9-22-08

 9-22-08Merced Sun-StarHome values continue their downward spiral in Central ValleyMedian values in Merced County down 47 percent to $150,000...J.N. SBRANTI, The Modesto Beehttp://www.mercedsunstar.com/167/story/461453.htmlDown again, darn it. Median home sales prices plunged further during August in Merced, Stanislaus and San Joaquin counties and throughout most of California.As usual, the housing meltdown was worst in the Northern San Joaquin Valley, according to MDA DataQuick sales statistics released Thursday.Buyers love a bargain.They can find plenty of them in Merced County, which has suffered the largest price declines in California.Merced County homes sold for a median $150,000 in August. That's down 47 percent in one year and 60.8 percent from the December 2005 peak. Merced prices haven't been this low in seven years. Last month, 549 Merced homes were foreclosed on, costing lenders $176.6 million.Stanislaus County median sales prices fell to $185,000 in August. That's a one-year drop of 41.3 percent. Even more depressing, it's 53.3 percent below what homes were selling for at the building boom's December 2005 peak.Stanislaus prices haven't been this low since the spring of 2002. Six years of appreciation have been wiped out.Blame foreclosures for the price drops. The Northern San Joaquin Valley continues to be the fore- closure capital of the universe...McCain, Obama differ on agricultural policiesNeither candidate has outlined a vision on federal farm policies...MICHAEL DOYLE, Sun-Star Washington Bureauhttp://www.mercedsunstar.com/167/story/464566.htmlWASHINGTON -- John McCain loves to hate federal farm spending.It's an easy target for the self-styled reformer and a reliable source of mockery. It also distinguishes the Republican presidential candidate from his Democratic opponent, Barack Obama, who's more traditional when it comes to farm subsidies.The agricultural-policy differences were apparent in 2006 when McCain sought to remove a $74 million grant program designed to help states promote sales of fruits and vegetables. In Senate debate, he likened the farm promotions to previous federal grants that funded artwork on airplanes..."John McCain is a tightwad," said John Block, a former agriculture secretary under President Reagan and now an adviser to McCain. "Without question, he would tighten down on spending." On the campaign trail, both Obama and McCain present themselves as agents of change. Neither candidate, however, has yet imposed his vision on federal farm policy.In part, both senators have placed their priorities elsewhere. Neither is a member of the Senate Agriculture Committee, which writes the once-every-five-year farm bill.McCain didn't vote on the initial Senate farm bill in December. Neither did Obama, and nor did several other senators then running for president. Neither McCain nor Obama offered amendments to the 1,360-page bill on the Senate floor. Instead, both primarily confined themselves to rhetorical positioning...Although McCain missed the final farm bill votes on May 15, he had inserted a written statement into the Congressional Record noting that he "proudly" co-sponsored an earlier amendment to tighten subsidy payments to wealthy farmers. But when that amendment came to the Senate floor in December, McCain also was absent. He was the only senator to miss the vote on the amendment, which failed narrowly.Obama, too, supported the failed amendment limiting subsidies. And like McCain, he missed the May farm bill votes. In a written statement, though, Obama praised the overall package of subsidies...Obama further showcased his own priorities by devoting half his 800-word statement to discussing the two topics of low-income food assistance and legal relief for black farmers who claim they were discriminated against."He does understand there's a need for investment (in agriculture)," said Rep. Dennis Cardoza, a California Democrat who's on the House Agriculture Committee. "He was supportive." ...Letter: Hoping for better...JOAN PORTER, Merced http://www.mercedsunstar.com/177/story/464560.htmlEditor: Sam Walton founded Wal-Mart in 1962. His idea was to buy products in bulk at the lowest possible price so he could sell below his competition. In the United States, you can expect a Wal-Mart within 60 miles. This has allowed Wal-Mart to absorb an average of 20 percent of the competition wherever it opens a store. In small towns it can be as much as 50 percent. The middleman is eliminated because Walmart can sell to retailers below wholesale. Wal-Mart refers to this as "fostering a healthy competitive environment."Walton decided to cut his overhead by eliminating unions in his business so he wouldn't have to pay wage increases or negotiate for benefits. What Wal-Mart lacks in moral integrity and ethical values it makes up for in money. In July, Wal-Mart showed $166 billion in sales this year. Currently, there is a lawsuit pending against Wal-Mart for discrimination against women.Our City Council must decide the value of having a Wal-Mart distribution center in Merced. Merced could lose higher-paying jobs than Wal-Mart can create with lower-paying jobs. We might lose more than we can regain -- our integrity. Letter: Wal-Mart will