"Aqua," the puppet show

During the real estate bubble the government pumped too much water out of the Delta. This caused such a loss of salmon smolts that now the commercial salmon season has been shut down for a year in California and Oregon. This means emergency relief must be found for fishing towns and villages dependent on the Pacific salmon fishery. Meanwhile, the credit crunch, in the wake of the crash of the real estate bubble goes on. Students can't get loans. Banks must increase their capital, and the California state Legislature must pretend it is coming up with a water policy. The size and the richness of the resources of the state are producing politicians performing an entertaining neo-Medieval puppet show called "Aqua." The strings are being pulled by arthritic giants.

Badlands ...

San Francisco Chronicle
End of coast's 150-year-old fishery looms...Carl Nolte

The ban on all commercial and sport fishing for chinook salmon in California and most of Oregon this year could be the beginning of the end for a whole way of life.
Commercial fishing is an industry that is deep in the heart of life along California's 1,000-mile coast, where fishing ports from Crescent City to Morro Bay have supported generations of fishing families.
Now, for the first time since commercial fishing began on the West Coast more than 150 years ago during the Gold Rush era, no boats will be permitted to put to sea to fish for chinook, the fabled king salmon that is the mainstay of the commercial fishery.
The ban is only for one year, but it could be a death blow to an industry that has been in decline for years. As recently as 15 years ago, 4,000 small boats fished off the California coast for salmon; now the salmon fleet numbers only 400...
The money is in the salmon fishing
The trouble is that skippers like MacLean count on salmon for 70 percent of their fishing income. There are other fisheries on the coast - crab, rockfish, herring - but the money to make the business pay is in the salmon...
Crab fishing is costly, needs a lot of gear
Why don't fishermen go for other fish? Fishing for crab is expensive. It requires a lot of gear, like crab pots. The season is at its peak right at the opening, in mid-November, and then declines rapidly. At the end of the season, not many crab are left.
A few salmon boats could fish in Alaska, but a permit is needed for that fishery. MacLean says a permit would cost $60,000 - too much for small-boat fishermen.
Then there are rockfish, just off the California coast. Rockfish are endangered, too...
The herring have disappeared, too....
It's tourists who feed Cannery Row now
The coming and going of fish is a bit of a mystery. John Steinbeck wrote about sardines and life in the Monterey canneries in "Cannery Row." The fish disappeared over a couple of years, and Cannery Row is now a tourist attraction, where restaurants offer "catch of the day," mostly farmed or frozen fish.
There seems to be no great mystery about the collapse of the salmon fishery.
"Salmon are trapped between human population growth, economic development, degradation of environmental quality and the politics of public policy," Montgomery wrote.
There are a lot of reasons the population of salmon returning to their spawning grounds on the Sacramento River and its tributaries dropped from 800,000 six years ago to 68,000 last year.
Some say the food chain in the ocean has changed; some say global warming has made the ocean too warm for the fish, and you can find fishermen who think the fishery has been mismanaged. Maybe it was overfishing. Maybe, as Fitzpatrick thinks, the fry from fish hatcheries were dumped in the bay from pipes, and, stunned, were eaten by predators.
Then there are the dams. Over the last 60 or 70 years, California has diverted most of the flow of its water from the Central Valley to farms and Southern California.
The rivers that drain the Sierra used to flow through the valleys and into the ocean; millions and millions of gallons poured through the Golden Gate.
First Shasta Dam diverted water from the Sacramento; then the Friant Dam was built to take water from the San Joaquin River. All these rivers and their tributaries were prime salmon runs...
Then the state built the California Water Project, diverting the flows of the Sacramento and Feather rivers. One result was the collapse of the delta smelt, a small fish that is thought to be the bellwether of the health of the Sacramento-San Joaquin River Delta.
All the salmon, returning to spawn or swimming downstream to the ocean, must pass through the delta. "The delta," said Collins, "is just a sewer now."
"Without water, the fish can't live," he said. "We sacrificed the fish for farms and to water lawns."
Whatever the reason, the salmon and the fishermen are in big trouble...
Portland Business Journal
Smith, Wyden and Kulongoski seek salmon relief

