11-24-08

 11-24-08Merced Sun-StarForeclosures make up an increasing share of resales as prices fall...Sanford Nax, The Fresno Beehttp://www.mercedsunstar.com/167/story/562745.htmlInvestors and first-time home buyers were out in force last month, snapping up foreclosures and driving up sales of existing homes, a market tracking company reported Thursday.Analysts say it is no coincidence that sales are soaring in regions where prices have plummeted. In Merced County, existing-home prices fell 43.2% to $130,300, and the area now is the most affordable market in the state. The median price of an existing home in Fresno County tumbled almost 32% to $168,000 last month from a year ago and on new houses fell 12.7% to $248,000. Bank-owned houses are increasingly the product of choice, totaling 56% of the 799 resales in October, said MDA DataQuick of La Jolla. Only a month earlier, foreclosures represented 54.4% of all the sales. They comprised 15.4% of the market in October 2007.Add new homes and condominiums, and the total number of houses sold in Fresno County last month reached 1,046, a boost of almost 40% from October 2007 -- and the highest tally since December 2006, according to DataQuick.Other central San Joaquin Valley counties showed similar results: Total sales in Tulare, Madera and Merced counties climbed 21.3%, 78.7% and 177.5%, respectively, as the correlation between falling prices and increased sales strengthened.Fresno real estate agent Michael Gavin said foreclosures are putting pressure on prices. He represents banks trying to unload houses they have repossessed, as well as traditional home sellers.The traditional sellers are having to drop prices to compete, said Gavin, who knows of a family who dropped their price $20,000."A lot of people are buying, and a lot of investors are buying," he said. "Activity has picked up for me."About 30% of his recent sales have been to investors. Banks, he said, have become more willing to deal as their fortunes sag under the weight of foreclosures.Lenders also are more willing to pay for repairs required by the Federal Housing Administration, which has emerged as the major lender in this economic climate, Gavin said.For example, he said Countrywide Financial agreed to spend $2,000 to paint the exterior and window sills of a foreclosure in addition to paying $6,000 in closing costs. That was on top of slashing the price $5,000, he said."Countrywide said, 'We want this off our books. Get it done,' " Gavin said.Sellers of new homes are finding it tough to compete with the abundance of foreclosed houses, even though their prices are falling.Production and sales are down so far that the president of the California Building Industry Association is predicting a shortfall of new housing."California needs to be building around 230,000 units per year to keep up with population growth, but we won't even build a third of that number this year," said Robert Rivinius.The association is trying to juice sales by pushing Congress to increase the temporary homebuyer tax credit of $7,500 enacted earlier this year, and to make it a credit that does not have to be repaid. Pesticide linked to disease in Valley...Barbara Anderson, The Fresno Beehttp://www.mercedsunstar.com/167/v-print/story/562750.htmlFor years, researchers have suspected commercial pesticides put people at risk for Parkinson's disease. Now evidence in the San Joaquin Valley suggests it's true.Researchers have found a strong connection between the debilitating neurological disease and long-term exposure to pesticides, particularly to a fungicide that is sprayed on thousands of acres of almonds, tree fruit and grapes in the valley.The fungicide ziram, the 20th most-used agricultural toxin in California in 2006, emerged as a common factor in a UCLA study of 400 people with Parkinson's in the valley."People exposed over a 25-year period to ziram have about a threefold increased risk of developing Parkinson's," said Jeff Bronstein, professor of neurology and head of the Movement Disorder Center at UCLA.More than 660,000 pounds of ziram were used on crops in Fresno, Kings, Madera, Merced, Tulare and Kern counties in 2006, the most recent year for which figures are available. About 1.3 million pounds of the fungicide were used statewide, according to the California Department of Pesticide Control.In Stanislaus County, 48,800 pounds of ziram were applied to crops in 2006, including 41,000 pounds on almonds. The fungicide was used on peaches and apricots, too. More than 52,000 pounds were used on crops in San Joaquin County.The research showed the fungicide kills certain brain cells, and their death has been associated with Parkinson's, Bronstein said. Now that researchers have a better understanding of what happens when exposure occurs, the information could lead to treatments to prevent or slow the progression of Parkinson's disease, he said.But it's too early to talk about restrictions or a possible ban, because state regulators have just become aware of the latest ziram research.The California Department of Pesticide Regulation has placed a high priority on assessing the risk of ziram, said Lea Brooks, assistant director of communications.The association between a fungicide and Parkinson's could help explain why the disease appears to be more common among people in the agriculture-rich valley than elsewhere in California. Researchers have long thought that's so, but no one knows how many people have Parkinson's disease.A Parkinson's registry being developed at the Parkinson's Institute and Clinical Center in Sunnyvale will track the prevalence of the disease. It should reveal how widespread Parkinson's is statewide and where the valley ranks.Another UCLA study of death certificates showed a higher rate of Parkinson's deaths in areas that reported higher pesticide use, including the valley. But researchers say death certificates don't capture the full story."No one knows the true incidence and prevalence of Parkinson's, and no one knows whether it's changing over time," said Dr. J. William Langston, a neurologist and director of the Parkinson's Institute.A Parkinson's registry probably would find more cases of Parkinson's in the valley than in other areas, said Dr. Abbas Mehdi, a Fresno neurologist."I'm quite convinced the environment is having quite a significant impact," Mehdi said, because there are too many patients for the size of the population.Grower advocates say it's important to keep ziram use in perspective. Ziram isn't the most popular pesticide, said Barry Bedwell, president of the California Grape and Tree Fruit League.About 46 million pounds of sulfur, the most common fungicide, were used on all California crops in 2006. That's 40 times the amount of ziram that was applied."From our perspective, it would be great to let people know that the No. 1 pesticide used is an organic compound -- it is sulfur," Bedwell said.Growers are as interested as anyone in making sure the chemicals used on crops are safe, Bedwell said."They live in these areas," he said. "These are their communities."Farmworker advocates are not yet familiar with the details of the ziram study, but in general, they are frustrated with pesticide safety regulations, said Erik Nicholson, national vice president of the United Farm Workers.The regulatory process "completely ignores the long-term exposure to pesticides and their effects on human beings," he said. Ziram may be another example, he said.Parkinson's patients and their families in the valley are eager for research to continue.Sarah Osuna, 79, of Madera began having tremors and other Parkinson's symptoms about 15 to 20 years ago. She was "handed a hoe" at 14 and became a farmworker. She wonders if years of exposure to pesticides triggered her disease. "It's a possibility, because I worked in the fields all my life," she said.Osuna's daughter, Kathy Mendonca, 43, of Madera also wants to know whether the environment is to blame. Parkinson's has robbed her mother of so much, she said. She no longer can garden and cook and care for herself."She falls a lot," Mendonca said.The valley is a logical place to study Parkinson's disease, said Beate Ritz, vice chairman of the Department of Epidemiology at UCLA and director of the Occupational and Environmental Epidemiology Program.The causes of Parkinson's disease remains unknown, but environmental factors, as well as genetics, are believed to be involved for people who develop the disease after age 50. Most Parkinson's patients get the disease as older adults. Genetics are believed to be more involved for people who get the disease at younger ages.UCLA researchers began enrolling people in the valley in the Parkinson's Disease, Environment and Genes study in 2001. In the past seven years, 400 Parkinson's patients have enrolled.The increased risk for Parkinson's from exposure to ziram was found by com- paring where residents lived with pesticide-use reports.California requires commercial pesticide applicators to record when and where they sprayed crops and what was sprayed.Researchers aren't saying ziram exposure causes Parkinson's, Bronstein said."That last absolute proof is going to take time," he said. Sacramento BeeCalifornia bulks up defenses against tide of global warming...Chris Bowmanhttp://www.sacbee.com/101/v-print/story/1422503.htmlCalifornia is building a second line of defense against global warming, one that will prepare the state for a harsher environment while the other continues to cut climate-changing emissions.The two-front approach acknowledges that rising sea levels, bigger floods, greater loss of species and other harsh effects of warming are inevitable, if not already occurring – no matter the state's success in slashing greenhouse gases.Unlike the pioneering save-the-planet mandates to tighten automobile exhaust limits and renewable energy standards, Gov. Arnold Schwarzenegger is not loudly trumpeting these defense moves: • The state Transportation Department is proposing to move a 3-mile stretch of ocean-hugging Highway 1 in Big Sur up to 475 feet inland, to keep ahead of the accelerating tidal rise and bluff erosion.• State wildlife officials are deliberating plans for "triage," to decide which species should be saved from global warming and which can't be saved.