bring much-needed jobs...LEE PIERCE, Merced...9-20-08http://www.mercedsunstar.com/180/story/462446.htmlEditor: The Wal-Mart distribution center proposed for Merced will bring some badly needed jobs to this area where unemployment is historically high.And such expansion is merely a part of growth, and cities like ours either grows or stagnates.If the distribution center is not built here I believe it will be in either the county to our north or to our south, and we will still get the increased traffic, which appears to be the reason many people oppose the project.CommentsUntil we can get an education system in Merced that educates our kids so that they can get high skilled jobs, this is the best we can hope for. We need jobs desperately here in Merced. Walmart will bring good jobs for those with limited skills. We need Walmart now! We can hope for higher paid, higher skilled industries to come here, but the quality of the work force in Merced just doesn't doesn't make sense for those companies. Let's get Walmart here and then work to improve our schools and grow UC Merced so that we can do even better next time. :: 09/21/08 10:47pm - dave95348--------Madmilker you have some good points. Don't forget which politicians put Walmart in the position it is in now and remember who gets money from Walmart during an election; more money than any other company. 2 of the 10 richest men in the US are Walmart heirs.:: 09/20/08 11:39am – Joan--------Let me be the first to say...Tennessee Gov. Phil Bredesen is a very smart person. Why would anyone want to give the "blueprints" of the 50 State Capitol Buildings to a 5 & 10 cent store from the Ozarks! Oh! lets not forget that the Walton estate owns millions of shares in company's like First Solar. People in America need to realize jus what got America in this shape..."cheap" yes so-call cheap items from a foreign land and now the largest company in America wants to make everything "green" but at the same time they put 95% made in China in their stores in China and support Chinese export...don't take my word...its on their China web page quote*Wal-Mart firmly believes in local procurement. We recognize that by purchasing quality products, we can generate more job opportunities, support local manufacturing and boost economic development. Over 95% of the merchandise in our stores in China is sourced locally. We have established partnerships with nearly 20,000 suppliers in China. *end quote! Now! if there be 182 country's making items for the world to buy and they have only 5% of the pie in China...duh! This company makes the nice people of China support their currency(yuan) by keeping it in their country working for the people there.... but with the "yuan" going up in value and the US dollar going down...all the foreign items that the American consumer buys thinking it is cheap has went up in price. People...its all about the currency and to keep a currency strong you got to keep it floating around the country you live in so it can work for you. For the past 12 years all them US dollars are being shipped overseas to a foreign bank and with the American worker not making anything for the foreigner to buy the "we the people" have to turn to the "second" largest employer in America(Uncle Sam) to sell "we the people" debt in order to get all them dollars back! 50 years ago a foreigner would had given their left nut for a US dollar or a Hershey's chocolate bar and today the same foreigner has got Uncle Sam and the American consumer by both all the while Hershey is moving the chocolate factory to Mexico. Wakeup! America and think "MADE IN AMERICA" and put the word Washington back in D. C.....Washington had been reelected unanimously in 1792. His decision not to seek a third term established a tradition that is now embedded in the 22d Amendment of the Constitution. Read his Farewell Address of Sept. 17, 1796 and think American made for a change. :: 09/20/08 6:33am - madmilkerModesto BeeSan Gabriel Valley water supply low...last updated: September 21, 2008 12:15:03 PMhttp://www.modbee.com/state_wire/story/437375.htmlAZUSA, Calif. — Water officials say an underground aquifer that stores much of the San Gabriel Valley's water supply could dip to a historic low.Water level at the Main San Gabriel Basin was recorded at 203.5 feet above sea level as of earlier this month. Officials say it is reaching its lowest level in 75 years.Factors including low rainfall, a drop in imported water and increased demand were blamed for the decrease.Officials at the Main San Gabriel Basin Watermaster, which is in charge of maintaining basin level, say water costs could go up if levels continue to decline.Information from: Star-News, http://www.newschoice.com/newspapers/losangeles/pasadena/default.aspWhittier Daily NewsSupply from local water basin nears all-time low...Jennifer McLainhttp://www.whittierdailynews.com/news/ci_10520535AZUSA - An underground aquifer that stores much of the region's water supply could reach an all-time low by year's end, officials said. The Main San Gabriel Basin, which spans 167 square miles beneath the San Gabriel Valley, is approaching its lowest water level in 75 years... As of Sept. 12, the water level was recorded at 203.5 feet