Oregon's two U.S. senators and Democratic governor have begun lining up relief funds after salmon fisheries were closed up and down the West Coast last night.
Sens. Gordon Smith (R) and Ron Wyden (D) asked Commerce Secretary Carlos Gutierrez to declare a "fishery failure" after the Pacific Fishery Management Council closed salmon fisheries along the West Coast. The declaration will allow Congress to provide disaster assistance for affected communities.
Oregon Gov. Ted Kulongoski has already declared a state of emergency for some coastal areas. He's dedicating $500,000 in strategic reserve funds to the fishing-reliant communities expected to suffer from the record-low projected salmon run.
The moves come after poor projections of available Sacramento River fall Chinook, as well as the expected dwindling numbers of coho salmon running from Oregon and Washington.
The fall run of Sacramento River chinook salmon typically helps fisheries catch more than 800,000 fish annually. This year's class of returning adults is projected at fewer than 53,000 salmon.
"This will be devastating to the communities and families on the coast that rely on salmon fishing for their livelihood," Kulongoski said in a statement. "Our job now is to help these communities make ends meet during this difficult time and to fight for federal assistance to help them for the longer term."
Smith and Wyden, in a letter, told Gutierrez that the season "will be the most restrictive in West Coast history, and will have an extremely negative impact on recreational and commercial fishermen and supporting businesses up and down our coastline."
Oregon and California fishing companies received $60.4 million in disaster relief last year after a slow 2006. ..
Modesto Bee
Regulators vote to cancel salmon season to save ailing chinook...DONNA GORDON BLANKINSHIP (AP)

Federal fisheries managers have voted to ban chinook salmon fishing off the California coast and most of Oregon this year to reverse the dramatic decline of one of the West Coast's biggest wild salmon runs.
The regulations approved Thursday by the Pacific Fishery Management Council are the most severe restrictions in the history of Pacific Coast salmon fishing.
The panel voted to allow limited sport fishing for coho salmon on holiday weekends off the Oregon coast, but no commercial or sport fishing for chinook salmon will be allowed south of Cape Falcon in northern Oregon.
The council's decision still must be approved by the National Marine Fisheries Service before May 1, the start of the commercial season...
Stockton Record
Coastal salmon fishing all but banned for year...Alex Breitler

SEATTLE - Fishery managers on Thursday all but shut down salmon fishing in the ocean for 2008, a move that will likely trigger restrictions for sport fishermen in California rivers and streams.
The Pacific Fishery Management Council banned fishing off the California and Oregon coasts, with the exception of a very limited recreational catch.
The new restrictions on West Coast salmon fishing were said to be the toughest in history...
The California Fish and Game Commission will decide in coming weeks whether any inland salmon fishing is permitted. A spokeswoman said the commission has been waiting for the council to act first.
In an analysis written last week, Peter Moyle, a University of California, Davis, professor and expert on native fish, said salmon have been declining for more than a century thanks to mining, logging, levees, dams and unregulated fishing.
Most recently, less food has been available in the ocean, perhaps causing salmon to "starve away." However, Moyle, too, points to the Delta as a long-term cause for decline.
The pumps trap fish and change the temperature and water flows in the estuary. Near Stockton, the San Joaquin River is too warm and polluted to support many salmon, and federal funds to restore the river have not materialized, Moyle wrote.
"Blaming 'ocean conditions' for salmon declines is a lot like blaming the iceberg for sinking the Titanic, while ignoring the many human errors that put the ship on course for the fatal collision," Moyle wrote.
The fishery council has been meeting all week in Seattle to decide a course of action. The council has said that even with a complete fishing closure, the number of salmon returning to spawn in 2008 may not be much higher than last year...
San Francisco Chronicle
Battling Upstream
The tribes on the Klamath know that as the river goes, so go the salmon...Glen Martin