• The state's San Francisco Bay Conservation and Development Commission is consulting with Dutch engineers and holding an international contest to create designs for flood- resilient buildings.On Nov. 14, Schwarzenegger issued an executive order to identify the state's biggest vulnerabilities to rising sea levels and draft an "adaptation strategy." State, federal and local managers of transportation, public health, wildlife, water and power supplies are being tapped for this task, along with business and public-interest groups."It's saying we need to take action today," Anthony Brunello, the state deputy secretary for climate change, said of the governor's directive. "We need to figure out what we should be doing."To that end, the National Academy of Sciences will be asked to convene an independent panel of experts. The executive order calls on scientists to forecast a range of likely scenarios along the coast through the end of the century. That panel would recommend ways to minimize damage to coastal roads, beaches, sewage and water treatment plants, wetlands and marine life.Meanwhile, all state agencies are to immediately identify risks and account for them in planning their public works projects.Climate change alters projectsSome major projects under way already account for climate change.A 50-year, $1 billion effort to restore thousands of acres of former Cargill Inc. salt evaporation ponds to tidal marsh in San Francisco Bay will have levees to prevent flooding from rising seas anticipated with global warming."You will always have a viable and healthy estuary even as the waters rise," said Will Travis, executive director of the Bay Conservation and Development Commission.Likewise, state water planners are adding an extra foot of water depth in designs for a weir to control flows important to fish and drinking water quality in the south Sacramento-San Joaquin Delta."Hopefully, this will extend the life of the project," said John Andrews, executive manager for climate change at the state Department of Water Resources.Extending the survival of certain plant and animal species threatened by rising temperatures will present scientific and ethical challenges, said Terry Root, a Stanford University biologist.Root and other scientists are urging state and federal wildlife managers to categorize species according to their ability to withstand warming or migrate to more hospitable terrain. In some cases, she said, it may become necessary to move some species to save them."I didn't think I would ever have to say this in my life, but I do think we have to start prioritizing species," Root said in a September speech at the state's annual Climate Change Research Conference in Sacramento.Root reluctantly calls such categorizing "triage.""Do we save this species or do we let this species go?" she said. "It is not an easy thing to be working on. It's going to be exceedingly painful."Change of direction; big costSome of the needed changes will be expensive.The surf just north of Hearst Castle has been rapidly gnawing away at bluffs where Highway 1 hugs the shoreline, despite the rock facing installed by Caltrans."Rather than building up riprap and losing beach, we have been working with Caltrans on long-term solutions," said Tami Grove, an official with the state Coastal Commission, which regulates beach armoring and access.Caltrans came forward in 2001 with a proposal to realign almost 3 miles of the highway, between the Piedras Blancas Lighthouse and the Arroyo de la Cruz Bridge in northern San Luis Obispo County.Global warming weighed into the planning two years later, Grove said."Caltrans knew they had to realign. The question was how much. They had to factor in sea level rise," Grove said. "Our geologists and engineers worked with them to try to anticipate as we could the erosion that would be occurring."Engineers figured the road should bend as much as 475 feet inland to protect the highway from erosion and storm surges for the next 100 years.The $50 million project, which requires approvals from the coastal commission and San Luis Obispo County, would start in 2013. Rock armoring would be removed from the beach, and bicyclists would replace motorists on the abandoned stretch of roadway, Grove said.Other threatened sections of Highway 1 include those along Pescadero Beach in San Mateo County and Gleason Beach in Sonoma County, Grove said.The governor wants, by mid-February, a Caltrans vulnerability rating of coastal roads and bridges, taking into account higher rates of erosion, land subsidence and storm surges.Although sea level rise has been occurring since the end of the last ice age, its pace has accelerated in the past century as a result of global warming, according to the Intergovernmental Panel on Climate Change, the leading international network of climate scientists.The tidal gauge at the mouth of San Francisco Bay – the longest continuously operating gauge in the Western Hemisphere – has recorded a 7-inch rise in sea level in the 20th century.A governor-appointed panel of scientific advisers on the Delta recently urged him to prepare for another 16 inches of sea level rise by 2050 and 55 inches by 2100. Projections are based on the expansion of warming ocean water and melting of continental ice sheets and glaciers.A 55-inch rise would likely overwhelm Delta levees. A major flood could send saltwater through the drinking water intakes in the south Delta, contaminating supplies for 25 million people in the Bay Area and Southern California.Planning for a larger S.F. BayAll the global warming predictions of accelerating sea-level rise have turned the mission of at least one state agency on its head.The state Legislature created the San Francisco Bay Conservation and Development Commission in 1965 to keep the estuary from shrinking. Diking and filling the bay to make room for ports, runways, garbage dumps and industry had reduced the size of the open waters by nearly one-third."Now, with sea-level rise, the bay is getting bigger, and we have no authority to do anything about it," said Travis, the commission's executive director.The commission is pushing for building designs that can withstand or even rise above flooding.Maps posted on the commission's Web site illustrate 2,100 global warming scenarios: Large portions of Bay Area cities, including airport runways, are swamped by 3 feet of tidal water."We have to stop thinking of protecting the bay the way it is now and abandon the notion of restoring it the way it was," Travis said. "We need to design a new bay to account for different water levels, different salinity, different temperatures and probably different species." Hard rock mining project mulled...Loretta Kalbhttp://www.sacbee.com/101/story/1422558.htmlA 583-acre open stretch south of Folsom could become home to Sacramento County's first hard rock quarry.The proposal, which promises a new local source of quality material for foundations and road construction, has received little countywide notice to date.But the project known as Teichert Quarry should draw keen interest by the time it reaches the Board of Supervisors. The project is the first of three proposed for hard rock mining in an area known largely for its ranches and grazing lands.Combined, the three could produce nearly 780 million tons of material superior to what is yielded from area surface mining.The quarry sought by Teichert Aggregates of Sacramento would operate for 25 years.The other two projects, Walltown Quarry by Granite Construction Co., and Barton Quarry, by DeSilva Gates Construction in Dublin, are seeking to operate for 100 years.Environmentalists, such as Alta Tura of Habitat 2020, are watching the projects. Tura said there is concern that the projects will induce growth, that related road improvements will lead to more development and that more industrial projects would operate near the quarries."We need to preserve open space," Tura said. "This is one area where we still have very large parcels and ranching going on. The environmental community feels this is a very good use of the land."So far, only the draft environmental impact report for the Teichert Quarry has been released. But it addresses the expected cum- ulative effects of all three projects.Each quarry would excavate to varying depths. Teichert's would extend to 200 feet below ground. Walltown and Barton would go deeper, 400 feet and 300 feet, respectively.Including land buffers, the three operations would encompass a combined 2,400 acres.Trips in and out of the plants to haul materials are generating perhaps the most concern.Thousands of truck trips would occur each day, said Dave Miller, community development director for the city of Folsom.The constant flow of trucks would represent a "tremendous amount of traffic" through the city's sphere of influence, he said. A sphere of influence is an area targeted for future growth.That worries some local ranchers, too.Frederick Hegge, chairman of the Cosumnes Community Planning Advisory Council, owns 30 acres on Scott Road, which runs west of the Teichert site.He understands the need for raw materials."You have to mine where the rock is," Hegge said.But he added, "If you count all three mines and the conditions of the roads, it's going to be a mess."On Dec. 10, the Cosumnes council will decide whether to support the Teichert Quarry, Hegge said.The vote will be advisory to the Sacramento County Planning Commission, which should hear the issue next year.But Teichert project manager Jeff Thatcher said the volume of haulers to and from the site will be far less intrusive than the worst-case scenario presented in the environmental report.The three quarries cannot begin operation at the same time, he said. And it's unrealistic to expect market demand to reach levels that require full-scale production.Teichert also aims to ensure a continued supply of construction materials for the market as existing aggregate mining operations play out."There is no place else in the county where we can find the high-grade supply" to provide needed materials once aggregate mining is exhausted, Thatcher told the Cosumnes council in October. "Without these aggregate sources, there will be nothing left in the county." Stockton RecordGroup says it's against Spanos deal...David Sidershttp://www.recordnet.com/apps/pbcs.dll/article?AID=/20081124/A_NEWS/811240319/-1/A_NEWSSTOCKTON - Developer A.G. Spanos Cos. agreed when the city approved construction of Spanos Park West that the subdivision would include a certain amount of multifamily housing. But after fulfilling a third of its obligation - and after building a shopping center and selling land to Wal-Mart for a planned store - Spanos told the city it has no more room to build.In five or six meetings over several months this year, the company and City Manager Gordon Palmer negotiated a deal that would relieve Spanos of its remaining obligation and allow it to build multifamily homes elsewhere or, if Spanos prefers, to pay a per-unit fee of $2,000.Palmer, Mayor Ed Chavez and City Attorney Ren Nosky said the amount is reasonable. Eric Parfrey of the Sierra Club said it is not."That ought to cover, what, the front doormat or something?" he said. "That is pretty