above sea level. One year ago, it was measured at 213.3 feet above sea level. The lowest water level recorded since 1933 was in 2004, when it was 195.5 feet above sea level. Depleted water levels attributed to low rainfall, a decline in imported water and an increase in demand could lead to higher rates and rationing, officials said. Pumping will continue even if water levels dip below the desired operating range of 200 to 250 feet, a number set by a judge when the court-ordered Watermaster was created in 1973...During times of low local supply, the basin typically has been replenished with imported water from Northern California and the Colorado River. But such an option isn't available this year. A smaller than expected snowpack combined with a court order to reduce pumping from the Sacramento San Joaquin Delta and a drought along the Colorado River is putting a strain on imported water supply...Officials predict if the water levels continue to drop, it will force more increases in cost. Wells will have to be drilled deeper, which means there will be higher electricity bills to pull the water from deeper wells, Zampiello said. The deteriorating water supply is forcing local water agencies to be vigilant in their pursuit of conservation efforts and alternative water supplies...As a result, the Upper District is considering building a water treatment plant that would turn sewer water into drinking water. Some predict rationing will become a necessity if current conditions continue. "The future doesn't look very good," said Grace Kast, executive director of the Water Quality Authority, which is cleaning contaminated groundwater in the San Gabriel Basin. California Progress ReportThe District That Went From Drought To Excess In Just One Summer – California Big Ag Has Water To Store After Earlier Calling For a State of Emergency?...Traci Sheehanhttp://www.californiaprogressreport.com/2008/09/the_district_th.htmlEarlier this month, Westlands Water District (WWD), the largest single recipient of water from the Central Valley Project south of the Delta, filed an application to store 50,000 acre feet of water from this year's water supply for the District to use infuture years. While water storage is not unusual, this particular action is perplexing given that the same water district reported severe water shortages, resulting in lost crops and lost jobs earlier this year. In fact, the district's shortages were the primary motivation for the Governor's declaration of a state of emergency for several California counties. In response to the emergency declaration, water quality standards were relaxed for the Bay Delta as well as the California Aqueduct. In both cases, water quality for the environment and urban users was degraded in an effort to help the district get through the growing season. This month, however, the water district is singing a different tune. According to the water storage announcement, the district is seeking to store "supplies that are excess to its immediate demand." Hopefully, this new found excess also signals the end of farmworker layoffs and restoration of water quality standards for the Bay Delta Estuary and the California Aqueduct. Traci Sheehan is the Executive Director of the Planning and Conservation League, a statewide, nonprofit lobbying organization. For more than thirty years, PCL has fought to develop a body of environmental laws in California that is the best in the United States. PCL staff review virtually every environmental bill that comes before the California Legislature each year. It has testified in support or opposition of thousands of bills to strengthen California's environmental laws and fight off rollbacks of environmental protections.Sierra SunWaiting for winterLake levels dropping fast this fall...Greyson Howardhttp://www.sierrasun.com/article/20080919/NEWS/809199961/1066&ParentProfile=1051&title=Waiting%20for%20winterHeading into fall Lake Tahoe and other area lakes and reservoirs are dipping, and may leave the Truckee River a comparative trickle before snow recharges the water supply again.Two slow winters in a row — feeding 31 percent and 32 percent of normal runoff into Tahoe — mean the lake could drop below its natural rim unless precipitation shows up this fall. This means the top of the Truckee River could go dry, and other water stores will have to be leaned on more heavily to supply the Reno/Sparks area.“At this point it looks like we will get very close to Tahoe’s natural rim,” said Chad Blanchard, chief hydrologist for the U.S. District Court Water Masters Office. Currently the lake is within 11 inches of the natural rim, down to just 15 percent of the dam’s total storage capacity, he said.