The Klamath River surges just below Merk Oliver's house. Right now, the water is slightly turbid, clouded and green - perfect for steelhead fishing. The Klamath is the second largest river in California, following the Sacramento, and its watershed encompasses a landscape that seems removed from the rest of the state by time as well as distance. Freeways, the digital economy, the entertainment industry, industrial agriculture - up here they seem like ill-recalled dreams.
But what happens on this river affects Lower California greatly. It determines whether commercial fishermen and recreational anglers can take salmon - and whether there'll be fresh wild salmon in markets and restaurants in San Francisco and Los Angeles. Ultimately, it figures into the availability of water for the state's homes and farms...
But like most rivers in North America, the Klamath has suffered. Agricultural water diversions have depleted the river's once mighty flows; four moderately sized hydroelectric dams along the Klamath's main stem - plus a huge dam on its major tributary, the Trinity - have greatly reduced the spawning grounds for anadromous fish. ..
The Klamath always has been a major front in California's water wars, one that has waxed especially hot throughout the Bush administration...
The situation on the Klamath has far-reaching consequences - all the way down to Monterey. The scarcity of Klamath fish has resulted in multiple truncated commercial salmon seasons for California and Oregon, because the Klamath fish mingle with the nominally more plentiful Sacramento River salmon in the open ocean. As the Klamath goes, then, so go the fortunes of the West Coast's commercial fishing fleet - and the Bay Area availability of fresh wild local salmon...
Salmon fishing closed for California, Oregon
-- No commercial or recreational salmon fishing will be allowed off the coast of California and most of Oregon this year.
The Pacific Fishery Management Council voted Thursday to cancel the chinook fishing season in an effort to reverse the catastrophic disappearance of California's fabled run of the pink fish popularly known as king salmon...
Just hours after the vote, Gov. Arnold Schwarzenegger declared a state of emergency and sent a letter to President Bush asking for his help in obtaining federal disaster assistance. In addition, the governor's office announced that Schwarzenegger will sign legislation to appropriate about $5.3 million for coastal salmon and steelhead fishery restoration projects.
The Pacific Fishery Management Council, meeting in SeaTac, Wash., considered a variety of options for saving the salmon because too few fall-run chinook came back to spawn in the Sacramento River and its tributaries in autumn.
Fishing ban the only option
In the end, it decided the only option was to halt fishing throughout the salmon habitat all along the California and Oregon coasts, the first time that's happened since the federal agency was created 22 years ago to manage the Pacific Coast fishery.
Millions in losses
If the ban holds, it would mean the loss of $20.7 million that commercial and recreational salmon fishing brings into the California economy each year. The 400 or so commercial fishermen in the state stand to lose 70 to 80 percent of their annual incomes.
Losses in Oregon would top $9 million. At least 1,000 fishermen troll the waters for king salmon between Santa Barbara to Washington state...
Inside Bay Area
Pharmaceuticals flowing into Bay, hazards unknown
Dilution of chemicals may spare marine life from harm, experts suggest...Julia Scott