insulting. The city should just not even bother."The construction of townhouses, apartments and other high-density housing matters to city planners because such homes typically are more affordable and more conducive to mass transit than are traditional, single-family homes. And in 2002, when the council approved construction of Spanos Park West, Stockton required that the subdivision include 935 high-density units. The developer so far has built 308 units, in an apartment complex off Interstate 5.Spanos originally planned to build hundreds of units more in the subdivision. But in 2004, it sought instead to expand commercial building at the site, including a Wal-Mart.Stockton's administration that year favored the construction of retail centers at the city corners - in large part for the sales tax revenue they could provide - and it encouraged Spanos in its endeavor.Mike Hakeem, an attorney for Spanos, said he told Palmer in discussions this year that the city's support of commercial development at the site made its high-density housing requirement unenforceable. The city could have chosen one or the other, he said, not both. Nosky disagreed.The two sides compromised and recommended a deal.The Stockton Planning Commission took up the proposal Nov. 13, the same evening it blessed Spanos' bid to build another subdivision, The Preserve, also on the city's northwest side.Hakeem and Palmer proposed that Spanos fulfill its commitment in Spanos Park West by building 488 high-density units in two other planned developments, Crystal Bay, which was approved earlier this year, and The Preserve, which the council is expected to approve next month. The company also would build 157 high-density units downtown, or pay a per-unit fee of $2,000."There's no secret that our strong first choice, clearly, from a business as well as a political and practical solution, is to build the units," Hakeem told the commission. "That's what we do for a living."Hakeem said Friday that Spanos is interested in two sites downtown. He declined to identify them.No one at the Planning Commission hearing opposed the measure, and the body approved it without dissent. The council is expected to adopt the deal next month.Parfrey said he will protest. He said $2,000 is nowhere near enough to pay the cost of building an apartment unit. A per-unit fee $10,000 to $30,000 would be more appropriate, he said."It's an appalling move by the city staff," Parfrey said. "I cannot believe that they are allowing Spanos to get out from a commitment to actually build."Palmer and Hakeem said Spanos initially offered a per-unit fee of $1,000. Palmer said he could not build an apartment unit for $2,000, but that the money, should Spanos choose to pay instead of build, could be leveraged by nonprofit builders to fund construction.Palmer and council members said Spanos is more likely to build than to buy out.Councilman Clem Lee said Spanos, whether fairly or not, has "taken some hits in the past year and a half" from critics claiming Spanos' interest in building is only on the city's north side, not downtown."I think they are committed to the core, and they want an opportunity to prove that," Lee said. "I think that's what this is."The deal, if approved, would afford Spanos 10 years to build homes or pay, or a combination.The planned Wal-Mart at Spanos Park West, meanwhile, has yet to be built. After lower courts ruled that the city's 2004 approval of the store was illegal, the case has been briefed before the California Supreme Court. A ruling has not yet been made.San Francisco ChronicleUC to review rehired but pensioned retirees...Tanya Schevitzhttp://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/11/24/BA48121D36.DTL&type=printableThe University of California plans to review hundreds of double-dipping pensioners, many of whom were rehired for their old jobs - occasionally at a higher salary than before they retired. The university's use of retirees drew attention in April after UC Berkeley Police Chief Victoria Harrison left with a lump sum $2.1 million retirement package and then was immediately rehired for her old job - with a pay raise. Some months later, UC's governing Board of Regents adopted stricter regulations on who may be rehired and for how long. According to a university database reviewed by The Chronicle, there were 1,900 pensioners on the payrolls of the 10 campuses and the university's headquarters last February. The review also found widespread violations of guidelines that limited retired workers to no more than one year of re-employment and generally no more than about 19 hours of work each week.At least 440 pensioners were hired to work for an indefinite period and apparently are not limited to the one-year rule. Roughly 20 percent of those rehired - 348 employees - were working more than the maximum allowed hours, with 181 working fulltime. According to a university spokesman, rehired pensioners who appear to violate earlier guidelines will be reviewed and brought into compliance with the new policy. "Any existing cases that involve variances will come forward for review under the new reporting procedures," said UC spokesman Paul Schwartz. The regents' new policy tightens restrictions, barring rehired retirees from working more than 17.2 hours a week - or 43 percent of a regular work week. It also says there must be a written explanation of the special circumstances requiring the retired employee's services and that regental approval is required for any retirees rehired at a salary of $205,000 or more. Presidential approval is needed for extensions.The university defends the practice, saying that it is common practice among employers to rehire retirees and that the numbers are small in comparison to the university's overall workforce of 170,000 employees."Our rehired retiree population is comprised mostly of part-time employees in staff and academic positions, and represents a very small percentage (0.01) of our overall workforce," said Schwartz. He said that about 1,084 of the rehired workers were staff, 595 were in academic positions, including professors and researchers, 169 were management or supervisors and 62 were in unspecified classifications.The cases that may have to be reviewed span the system. At UC San Diego, for example, Ruth Covell retired in September 2004 from her $165,000 a year job as associate dean for capital planning to collect her $151,000 annual pension. She was rehired as an associate dean a month later to help the health sciences division with the transition to new leadership. She's still there, collecting her pension while being paid about $71,000 a year for working less than half time under a contract. Her contract won't expire until September and could be extended if she is needed longer, officials said. She did not respond to a request for comment.At UCSF, Stephen Barclay, the campus' senior vice chancellor for finance and administration, retired on July 1 to begin collecting his $189,000 annual pension, with a promise he could return a month later at 60 percent time - equaling an annual salary of $216,000. In addition, Barclay, 61, will be eligible for a bonus of $32,472.UCSF Spokeswoman Corinna Kaarlela said UCSF Chancellor Michael Bishop asked Barclay to come back on a recall appointment because Bishop knew he was going to announce his own retirement soon."Chancellor Bishop believed that a recall appointment would provide continuity of leadership" until his successor could appoint a new vice chancellor, Kaarlela said. At UC Berkeley, Robert Hamilton retired on July 1, 2006 as the principal development engineer in the electronics research laboratory to begin collecting his $93,918 annual pension. He was rehired about a month later, full time and indefinitely for $116,437 a year - more than the $101,585 compensation he received in the same position before retirement. He declined to comment. Bob Stern, president of the Center for Governmental Studies, a Los Angeles nonprofit, said that it is clear that UC officials think nobody is watching."I'm sure these employees are valuable, but if there is a rule, it should be followed. I'm sure in a few cases, they are needed but I'm sure there are very few cases," he said. "It shouldn't be common and it should be only in exceptional cases."Contra Costa TimesCSU is wrong to give big raises now...MediaNews editorialhttp://www.contracostatimes.com/opinion/ci_11044886CALIFORNIA STATE UNIVERSITY trustees tell us that, like many other services in this state, money is going to be tight over the next two years thanks to that nasty deficit coming from Sacramento. As a result, as many as 10,000 qualified students will be turned away and campus budgets will be slashed. Sounds familiar? In this case, not so fast.This plan of action coming from a CSU trustee meeting in Long Beach arrives a day after a Board of Trustees committee revealed that Chancellor Charles Reed and trustees have had the audacity of giving out hefty raises and salaries this year at a time when economic troubles were evident and the possibility of hurting student achievement was very likely. What are these people thinking?Reed, himself, approved the salary increases of up to 19 percent for nine vice presidents at four campuses and approved 11 new appointments of vice presidents at nine campuses, some with salaries as high as $225,000. The trustees reviewed those raises and decided to add to the mix and endorsed a separate 10 percent salary raise for an interim vice president who is expected to become permanent. In addition, they also backed a move by Reed to bring on a vice chancellor for development for $240,000 a year, although the CSU system has been operating just fine without one for nearly six years.At the same time, all 23 campuses are mandated to cut budgets by around 7 percent. In response, some schools are eliminating or cutting back lecturers and part-time faculty. Obviously, vice presidents are more vital than instructors. That might be CSU's opinion, but it's not ours. Perhaps these vice presidents are doing a good job, but there are plenty of state employees out there doing good jobs who are either getting their salaries slashed or, worse yet, receiving pink slips.Ronnie Higgs is the interim vice president of student affairs at CSU Monterey Bay; do we really need to raise his salary $22,500 to $140,004? Reed says Susana Gajic-Bruyea, vice president of university advancement at CSU Stanislaus, is doing excellent work and her salary increased $12,996 to $143,004. Was that really necessary at this time?Meanwhile, the trustees Committee on University and Faculty Personnel backed unanimously a 10 percent pay increase for Gail Brooks, an interim vice chancellor of human resources. She stands to make $255,200. The