“As the lake drops the amount going over the dam drops and the amount going down river drops, so we have to supplement that with others. We’re using Boca right now,” Blanchard said. “By the end of the year Boca could be very low also.”Bill Hauck, the water supply coordinator for the Truckee Meadows Water Authority, said Boca could empty to 5 percent of its top capacity.Prosser Lake will dip down to about one-third its total capacity, and Stampede will be about half its normal volume, Blanchard said.Donner Lake is being drawn down as usual this fall, emptying the top 9 feet of the lake into Donner Creek, Hauck said...Stockton RecordWeather forecasters predict S.J.'s dry spell will likely last all winter...Alex Breitlerhttp://www.recordnet.com/apps/pbcs.dll/article?AID=/20080922/A_NEWS/809220317/-1/A_NEWSFor once, officials wish their crystal ball was cloudy.Early forecasts suggest we're in for another dry winter - or, at best, average - and California won't get enough rain or snow to pull itself out of a damaging drought.Stockton has seen less than one-tenth of an inch of rain since the end of February. Such an extended dry spell has not occurred here since at least 1850.Now, as summer finally wanes, farmers and water suppliers are nervously watching long-range forecasts, from the U.S. Climate Prediction Center to the Old Farmer's Almanac. And for the most part, the predictions they find are discouraging.The almanac, one of the more reliable sources according to the Stockton East Water District, expects a stormy November and then a relatively calm and dry winter for much of California, with each month's precipitation below normal.And the private Washington-based Global Climate Center, yet another resource for growers, tentatively calls for a "much drier than average year" in California, the third such year in a row...New Hogan Reservoir, from which Stockton draws much of its surface water, is at "pretty critical" levels for next year, Lytle recently told members of the county's Advisory Water Commission.The reservoir was 29 percent full and 70 percent average Friday. There's been enough water to get Stockton through the year without rationing, but officials have indicated that might not be the case next year.For farmers, the less surface water that is available, the more they must rely on groundwater, which is dropping to levels not seen since the drought of the early 1990s. This means water quality is worse, and it's costlier to pump the water to the surface.The long-term climate picture also is dubious. The Pacific Decadal Oscillation, a 20- to 30-year fluctuation of flow and currents, might have shifted to what's known as a "cool" phase - lower-than-normal temperatures at the surface of the ocean in the east Pacific, and warmer temperatures in the north, west and south.This in turn pushes the jet stream farther north over the western United States, potentially leaving parts of California dry, according to the NASA Jet Propulsion Laboratory at the California Institute of Technology.This could change our climate for decades to come. In general, we could see 20 to 30 years with lower rainfall than the region has seen since the 1970s, the institute reports...County leaders taking proactive approach on droughtS.J.: Coordinating policy with cities may conserve water...Zachary K. Johnsonhttp://www.recordnet.com/apps/pbcs.dll/article?AID=/20080922/A_NEWS/809220315/-1/A_NEWSSTOCKTON - The drought of 2008 and the possibility of a dry winter ahead had county officials last week looking at ways to lessen the impact of drought in San Joaquin County.The county Board of Supervisors on Tuesday said it wants to keep tabs on the current water shortage and examine how county government can coordinate with cities and the state to craft a regional approach to water use."I'd like to see some kind of unified water policy with the cities and the county," said Supervisor Larry Ruhstaller. Having fair and uniform policies could promote conservation among water users, he said. "If everybody is the same, I think people are much more willing to go along and change their lifestyle."Coordination could amplify the message of conservation already being delivered, as in outreach programs from the state and Stockton, said Supervisor Victor Mow.Stockton water providers coordinate on public outreach efforts, including giving presentations to tens of thousands of schoolchildren, said Bob Granberg, deputy director of the city's Municipal Utilities Department.Also, Stockton this summer declared its usual Stage 1 water conservation strategy, which calls for residents to avoid watering lawns during daytime hours, and requires restaurants to ask first before serving water, among other tactics.These strategies are largely voluntary, relying on the water users to police themselves, Granberg said...Separate from conservation is the issue of water supply.For future water needs and to replenish depleted groundwater supplies, the county is seeking additional sources of water.And with existing water supplies, agencies can be encouraged to use local supplies of water locally, like an agreement to transfer excess water from the Woodbridge Irrigation District to the city of Stockton, said Mel Lytle, county water manager...Alliance campaign hit a nerve...Michael Fitzgeraldhttp://www.recordnet.com/apps/pbcs.dll/article?AID=/20080922/A_NEWS0803/809220316/-1/A_NEWSI took strong exception to a campaign by the Spanos Cos. and others to undo a General Plan settlement reached by our elected representatives to build a smarter, greener city.» Keith Severin: "You are so right about sprawl."» Doug Durham: "It is about time the influential voices of Stockton ... take on these ... developers and their self-serving posturing as regards 'what is best for the people' and 'making sure the public has a voice.' ... Give me a break."» John Beckman, head of the Building and Industry Association of the Delta: "In a true public process, the legitimate questions posed by the public would have been answered prior to the adoption of the agreement. ... Many of the questions I raised ... were ignored. ..."The city attorney argues the contract does not alter the General Plan. ... Yet the other two parties who signed the contract tell a different story."