Headache remedies. Plasticizers. Insect repellents. Perfumes.
A laboratory list of man-made chemical compounds inhabits the murky waters of San Francisco Bay, their effects on underwater life unknown.
Many of these chemicals, such as polybrominated diphenyl ethers, phthalates, nonylphenols and musks, are a class of contaminants known as endocrine disrupters that were detected in all parts of the Bay in a study done in 2002. Wastewater treatment plants don't screen for them because the Environmental Protection Agency doesn't require them to, and they end up in the Bay after flowing down the drain or being ting flushed down the toilet.
Even less is known about the effects pharmaceuticals are having on the Bay. Acetaminophen was the only pharmaceutical compound detected in the water in the 2002 report by the San Francisco Estuary Institute, but wastewater agencies now say they fully expect that future Bay water tests will reveal a much wider range of drugs humans have flushed into the Bay, either in unused pill form or as something taken and excreted.
A recent Associated Press investigation revealed growing concern among scientists that more research is needed to assess the health effects of this accumulating body of pharmaceuticals, 100 different varieties of which have been detected in the drinking water supplies of 24 major metropolitan areas. The cities all receive water from rivers and reservoirs containing treated wastewater, and therein lies the problem.
From Las Vegas' Lake Mead to the Potomac River outside Washington, D.C., researchers have found strange effects in fish and toads exposed to treated water containing pesticides, hormones such as estrogen from birth control pills, and drugs in soaps and shampoos: male carp suddenly producing egg yolk proteins, kidney failure in vultures, algae with stunted growth...
Mike Connor, executive director of the San Francisco Estuary Institute, believes many of those chemicals are already in the Bay, although they are too diluted here to cause concern for the health of fish and ocean mammals.
Estrogen, steroids, chemotherapy medications — these are among the most common pharmaceuticals found in waterways that receive wastewater, and a forthcoming Estuary Institute survey of water-borne pharmaceuticals entering and leaving wastewater treatment plants around San Francisco Bay will reveal it is no different...
Many wastewater agency officials said pharmaceutical testing and restrictions are inevitable, although they're not looking forward to the burden it will impose...
Part of the problem is there are no reliable ways of testing for the hundreds of drug compounds on the market, and more are being developed every day, said Richard Luthy, chair of Stanford University's Department of Civil and Environmental Engineering...
Los Angeles Times
Conserving California's water
Do we need to focus more on reining in consumption, and are consumers too shielded from the real cost of delivering water? Lester Snow and Mindy McIntyre debate.
Today, Snow and McIntyre consider how best to conserve water. Previously, they discussed the political urgency of fixing the state's water crisis, the proposed peripheral canal around the Sacramento-San Joaquin River Delta, population growth and the filtering of ocean water.
Conservation without the pain...By Lester Snow

California needs to set the standard for water conservation.
Many communities have already invested in water efficiency and reaped the benefits from such programs as drought-tolerant landscaping and appliances that use less water. Last summer, water agencies throughout the state successfully implemented voluntary conservation programs to curb water use, after one of the driest winters on record.
But we know there is a lot more that can be done.
The California Water Plan Update estimates that up to one-third of current urban usage could be saved each year with existing technologies. This includes installing efficient sprinklers and drought- tolerant landscaping; expanding the use of water meters and upgrading an estimated 10 million toilets that were installed in houses and offices before the 1990s.
Last month, Gov. Arnold Schwarzenegger called for a 20% reduction in per-person water use in urban areas by 2020. Urban water users consume 8.7 million acre-feet per year, and under this plan, Californians would save enough water to serve more than 2 million families a year.
Water conservation has other important benefits. Lowering water demand stretches our water supplies and reduces pressure on the delta.
It saves energy that would otherwise be needed to pump and move water, and can reduce greenhouse gas emissions.
Saving water saves money too. Because most Southern Californians have seen water costs increase significantly in recent years, stretching those supplies through conservation make good sense.
The state is prepared to help communities make these changes. The Department of Water Resources recently announced that it will give $35 million in grants for local water agencies to implement water conservation programs.
This includes nearly $5 million to improve water-efficient landscaping, with two of the largest awards to the city of Los Angeles ($1.65 million) and the Municipal Water District of Orange County ($831,000). Landscaping consumes a large amount of urban water. About half of the typicsl home's water is used outdoors, so encouraging more efficient systems offers the greatest potential for urban water conservation.
Water is a precious resource. As our state grows, as our climate changes, as we balance environmental needs with reliable water supplies, conservation becomes increasingly important.
Lester Snow is director of the California Department of Water Resources
An AB 32 for water ...By Mindy McIntyre
Nice goal; here's some action:

It is a pleasure to agree with you, Lester, that water conservation is critically important to California's future. There is no question that California must take measures to reduce water consumption. The governor and his administration's call for a 20% reduction in per capita water use is a very good start. However, in order to actually implement that call, the governor will need to take water reductions as seriously as he has taken reductions in greenhouse gases, and make this the AB 32 of water.
We've seen in the past that statewide goals mean very little without dedicated momentum and directed implementation plans. In 1992, the state set a legally mandated "goal" of producing one million acre feet of recycled water by 2010. We are way off target toward meeting that goal, with only half of that production in place in 2008.
Fortunately, this governor has delivered on big initiatives before. When the governor took an interest in the very critical issue of climate change, he signed into law AB 32, the Global Warming Solutions Act of 2006. His action put into motion major statewide efforts to reduce greenhouse gas production in California by 25% by 2020. All state agencies are engaged in developing real implementation measures to deliver those reductions.
As with climate change, the legislature is considering passing two measures that would provide the governor with the policies and mechanisms to meet his water goal. Those two complementary components are Assembly Bill 2153 and AB 2175.
As I mentioned on Wednesday, Assemblyman Paul Krekorian's (D-Burbank) AB 2153, the Water Efficiency and Security Act, would decrease per capita water use. AB 2153 would require new development to be water efficient, and would implement a mechanism to fully mitigate all water demand from new development. The act would provide a powerful water-reduction tool that is not reliant on state bonds or existing water customers' water rates.
Another crucial component of implementing the governor's targets is AB 2175, which would promote increased water use efficiency by establishing numeric water-savings targets for urban and agricultural water use. AB 2175 would require the state to adopt a comprehensive water conservation plan with feasible, cost-effective water conservation targets. Each water agency in the state would then be required to develop plans for implementing its share of the conservation target.
If passed by the legislature, these two complementary bills would provide the action, action, action that is necessary to implement the governor's call and ensure that California effectively increases water efficiency. Without real action, California will not reduce water consumption. Instead, our people, economy and environment will experience the fallout of poor water planning.
Mindy McIntyre is the Planning and Conservation League's water program manager.
San Diego Union-Tribune
Lenders taking a pass on helping college students pay for education...Marcy Gordon, ASSOCIATED PRESS
WASHINGTON - Lenders are dropping out of the federally backed student-loan business in droves, fleeing an environment squeezed of cash because of the credit crunch.
The call for government action is getting louder, just as the piles of loan applications on the desks and kitchen tables of students headed to college next year grow higher.
Forty-six student-loan providers have stopped making the federally guaranteed loans, either temporarily or permanently.
Distress in the $330 billion market for auction-rate securities in recent months has rippled into the student-loan market, and several states have suspended their college-loan programs. The 46 lenders accounted for 12 percent of the federally backed student-loan market, according to FinAid.org, a Web site focused on student lending.
Companies including Washington Mutual, Sovereign Bancorp, College Loan Corp., CIT Group, NorthStar Education Finance, HSBC Bank and Zions Bancorp have stopped issuing federally guaranteed student loans in recent weeks. And state agencies in Iowa, Michigan, Montana and Pennsylvania have suspended college-loan programs.
The major federal student-loan program is providing an estimated $50 billion in loans to 6.4 million students in the current academic year.
Amid the housing-and financial-market turmoil and the $30 billion federal rescue of stricken investment bank Bear Stearns Cos., politicians are making the case that access to education, like homeownership, is a vital social goal that deserves protection...
No student has been unable to get a loan - a fact pointed out by Education Department officials and some education experts. With about 2,000 lenders participating in the Federal Family Education Loan Program, other lenders have been able to jump in when affected lenders stopped making loans, they say.
The entire student-loan industry has been under pressure for some time, however. Student-loan legislation that took effect in October halved the interest rates on federally backed student loans, but paid for that by cutting $20 billion in federal subsidies to student lenders. In addition, rising delinquencies starting last year on student loans became a problem - especially for private student loans, those that aren't backed by the government and have higher interest rates that aren't capped.
Sallie Mae, the nation's largest student lender, said in late January that it would cut back on its private loans to students at colleges with poor graduation rates. Another challenge for parents is that home prices are sinking in much of the country, making it harder to tap into home equity to pay tuition bills...
Washington Post
A Weekend to Start Fixing the World
As Finance Ministers Convene Here, Multiple Crises Test Their Ability to Cope...Neil Irwin and Michael A. Fletcher