timing on this could not have been worse. The final straw comes with the recent hiring of Garrett Ashley as vice chancellor for university relations and advancement. The position was vacant for years, yet CSU thought this was the perfect time to pay someone $240,000 a year plus $40,500 to cover brokerage commissions, escrow fees and other costs to compensate for selling his home in Sacramento.Reed and vice chancellor Richard West had been performing these duties, and West is departing in December. Reed said, "I'm too tired."We're sorry to see Reed is so fatigued, but what about West's replacement? Can he or she do the same duties or does this mean another juicy salary is on the horizon as more high school graduates are forced to flood the community college system? It's obvious CSU needs to work on priorities and realize the system's purpose is to teach everyone who qualifies. Shutting the doors on bright futures to fill the pockets of vice presidents is the wrong answer. CSU should be embarrassed.Monterey HeraldPlan calls for overhaul of Delta policies...MIKE TAUGHERhttp://www.montereyherald.com/portal/search/ci_11056337?IADID=Search-www.montereyherald.com-www.montereyherald.com&_loopback=1The "Delta Vision Strategic Plan" released in October calls for a complete overhaul of the way the Delta — the West Coast's largest estuary and a source of water for 25 million Californians — is managed. Developed by a panel appointed by Gov. Arnold Schwarzenegger, the proposal addresses water deliveries, the environment, the local economy, state water policies and overall management. Recognizing that any fix will take many years, and perhaps decades, the plan calls for a series of short-term actions that, while offering no permanent solution, are meant to improve water supplies and the environment at relatively little cost. Those actions include information gathering, installing a new fish protection screen at the forebay that serves state pumps and stockpiling rock and other emergency response materials around the Delta to be ready in case of a levee break. The recommendations are not binding and the plan is under review by a committee of cabinet members and state Public Utilities Commission President Michael Peevey. The plan contains 73 recommendations grouped to meet seven goals. The goals include: · Legally acknowledge the coequal status of the Delta ecosystem and water supplies. Panel members observed that historically the environment has taken a back seat to water deliveries and recommended the state constitution be amended to put those values on equal footing. · Recognize and enhance the unique cultural, recreational and agricultural values of the Delta. · Restore the Delta ecosystem. · Promote statewide water conservation, efficiency and sustainable use. · Build new conveyance and water storage facilities. The report says it is likely that the best option to convey water from north to south is to build a new aqueduct to take water from the Sacramento River near the capital directly to pumps near Tracy but only as part of the larger Delta Vision package. · Address the threat of flooding through better emergency preparedness, land-use regulation and policy and develop a plan to strengthen high-priority levees. · Establish new agencies to improve governance. The Delta Vision Task Force was composed of seven members: Phil Isenberg, a chairman of a similar task force that established marine reserves off the coast; Sunne Wright McPeak, former Contra Costa County supervisor; Monica Florian, Richard Frank, Thomas McKernan; William Reilly, former administrator of the U.S. Environmental Protection Agency under President George H.W. Bush, and Raymond Seed. Los Angeles TimesEPA, with White House nudge, eases rule on lead emissionsCritics say the change, which leaves out dozens of factories from regular emission checks, undermines efforts to guard children's health...Michael Hawthorne, Chicago Tribunehttp://www.latimes.com/news/science/environment/la-na-epa24-2008nov24,0,1786967,print.storyReporting from Chicago — Looking to bolster the fight against childhood lead poisoning, the Environmental Protection Agency last month approved a tough new rule aimed at clearing the nation's air of the toxic metal.But at the last minute, federal documents show, the Bush administration quietly weakened a key provision, exempting dozens of polluters from scrutiny. A new network of monitors that is to track lead emissions from factories has been scaled back.Critics say the change undermines a rule that otherwise has been widely hailed as a powerful step in protecting children's health.The federal rule was prompted by compelling research showing lead is more dangerous than had been thought. Even low levels of the toxic metal in young children have been linked to learning disabilities, aggression and criminal behavior later in life. Many scientists say there is no safe level of exposure.Faced with a court order to act more aggressively, the EPA last month lowered the maximum amount of lead allowed in the air. The new standard, 0.15 micrograms per cubic meter, is 10 times more stringent than the standard set in 1978.To help meet the new limit, the EPA had planned to require lead monitors next to any factory emitting at least half a ton of lead a year. But after the White House intervened, the agency raised the threshold to a ton of lead or more, according to e-mails and other documents exchanged between the EPA and the Office of Management and Budget.As a result, dozens of factories won't be checked regularly. Federal and state officials debate the exact number, but a review of EPA records found the number of U.S. plants monitored could drop by nearly 60%, from 203 to 87."This sleight of hand by the administration ignores major sources of a dangerous neurotoxin," said S. William Becker, executive director of the National Assn. of Clean Air Agencies.The Obama administration could try to amend the lead rule, but that process would take months.National lead emissions have dropped 97% under the old standard, largely because lead was removed from gasoline. But cement plants, smelters, steel mills and other factories still emit about 1,300 tons of lead into the air each year, the EPA said.After tiny lead particles settle to the ground, they can stay there for years. Exposure can occur when people, especially children, handle or play with contaminated soil and then put dirty hands into their mouths."If we can keep bringing down blood-lead levels in kids, there could be considerable benefits over the years to a wide swath of our population," said Bruce Lanphear, a researcher at Simon Fraser University in British Columbia, Canada, and a member of a scientific panel that urged the EPA to set tougher lead standards.Dozens of monitors scattered across the country already check lead levels in the air, but the EPA estimated that it would take dozens more to track emissions from polluters releasing at least half a ton of lead.Industry lobbyists waged a fierce battle against the new standard and the additional monitoring. They argued that lingering dust from leaded gasoline and lead paint are a much bigger threat to children than ongoing industrial emissions.In written comments filed with the EPA and the Office of Management and Budget, lead battery manufacturers and recyclers said many of their facilities would fail to comply with the tougher standard. If factories had to reduce lead emissions, they said, companies would be forced to move operations to countries with lax environmental policies.The Assn. of Battery Recyclers wrote in comments to the Office of Management and Budget that a tougher lead rule would lead to "environmental and human health risks attributable to mishandling, improper disposal and illegal export of millions of spent lead acid batteries."A related organization, the Battery Council International, told the EPA that the more stringent monitoring standards would be "unjustifiably low."Last month, two weeks after lobbyists from the industry met with Bush administration officials, the White House ordered the EPA to raise the monitoring threshold to a ton or more, federal records show.An industry lawyer declined to comment, saying the publicly filed comments "speak for themselves."EPA officials said states could add lead monitors if they thought it was necessary."We selected an approach that would still ensure monitoring around those sources that have the potential to contribute to a violation of the standards," Cathy Milbourn, an EPA spokeswoman, said in a statement.Common ground over a besieged wetlandsAfter fighting for decades over its oil and land, conservationists, developers and Long Beach city planners are joining forces to let the Los Cerritos Wetlands grow wild again...Louis Sahagunhttp://www.latimes.com/news/local/la-me-wetlands24-2008nov24,0,3524228,print.storyLennie Arkinstall deftly steered his 14-foot aluminum skiff through murky tidal inlets teeming with shorebirds and strewn with trash in the heart of the degraded salt marsh known as the Los Cerritos Wetlands.The groundskeeper of the privately owned mosaic of mud flats and oil fields framed by power plants, tank farms, malls and busy highways a few miles east of downtown Long Beach wanted to show off the area's potential as a wildlife refuge.Ahead of him, a solitary common loon bobbed in shallows edged by spongy carpets of pickleweed stretching out to a mobile home park. Kingbirds preened on tangled heaps of rusted scaffolding. The flotsam and jetsam of the surrounding urban watershed littered shoals pocked with the burrows of ghost shrimp and horned snails: fast-food wrappers, beer cans, cigarette butts."This place has incredible potential," Arkinstall said over the putt-putt of his small outboard engine. "Just add a little water and cleanup work and, boom! You've got instant thriving ecosystem."After fighting for decades over its oil and land, conservationists, developers and city planners are joining forces to let the wetlands grow wild again. Earlier this month, the city of Long Beach announced a proposed land swap with a developer that would protect the 175-acre core of the wetlands in exchange for 52 acres of city-owned property. The city would then sell the marsh to the Los Cerritos Wetlands Authority for about $25 million.It won't be easy sealing the deal. The issues surrounding the wetlands' future are complex. But at the heart of the ongoing debate is a hope that the wetlands can bounce back and become a model of restoration and cooperation.Just in time, some might say. The wetlands on the Long Beach-Seal Beach border at the mouth of the San Gabriel River once stretched 2,400 acres. Today, little more than 400 acres remain, including the 175-acre parcel owned by developer