSN) fell almost 20% after warning that Q1 revenues would be off about 1%. The company makes software that monitors employee Internet use.

Silver Lake Partners, a private buyout firm most recently known for its investment in hard-disk storage maker Seagate Technology(NYSE: STX), announced a $175 million investment in WorldCom bonds. The move is a sign that CEO Michael Capellas' resurrection efforts have some traction.

Unemployment was unchanged for March at 5.8%, though jobs were down 108,000.

Mexico said it would expand its highway system by 640 miles of toll roads. The government will pay a third of the cost and seeks investors, such as pension funds, for the remainder. No additional miles have reportedly been added to the system since before the 1994 peso devaluation. Previous private toll road experiments resulted in huge tolls and government takeovers.

And Finally...

Today on Fool.com:

Bob Bobala, Robert Brokamp, Mathew Emmert, Jeff Fischer, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Jackie Ross, Reggie Santiago, Dayana Yochim