Financial markets are tumbling. The world economy is starting to sputter. Food prices have shot up so far, so fast, that there are riots in the streets of many poor nations.
It's a hard time to be one of the masters of the global economy.
Those leaders -- finance ministers from all over the world -- are gathering in Washington this weekend to sort out their reactions to the most profound global economic crises in at least a decade. The situation could reveal the limitations that international economic institutions face in dealing with the risks inherent to global capitalism.
"There's got to be something coming out of the weekend, a way to visibly assume public responsibility for trying to limit the damage that financial markets can do to our society," said Colin Bradford, a senior fellow at the Brookings Institution. "The pressure is on politicians this weekend to come up with an answer. . . . What is the power structure going to do about this?"
The Group of Seven finance ministers of major industrialized countries meet today, and the governing boards of the International Monetary Fund and World Bank will meet tomorrow and Sunday. Their agendas: in the case of the G-7 and IMF, countering the breakdown in financial markets; in the case of the World Bank, food inflation that threatens to drive more of the world's poorest people into starvation...
Banks set to stumble again
Wall Street expects ugly first-quarter results from Citigroup and Merrill Lynch. And the worst may not be over for financials just yet...David Ellis

NEW YORK (CNNMoney.com) -- When Citigroup and Merrill Lynch each fessed up to nearly $10 billion in losses last quarter, investors believed the companies had finally scrubbed their books clean.
Those hopes were a bit premature.
"The fourth quarter felt like the kitchen sink [quarter]," said Jaime Peters, a bank stock analyst at Morningstar. "We are going to find out it necessarily wasn't."
Citi and Merrill are among a group of major financial firms due to deliver ugly results for the first quarter in the coming week.
The first quarter was marked by the near collapse of Bear Stearns, continued credit market woes and increased signs that the U.S. economy is indeed in a recession.
Of the six banks and brokers scheduled to report results in the next few days, three are expected to post a loss - Merrill Lynch (MER, Fortune 500), Citigroup (C, Fortune 500) and Washington Mutual (WM, Fortune 500), according to estimates from earnings tracker Thomson Financial.
JPMorgan Chase (JPM, Fortune 500), Wells Fargo (WFC, Fortune 500) and Wachovia (WB, Fortune 500) are expected to report a drop in earnings from a year ago.
And Bank of America (BAC, Fortune 500) is also forecast to report a steep decline in earnings from a year ago when it releases its results on April 21.
Overall, analysts anticipate that the banks' results won't be quite as bad as they were when they announced grim fourth-quarter results three months ago. But banks still find themselves squeezed by many of the same problems that plagued them at the end of 2007.
Old problems remain ... new ones crop up
Citi and Merrill are expected to announce yet another series of writedowns due to eroding values of mortgage-backed securities and leveraged loan portfolios.
Other areas have started to show increasing signs of deterioration as well. Home equity loans, for example, have become a source of trouble for banks as housing prices continue to spiral lower...
Hit on all sides
The bad news isn't limited to loan portfolios, either.
When the Federal Reserve aggressively cut interest rates earlier this year, the expectation was the cuts would boost banks' net interest margins, a key measure of the profit banks make from taking in deposits and lending them back out.
But competition for customers has been so tough that banks have been unable to cut their deposit rates as much as they would have in the past.
At the same time, companies with sizeable investment banking divisions like Citigroup, JPMorgan Chase and Merrill Lynch are expected to be hit by a slowdown in merger and initial public offering activity. Merger advisory and equity underwriting are two key sources of lucrative fees for investment banks.
Still, bank CEOs will do their best to soothe investors, even as there are few signs that their results will improve anytime soon...