Thomas Dean.The developer's willingness to consider a land swap rather than an outright sale of the wetlands -- bordered by Pacific Coast Highway, Studebaker Road and the Los Cerritos Channel -- was key to bringing the warring parties together.In return, Dean would get a bundle of underutilized city property, including a 29-acre parcel known as Sports Park -- a weedy crop of hills studded with oil pumps and abandoned corrugated metal structures -- and a 12-acre public service yard housing welding, paint and locksmith shops, and stacks of streetlight stanchions.If all goes according to plan, commercial and light industrial development on those parcels will generate jobs and taxes, and Dean will keep the mineral rights on the wetlands, allowing him to continue pumping an estimated $3 million worth of oil a year."Long Beach will have an oasis in an urban environment," Assistant City Manager Suzanne Frick said. "The ability to open it up for everyone to enjoy is amazing."The Long Beach City Council has begun workshops with neighborhood associations, conservation groups and others to map a strategy for completing the swap and launching a restoration program.The issues are daunting. Many low-income residents on the industrialized west side of Long Beach are fuming over the proposal, which they believe would mostly benefit the city's wealthier eastern half. Of particular concern is the city's offer to trade Sports Park, which has long been considered a potential home for soccer, football and baseball fields in an area in need of recreational opportunities.Long Beach officials have said the financially strapped city lacks the estimated $50 million needed to develop the sports park site, which has become a critical component of the land swap. But City Councilwoman Tonia Reyes Uranga, whose 7th District includes much of the west side, said the proposal underscores what she called an ongoing "tale of the haves and the have-nots in Long Beach.""Residents in east Long Beach enjoy 16 acres of parkland per 1,000 residents," she said, "while west Long Beach residents are left with one acre of parkland per 1,000 residents."Reyes Uranga, backed by west-side community organizations and organized sports groups, has vowed to oppose the swap unless the city first "frees up more space for our neighborhood youth."Mike Conroy, the city's director of public works and an architect of the swap proposal, said he has identified several parcels that could become additional park space for west-side residents.In the meantime, Arkinstall and Cal State Long Beach biologist Eric Zahn have been outlining options for reviving the estuary, a formidable task that would call for hauling out tons of rubbish, uprooting dense hedges of non-native pampas grass and thistle, and taking down dozens of Mexican fan palms. It might also include diverting runoff from local streets to form freshwater sanctuaries for migrating birds while replenishing the land.Over the last decade, Arkinstall has spent so much time collecting trash in the area that "the shorebirds think I'm one of them now.""Two years ago, I hauled out 70 tons," he said. During a recent tour of the wetlands, Arkinstall and Zahn suggested that the toughness of the place has helped preserve it. That resilience is reflected in the tenacity of rare plants -- estuary seablite and Southern tarplant, for example -- that cling to briny flats in the shadow of working oil rigs; in the three families of coyotes that recently had pups in secluded burrows; and in wandering skipper butterflies that lay their eggs only in salt grass.Arkinstall believes his trash removal has contributed to a dramatic increase in the number of endangered Belding's savannah sparrows, a dun-colored bird that nests in tidelands."Belding's savannah sparrows are thick here," he said. "We've got at least 33 pairs. Twenty years ago there were two pairs."There is also a tide in the wetlands that commands a cycle of growth and replenishment in inlets that provide havens for shellfish and marine plants and are patrolled by halibut, smoothhound sharks and schools of smelt.Said Zahn, peering through binoculars: "Watching endangered California least terns, a graceful gull-like bird, teach their young to fly and catch fish in those inlets is a beautiful thing to see."Foreclosures, delinquencies skyrocketing among 'prime' borrowersNationwide, 3.07% of prime mortgages were in foreclosure or at least 60 days late in the second quarter of this year, easily topping the previous record of 1.97% set in 1985...E. Scott Reckardhttp://www.latimes.com/business/la-fi-prime24-2008nov24,0,7558604,print.storyBy this year, the bleeding housing market had drained the equity from Judy Jones' home in Murrieta, but her life still seemed secure. She had a government job, after all, and a 30-year fixed-rate mortgage at 5.875%, unlike the shaky, variable-rate loans of many of her Inland Empire neighbors.Then her employer, the city of Corona, decided to deal with the economic slump by eliminating 112 positions, including Jones' job as a code enforcer. Last month, at age 61, she joined a surge of once-solid borrowers who no longer could afford their mortgages. "Every week at church, somebody else is out of work," Jones said. "I've been a homeowner a long time -- the last 10 years as a single mother -- and I never missed a payment. Now look at me. And it could be you -- any middle-class person who goes to work today could be walking out the door of a foreclosed house in a couple of months."Jones' concern is well-founded. Although soaring defaults on subprime loans and other dicey mortgages are a well-known cause of the country's financial crisis, delinquencies and foreclosures now are skyrocketing among "prime" borrowers -- people with good credit histories who documented their incomes when applying for their relatively straightforward mortgages.Nationwide, 3.07% of prime mortgages were in foreclosure or at least 60 days late in the second quarter of this year, the latest period for which the Mortgage Bankers Assn. has figures, easily topping the previous record of 1.97% set in 1985. In California, with a jobless rate topping 8% and home prices down more than 40% from their peak and falling, the situation is significantly worse, with 4.15% of prime loans seriously delinquent. That far exceeded peaks of about 2.6% reached in the recessions of the 1980s and 1990s. The epidemic of bad loans and lost homes among prime borrowers has only worsened since the second quarter ended, according to other, more recent data. By putting more foreclosed homes on the market, the trend is likely to further depress housing prices, intensify the mortgage-related crisis afflicting the financial system and exacerbate the recession most economists believe is already underway."We should be really worried," said Stephen C. Levy, director of the Center for the Continuing Study of the California Economy, a private research firm in Palo Alto. And as home prices continue to fall, delinquent borrowers are more likely than ever to end up in foreclosure."During the rising market, if you lost your job, got sick or your marriage failed you always had a parachute: Sell the house, pay off your mortgage and have something left to start again," said consumer finance expert Elizabeth Warren, a professor at Harvard Law School. "Or sometimes you could use your home equity line of credit to get by." But now, for most people, "that parachute has gone up in flames," Warren said.In California, delinquencies on prime mortgages could increase for years, said Christopher Thornberg, founder of consulting firm Beacon Economics in Los Angeles.One reason, he said, is that home lenders became so complacent during the housing boom that they did little to qualify borrowers besides having computers check a few facts." 'Prime' lost a lot of meaning in the insanity of the last few years," said Thornberg, who was one of the first experts to foresee the housing downturn. To be sure, the damage has been greatest in subprime mortgages, the high-risk loans tapped heavily during the go-go years by borrowers with the worst credit, the heaviest debt loads or the lowest down payments (and sometimes all three of those). In August, more than 43% of subprime loans nationally were in foreclosure or at least 60 days late in paying, a rate nearly double that of August 2007, according to First American CoreLogic's LoanPerformance unit, which tracks 82% of all U.S. loans. But problems with prime loans are increasing as fast or faster. About 7.5% of prime jumbo mortgages -- high-quality home loans too large to be sold to government-backed Fannie Mae and Freddie Mac -- were at least 60 days late or in foreclosure, according to LoanPerformance. That was more than three times the level of a year earlier. As a result, prime loans account for a larger proportion of foreclosures than they did in August 2007.In Murrieta, Jones said she never wanted anything other than a safe, prime loan. She has worked nearly nonstop since she was 19. She moved from El Cajon to Murrieta in 2005 with her adult daughter, who provided $20,000 of the $80,000 down payment on the new three-bedroom home. With property values still rising, they took out a second mortgage for home improvements in 2006, a 15-year loan for $40,000 with a fixed interest rate of 9.25%, bringing their total mortgage debt to about $355,000. Between her salary in Corona and her daughter's work at a preschool, the $2,276 in monthly home loan payments was manageable. Jones, whose recent duties in Corona included badgering the owners of foreclosed homes to maintain the properties, had survived a round of city layoffs this spring but was not so lucky when Oct. 2 arrived. "I came in that morning and I was gone by 10 a.m.," she said. To make things worse, her daughter recently had been laid off from the preschool.Jones figures she owes about $100,000 more on the mortgages than her home's current value. She said she notified Bank of America Corp.'s Countrywide unit, which funded both loans, soon after she lost her job -- the approach the lender urges troubled borrowers to take. But the Calabasas lender declined to talk about changing the loan terms so long as she was current on payments, she said. So she intentionally missed an Oct. 15 deadline, then called Countrywide again and asked for help. The lender offered to reduce her total payment to $1,500 for three months, adding the difference back to her loan balance, she said. But when Countrywide said the arrangement would damage her credit score, she declined the offer, dipping into her savings to make the full payments. Asked for comment early this month, Countrywide didn't dispute Jones' account. Representatives of the lender called later that day with a better offer. Jones said late last week that she was working with Countrywide to finalize a deal that would lower her payments for three months -- with an option for significant, longer-term modifications.Levy, the Palo Alto economist, said stories like Jones' and the ominous mortgage delinquency trends illustrated the "critical importance" for the economy of having lenders work to keep troubled borrowers in their homes. "The only practical help in sight is to get as many of these potential foreclosures modified as possible, so they come off the market," he said.California home stallingSacramento's plan to forestall foreclosures is put on hold...Editorialhttp://www.latimes.com/news/opinion/editorials/la-ed-foreclosure24-2008nov24,0,4535995,print.storyWe cheered when Gov. Arnold Schwarzenegger joined leading Assembly Democrats this month in seeking to reduce foreclosures. The governor's surprise move -- he had opposed most mortgage-related bills during the Legislature's regular session -- did not lead to quick action by lawmakers, however. That's not because the problem is any less urgent than it used to be. It's because the problem is no less complex.Last week, the Assembly Banking and Finance Committee held a lengthy hearing but did not act on a bill by Ted Lieu (D-Torrance) that would have required an additional 120-day delay before any home in foreclosure was repossessed and sold. Like the governor's proposal for a 90-day delay, ABX4 4 aimed to push lenders and loan servicers to adopt comprehensive plans for averting preventable foreclosures through temporary loan modifications. But when lenders objected, Lieu decided to try a revised bill in the new legislative session starting next month.Lenders are doing more to help troubled borrowers, and yet the number of homes entering foreclosure continues to grow. A major factor impeding loan modifications has been the resistance of the investors who actually own most of the troubled loans. Frequently, lenders sold their subprime and other nontraditional loans to Wall Street, which sliced, diced and repackaged them into securities. A trade group representing the buyers and sellers of those securities is trying to give loan servicing companies more guidance on what modifications would be acceptable, and that's a worthy effort. But its members need to follow the lead set by federal bank regulators, state attorneys general and Fannie Mae and Freddie Mac, all of which have embraced a streamlined approach to modifications in place of impractical case-by-case reviews.Not every borrower can or should be saved from foreclosure in an economic downturn. But it's in everyone's interest to give borrowers a break when a temporary interest-rate cut or other modification would cost lenders and investors less in the long run than repossessing and selling the homes. It may take an act of Congress to give loan servicing companies more freedom to modify loans owned by investors, if those investors don't do so themselves. In the meantime, state lawmakers should focus on ways to ensure that no foreclosure takes place unless the lender checks the feasibility of modifying the loan, and to measure how well the streamlined modification techniques are working.Washington PostFed's Role in Crisis Is Giant, if Opaque...Neil Irwinhttp://www.washingtonpost.com/wp-dyn/content/article/2008/11/23/AR2008112302700_pf.htmlWall Street analysts, congressional overseers and the media have parsed every detail of the Treasury Department's financial rescue program -- $250 billion and counting.Largely outside public view, however, the Federal Reserve is lending far more than that amount -- $893 billion, roughly the equivalent of the annual economic output of Mexico -- to help a wide range of institutions weather the economic storm.As of last week, the Fed's loans included $507 billion to banks, $50 billion to investment firms, $70 billion for money market mutual funds, and $266 billion to companies that use a form of short-term debt called commercial paper. It is considering a new program that would make billions more available to prop up consumer lending: auto loans, credit cards and the like.In lending these vast sums, the Fed is essentially substituting its own unlimited ability to supply cash for that of private markets, which are not functioning normally. The central bank is even fulfilling some of the original goals of the Treasury Department's $700 billion rescue program by allowing financial institutions to use securities that are difficult to sell as collateral for loans."The existing system of lending is broken," said David Shulman, a senior economist at the UCLA Anderson Forecast, which analyzes economic trends. "The Fed is coming in to do that lending. That's why they call it the lender of last resort."But unlike the Treasury's rescue package, which has elaborate disclosure requirements and oversight mechanisms, the Fed lending is occurring quietly and at the discretion of its five governors, as well as top officials of the 12 regional Fed banks. Timothy F. Geithner, president of the Federal Reserve Bank of New York and the Obama administration's expected nominee for Treasury secretary, has been a leading architect of the new lending programs.Following a long-standing practice designed to protect investor and depositor confidence in the institutions it deals with, the Fed refuses to name the banks and other companies accessing the cash. It has also declined to specify which assets institutions have pledged as collateral in exchange for loans, a decision that has drawn skeptical questioning from Capitol Hill and at least one lawsuit under the Freedom of Information Act. Fed officials argue that any disclosure along those lines would create a stigma for banks and others that need to borrow from the Fed, making the programs less effective at jump-starting lending."There's a concern that if the name is put in the newspaper that such and such bank came to the Fed to borrow overnight for a good reason, that people might begin to worry: Is this bank credit-worthy?" Fed Chairman Ben S. Bernanke told Congress last week. "And that might create a stigma, a problem, and might cause banks to be unwilling to borrow."Bernanke also said there is little chance taxpayers will lose money on most of that lending, because the central bank lends money only to institutions it views as sound and requires that the collateral borrowers put up be worth more than the amount of the loan.Outside experts generally agree that Bernanke has been prudent in his decision-making, but they note that Fed lending to support the purchase of Bear Stearns and the government takeover of American International Group entails greater risk than the central bank usually takes on.The expansion in Fed lending has come in the form of numerous new programs to inject cash into the financial system, attempts to combat a crisis in which banks and other firms are hoarding it. To enact those steps, the Fed has increased the size of its balance sheet and replaced the ultra-safe U.S. government bonds it normally keeps on its books with loans to banks and others.A year ago, the central bank had assets of $868 billion, of which about 90 percent was in Treasuries. Last week, it had assets of $2.2 trillion on its books, of which 22 percent was in Treasuries. Much of the remainder represents the new lending to banks and other financial institutions. Even the weekly report that summarizes the Fed's financial position has grown -- to eight pages from four pages a year ago.The Fed can essentially expand its balance sheet at will, reflecting its power to create money. Congress gave it even more leeway to do so in the bill that contained the $700 billion rescue package, by allowing the Fed to pay interest on bank reserves."People want to act like the Fed's balance sheet is limited," said Diane Swonk, chief economist at Mesirow Financial. "No, it's not. It's pretty much unlimited."The Fed's lending achieves some -- but only some -- of the goals of the Treasury Department's original financial rescue plan. The Troubled Asset Relief Program, which is now focused on investing money in banks, was originally intended to focus on the purchase of mortgage-backed securities.Although not purchasing such securities, the Fed has agreed to take them on as collateral. That has helped banks get access to cash. But banks are still exposed to further losses if the value of those assets continues to decline. And the lending is not jump-starting the market by serving as a buyer of last resort, which would be the goal of government purchases."It's kind of like TARP light," said Michael J. Feroli, an economist at J.P. Morgan Chase.By expanding its lending, the Fed is engaging in a form of economic stimulus known as "quantitative easing," which is a way for a central bank to try to fuel growth even when it has cut short-term interest rates to nearly zero.Fed Vice Chairman Donald L. Kohn acknowledged publicly last week that that is what the central bank is doing. Behind closed doors, Fed leaders are considering other ways they can spur economic growth beyond cutting their target for interest rates. (The federal funds rate, at which banks lend to each other, is currently 1 percent, and analysts widely expect it to be cut to a half-percent at the Fed's December policymaking meeting.)Perhaps the most promising option would be for the Fed to start buying the debt of Fannie Mae and Freddie Mac, the government-sponsored mortgage finance companies. Such a move would also be expected to reduce mortgage rates.The Fed has consistently rejected requests to disclose more information about which assets it is taking as collateral for its lending programs. Bloomberg News sued under the Freedom of Information Act this month, requesting the information; the Fed refused, responding that the information was protected because it is confidential commercial information, and because it is being kept by the Federal Reserve Bank of New York, which it argues is not subject to FOIA.At a hearing last week, Rep. Spencer Bachus (R-Ala.) asked Bernanke: "When do you anticipate letting the public know" what assets you're taking? Bernanke then argued that disclosure would be counterproductive -- his answer, in effect, being never.There is some reason for the Fed to keep quiet, said Shulman, of UCLA.In 1932, Shulman said, Congress demanded that the Reconstruction Finance Corp., a program that lent money to banks to try to contain the Great Depression, publish a list of who was getting public funds. As a result, there was a run on those banks."Congress should be careful what it asks for," Shulman said.CNN MoneyWal-Mart's chief for the Obama eraNew CEO Mike Duke has a chance to clean the political slate at the Republican-leaning retailer...Suzanne Kapnerhttp://money.cnn.com/2008/11/21/news/companies/walmart_ceo.fortune/index.htm?postversion=2008112119NEW YORK (Fortune) -- When Mike Duke takes over as the CEO of Wal-Mart on Feb. 1, he will be confronted with a vastly different political landscape than the one in which his predecessor, H. Lee Scott, operated for the past nine years.Not since the mid-term elections of 1994 has Washington seen such a seminal power shift, and that change is unlikely to favor the nation's largest employer. President-elect Barack Obama and a Democratic-led Congress are widely expected to champion issues that Wal-Mart has long opposed, such as expanded health care insurance and labor reforms.Earlier this decade, Wal-Mart (WMT, Fortune 500) defeated measures in Maryland and California that would have required employers to increase the amount of money spent on health care. This year, Wal-Mart discouraged employees from voting for Obama by telling them that the Democratic presidential candidate would almost certainly open the door to unions - a move that the company claimed could curtail jobs. (Good thing for Wal-Mart that Obama doesn't appear to hold grudges.) Wal-Mart says anyone who gave employees the impression that the company was telling them how to vote was wrong.Wal-Mart has not exactly had a cozy relationship with Democrats over the years. In 2000, when Scott was named CEO, 85% of Wal-Mart's political donations went to Republicans and 14% to Democrats, according to the Center for Responsive Politics, a nonpartisan group that tracks political contributions. Although that gap has narrowed this year (53% to Republicans, 47% to Democrats), Wal-Mart's funding of political action committees still skews overwhelmingly Republican by a margin of more than 2-to-1. The company disputes those numbers, saying 55% of its PAC donations go to Republican organizations with 45% going to Democratic ones. By ushering in a new CEO, Wal-Mart has an opportunity to clean the political slate. At the moment, there is little to suggest that Duke, 58, a former department store executive who joined Wal-Mart in 1995, will be vastly different from Scott in his political dealings.He has personally donated money to the presidential election campaigns of Mike Huckabee, George Bush and John McCain as well as to other Republican candidates, such as Alaskan Congressman Don Young, according to Political Moneyline, a web site that tracks political contributions.But sometimes a symbolic gesture is all it takes to shift the debate. "If you are going to make an argument to Washington that as a company Wal-Mart has changed, it doesn't hurt to have a new face at the table," says David Nasser, executive director of Wal-Mart Watch, a union-financed group often critical of the retailer.How Wal-Mart deals with the new power structure is a question that has plagued some of its associates. In the days following the Nov. 4 election, Scott received numerous queries from employees on the subject. His response, contained in an internally circulated e-mail, says that Wal-Mart is looking "forward to working with the new President and Congress, regardless of party."In some ways, Duke's appointment suggests that Wal-Mart's focus going forward will increasingly rest with foreign markets such as China and Brazil - far from the Washington corridors of power. (Wal-Mart's investors responded to Duke's appointment by sending the stock up $2.26, or 4.5%, to $52.92 on Friday.) Duke has led Wal-Mart's international division since 2005, a unit that now comprises more than a quarter of the company's $400 billion in sales. That percentage is only expected to rise in the future as Wal-Mart's domestic growth levels off.During his tenure as international chief, Duke had some hits, but also some big misses. In 2006, Wal-Mart withdrew from Germany and Korea, two big setbacks for the company. And despite taking control of its Japanese business in 2007, Wal-Mart continues to struggle there. Successes include Brazil, which has experienced phenomenal growth and serves as a model for Latin America, and India, where Wal-Mart scored a coup by forming a partnership with Bharti Enterprises to expand in that country despite local opposition from mom-and-pop retailers.As Wal-Mart fights critics of its labor policies at home - who have accused the retailer of sub-standard health benefits, low pay and sexual discrimination, among other complaints - there are signs that the company is already facing similar issues overseas. In September, Mexico's Supreme Court chastised Wal-Mart for paying employees partially in vouchers that could only be used at company stores. The court compared Wal-Mart to the Mexican dictator Porfirio Diaz, who ruled in from the late 1880s to 1911. Compared with those remarks, Wal-Mart may find Washington a friendly place.Existing home sales tumbleOctober decline is worse than expected as economic conditions keep buyers out of the market...Ben Rooneyhttp://money.cnn.com/2008/11/24/news/economy/existing_home_sales/index.htm?postversion=2008112411NEW YORK (CNNMoney.com) -- Sales of existing homes fell in October and prices continued to decline as potential buyers remain sidelined by the weak economy, according to a real estate group's report issued Monday. The National Association of Realtors reported that sales by homeowners slid in October to an annual pace of 4.98 million. That was down 3.1% from September's revised reading of 5.14 million. Economists surveyed by Briefing.com were expecting sales to have declined to an annual rate of 5.05 million in October. On a year-over-year basis, sales were down 1.6%."Many potential homebuyers appear to have withdrawn from the market due to the stock-market collapse and deteriorating economic conditions," said Lawrence Yun, NAR chief economist, in a statement. The national median existing-home price in October was $183,300, down 11.3% from a year ago when the median was $206,700. In September, the median existing-home price was $191,400.October's median existing-home price was the lowest since March 2004, when it stood at $183,200. That means that homeowners who has lived in their homes for 4-1/2 years are seeing their homes worth the same or less as when they bought them.Home prices were pushed down by a large number of foreclosures and distress sales, which distorts the comparison to last year's October median price, said NAR spokesman Walter Molony."About 45% of all sales in October were distressed sales," Molony said. Still, falling home prices suggest that the market is moving toward "price equilibrium," Molony said, though he added that the market still needs to work through a large number of properties for sale. Total housing inventory at the end of October eased 0.9% to 4.23 million existing homes, according to the report. At the current sales pace, that represents a 10.2 months of supply, which was up from the 10-month supply in September. Sales declined nationwide on a monthly basis. But sales in the West rose 37.5% over year-ago levels, suggesting that some buyers are taking advantage of distressed sales in overbuilt areas in California and Nevada. Foreclosures have been steadily increasing as the economy deteriorates and unemployment rises.A report out earlier this month showed that foreclosure filings increased 5% in October. RealtyTrac, an online marketplace for foreclosures, said 84,868 homes were lost to foreclosure last month. "The private market is still very weak indeed, and the next few months represent a severe test in the wake of the plunge in stocks and consumer confidence," said Ian Shepherdson, chief economist at High Frequency EconomicsWhy Citigroup got Detroit's moneyThe government wants the Big Three to prove they are worthy of a $25 billion loan but Citigroup didn't have to twist any arms to get another $20 billion...Paul R. La Monicahttp://money.cnn.com/2008/11/24/markets/thebuzz/index.htm?postversion=2008112413NEW YORK (CNNMoney.com) -- Poor Detroit. The heads of the Big Three automakers had to subject themselves to two days of Congressional grilling last week while they begged for a $25 billion loan. And what did General Motors (GM, Fortune 500), Ford (F, Fortune 500) and Chrysler get? Nothing. Nada. Zilch. They were told to go home and write up a viable business plan and to show that they wouldn't be coming back for more money a year down the road. (Adding insult to injury, Motown's hapless football team, the Detroit Lions, is still searching for its first victory. Ouch.)Meanwhile, Citigroup (C, Fortune 500), which just a month ago received $25 billion, had no trouble securing another $20 billion Sunday night. CEO Vikram Pandit didn't even have to fly his jet to Capitol Hill with hat in hand. (And oh yeah: the two New York football teams are a combined 18-4, with the Jets on Sunday upsetting the previously undefeated Titans. The Giants are also the defending Super Bowl champs. Go Big Blue!)Why the apparent unfairness? Daniel Alpert, managing director of Westwood Capital, an investment bank in New York, said that saving a bank like Citigroup has to take precedence over the auto industry. Even though a collapse of one or more of the Big Three could have major negative implications on the economy, particularly the unemployment rate, he said preventing a Citigroup bankruptcy could forestall an even worse shock to the already fragile financial system."This is dramatically different. Essentially, what the government needed to do is under no circumstances allow Citigroup to fail. You can't have a financial world without the major banks," he said.Talkback: Should the government be doing more to help the Big Three automakers?David Resler, chief economist with Nomura Securities International, added that he thinks bankruptcy could be an option for the Big Three whereas a bankruptcy for a bank would mean liquidation, similar to what happened with Lehman Brothers in September.And that is not something he thinks the government would allow to happen. "Citi stands at the center of the financial system. It's a huge company whose relations are intricately woven throughout the entire economy. The intent is shoring up the system in this near-term crisis, not necessarily one company," Resler said.Sure, there are some who argue that bankruptcy for an automaker would also be its death knell. But even if one or more of the Big Three go away, some suggest that the government may allow this simply because the Big Three deserves to fail because of decades of mistakes."There is nothing that Detroit has not done a lot in the past 20 years to gain any support from Washington or the public," said Bob Andres, chief investment strategist for Portfolio Management Consultants, the investment consulting unit of Chicago-based asset management firm Envestnet, which has $90 billion in assets. "There has to be an end. The government can't own everything in the country. They may have to draw a line and unfortunately Detroit may be it," he added.Still, it's not as if Citigroup also didn't make serious mistakes. And some argue that the guarantee of future loan losses may have been sufficient to prove to the market that Citigroup wouldn't fail and there was not really a need to give the bank even more cash. "I'm a bit dumbfounded as to what the urgency was," said Keith Hembre, chief economist with First American Funds in Minneapolis. Still, strange as it may seem, it's politically easier to deny Detroit than Wall Street. The Big Three is being singled out as the poster child for mismanagement and is being forced to jump through hoops to get money while the banks don't have to do much other than moan about short sellers targeting their stock to get more funding. At the end of the day, Alpert said that there are so many companies lining up for assistance, the government is going to have to prioritize and at least give the appearance that it isn't giving out cash willy-nilly. "Washington is Oz right now. Everybody is marching in asking for a heart, a brain or a lot of cash," he said. "What Congress told the Big Three is to go back and bring them the broom of the Wicked Witch of the West." Citi's 'slow, grudging nationalization'Monday's massive rescue package hasn't solved Citigroup's problems, says bank analyst Christopher Whalen...Katie Bennerhttp://money.cnn.com/2008/11/21/news/companies/benner_citi.fortune/index.htm?postversion=2008112414(Fortune Magazine) -- In just a few days Citigroup went from trouble to trauma as its stock price plunged amid sweeping layoffs and deep losses on some of its more esoteric assets. When news reports swirled that the megabank was considering a sale of part or all of the company, it was clear that Citi was singing from the same hymnbook as firms like Lehman Brothers, Wachovia and AIG had before they fell. The public's only question: What would the end game look like?Now we have our answer - a government agreement to shoulder hundreds of billions of dollars in possible losses and inject billions of dollars into the bank. FORTUNE checked in with bank analyst Christopher Whalen, co-founder of Institutional Risk Analytics and a prescient critic of Citigroup (C, Fortune 500) since 2003, when he said its riskier, higher-return strategy made it more vulnerable than its banking peers.Does this plan solve Citi's problems?This does nothing more than temper the problem, but, no, it hasn't solved anything. We have three main issues to deal with at Citi. The first two are the operational issues and obvious losses that are well known and that the bank and Wall Street have been grappling with for years. The third is the potential for huge losses on off-balance sheet assets that we can't see. We will see that no one will trust the situation at Citi because of these huge question marks that still remain.How does this rescue plan differ from the other bailouts we've seen in the past few months?The accurate term for what the government has done is "open bank assistance." It's similar to what the FDIC had to do when it was clear that Wachovia could no longer go on, except there is not a ready buyer in this case. The other big financial institutions have had parties willing to pick up the assets, but you won't see that with Citi. This bailout is more like a resolution. That means that the government essentially has to take control of Citicorp and become more and more involved with its operations until the bank ultimately is nationalized.But the markets rallied and people seemed to think that Citi now has time to right its ship. How can you talk about nationalization?Listen, no government organization wants to run Citi, nor do they have the ability to do so, so they keep the bank open and put money in. Treasury and both political parties will pretend that we can buy the assets and the taxpayer will emerge whole; and that may happen. But it will take years, and in the meantime the government will continue to inject money into Citi, play a larger role in its management and oversee the liquidation of its assets. Make no mistake. This is nothing more than a slow, grudging nationalization.Who will lose money on this deal?What the markets told us last week is that the common shareholder will someday be wiped out. The stock is up now but that's nothing more than relief. Wall Street will eventually respond to the essential problems that remain at Citi. Then the government will have to replace the common equity and drop the pretense that the taxpayer is nothing more than a passive investor helping out a bank and admit that we'll be the owners. Who knows whether the government will lose money.Is Citi solvent?If you combine opaque structured-finance products with current fair-value accounting rules, almost none of the big banks are solvent because that system equates solvency with asset liquidity. So at this moment Citi isn't solvent. Some argue that liquidity, not solvency, is the problem. But in the end it doesn't matter. Fear will drive illiquidity to such a point that Citi could be rendered insolvent under the current fair-value accounting system.What big risks remain?They have lots of capital markets exposure to deal with. The old off-balance-sheet game is over. They've already brought some of that stuff back onto their balance sheets, and eventually it will all have to come back on. Who knows how big those losses will be?What steps should Citi take now that the government intervention has bought it some time?One interesting play would be to get rid of its consumer business in its 30 markets outside the U.S., which is exceedingly expensive and higher risk to run. But more immediately and most important, Citi needs to put a real banker in charge, not someone like Vikram Pandit, who comes from the fund side. J.P. Morgan (JPM, Fortune 500) has problems too, but people have faith in Jamie Dimon because he knows how to run a bank. The same goes for [Bank of America (BAC, Fortune 500) CEO] Ken Lewis. Fund managers believe losses can become gains and wait them out. Bankers see losses as losses and avoid them.Are you surprised that Pandit wasn't forced to step down as part of the government aid plan?I'm astounded that he managed to stay on. He has to go if Citi is going to be able to make hard and necessary choices.Any ideas whom to bring in?Tell Citi to call Herb Allison [the former Merrill Lynch (MER, Fortune 500) banker and TIAA-CREF CEO who was appointed to lead Fannie Mae after the government takeover]. Maybe he's tired of Washington, D.C., and wouldn't mind stepping in to helpBush: More rescues like Citigroup possibleThe president says he told President-elect Obama about government rescue plan for bank...Jeanne Sahadihttp://money.cnn.com/2008/11/24/news/economy/bush_treasury_statement/index.htm?postversion=2008112411NEW YORK (CNNMoney.com) -- President Bush said Monday that the first step toward economic recovery is to stabilize the financial system - and that the government may step in to help financial institutions again the way it did with Citigroup."This is a tough situation for America. But we will recover. The first step is to secure our financial system," Bush said after meeting with Treasury Secretary Henry Paulson. "If need be, we're going to make these kind of decisions to safeguard our financial system in the future."Bush's statement came within 12 hours of an announcement that the federal government would step in to help Citigroup (C, Fortune 500), whose shares fell 50% last week on a loss of confidence. The Treasury, the Federal Reserve and the FDIC said the federal government would guarantee roughly $300 billion in losses at Citigroup on its troubled assets and inject $20 billion more into the bank. That new capital injection was on top of the $25 billion given to Citigroup weeks ago as part of the $700 billion bailout passed by Congress in October. The president said he'd spoken with President-elect Barack Obama about the decision. "Anytime we're to make a big decision during the transition, he will be informed, as will his team," Bush said. "Secretary Paulson is working closely with the president-elect's transition team. It's important for the American people to know that there is close cooperation."Bush's comments preceded a news conference to be held by President-elect Barack Obama in which he was to announce his economic team, including New York Federal Reserve President Timothy Geithner as Treasury Secretary.Bank bailout: Everything you need to knowWhy the Treasury's emergency infusion of dollars into banks just might work, and how you'll know if it does...George Manneshttp://money.cnn.com/2008/11/23/news/economy/250B_infusion.moneymag/index.htm?postversion=2008112411(Money Magazine) -- On Oct. 14, the U.S. Treasury announced it would spend $250 billion of taxpayer money to buy shares in U.S. banks. The feds hope that the infusion will resolve the financial crisis paralyzing the economy. Here, in 300 words or less, is everything you need to know about it. Why not the original $700 billion bailout plan? Because Treasury Secretary Hank Paulson's first idea - buying $700 billion of suspect loans that banks couldn't unload - didn't ease fears. The week after that plan became law, the S&P 500 dropped 18%. Investors were concerned that unless the Treasury wildly overpaid for the loans, it wouldn't save the banks, says University of Chicago economist Douglas Diamond. Why do the feds think the cash infusion will work? Simple math. Because banks can make more than $10 worth of loans for every dollar of equity, a cash infusion makes a bigger splash than using that same money to lop off bad debt. Plus, the tactic has succeeded elsewhere: When banks tanked in Sweden in the early 1990s, the government bought up stock as part of an ultimately successful bailout. What will be the final price for taxpayers? Unclear. "Before we can figure out what it's going to cost to do the surgery, we've got to stabilize the patient," says Frank W. Anderson, a longtime banking analyst who now teaches at the University of Texas at Dallas. The government hopes that the banks will repurchase the shares within five years, but since it will need to borrow to get the money for the investment, the national debt will rise. Still, letting lending freeze and bank failures run amok would likely be much costlier in the long run. How will I know if the cash infusion is working? Look for a loosening of credit as seen in a decrease in the TED spread, a measure of the banks' trust in one another. A week after this plan was announced, the spread had fallen.