(The Sierra Club's) Eric Parfrey said, 'They're (builders are) being asked to sign a pretty big blank check. Most of us don't really know exactly what this new Climate Action Plan ... looks like."And the other signer of the contract, Jerry Brown, issued a press release touting the things that the city is required to do before approving new development."If you are signing a 'blank check' and you don't know what the outcome of the process will look like, how can you say you've protected the General Plan?"» Tim Nunes: "Another gated community with water features supported by more examples of retail 'Generica' does nothing to help preserve and strengthen (Stockton's ) true character. ... Any number of mature neighborhoods ... stand for far more than legions of new, two-story, pot-growing tract homes in Spanos Park ever will."» Ron Stein: "I don't see where you have to run and build more affordable housing. ... What we need to do is get jobs here. ... Housing does nothing for us."» Kevin Huber, CEO of The Grupe Co.: "As you may know, The Grupe Co. and other builders and developers are not supportive of the referendum that is in process to overturn the settlement agreement ... That said, ... some of (your) logic escapes me."You imply that the settlement is somehow justified because it was decided upon by the 'people's elected representatives.' These are the same elected representatives that voted on the General Plan after five years and 85 public hearings. ... How do you distinguish these two action items of the council in terms of their representation of their constituency?"You state that the group filing the referendum 'seeks to subvert the City Council's decision.' Whether I support the referendum or not, the petitioners have the legal right to this referendum process, no different than the Sierra Club had the legal right to sue. ..."You seem to be implying that the legal rights extended to some groups are justified but the legal rights to others are not, or did I miss something?"Some correspondents allege the Alliance for Responsible Planning's signature gatherers are misrepresenting themselves. Come on, alliance, play hard, but play fair.» Kim Merenda: "In my experience, those circulating the petitions are getting signatures by deceiving the public. Each time I was approached to sign, they initially failed to disclose anything close to the honest truth when asking for my signature, saying things like, 'Would you sign to support a referendum to keep jobs in Stockton?' or some such thing."When pressed, they will mention the Sierra Club or the attorney general and a 'back-room deal.' However, they never spell out the specifics about how much growth the General Plan originally called for and specifically how this settlement would affect that."The Spanos Cos. stayed mum except to send a list that shows membership in the alliance is growing. More from them would enrich the debate.Absent that, though, I'll end with a comment on the General Plan settlement from a city official who asked not to be named.» "I can't tell you how huge a moment that was in the history of Stockton. Someday, we'll look back and that vote last week will mark the date that Stockton took back its community from the BIA."Union DemocratFederal act turns 40, will more rivers be affected?...JAMES DAMSCHRODER...9-19-08http://www.uniondemocrat.com/news/story.cfm?story_no=27618The National Wild and Scenic Rivers Act has allowed George Wendt to run a thriving whitewater-rafting business in Angels Camp. A decade after Wendt started OARS in 1972, New Melones Reservoir halted the Stanislaus River's free-flowing nature and OARS of its signature Central California river run. Wendt turned to the Tuolumne River to fill the void. "The Stanislaus was many outfitters' bread and butter," Wendt said. "When we lost that to New Melones, a lot of outfitters had to think of what they could attach their hopes to in the area." "The Tuolumne River had some tremendous potential," he added. That potential was being threatened by three proposed dams at the time. But after losing the free-flowing Stanislaus, Wendt and others fought to stop the Tuolumne from suffering the same fate. In 1984, they won the fight— the Tuolumne River was designated a National Wild and Scenic River. The National Wild and Scenic Rivers Act is celebrating its 40th anniversary this year. It was signed into law by President Lyndon Johnson in 1968. More than a dozen area river forks have been studied and determined to have values worthy of the act's protection, but only the free-flowing Clavey River is being pursued. Voices pushing to protect the rushing waters of eligible rivers, like the Clark Fork of the Stanislaus River and the North Fork of the Mokelumne River, are silent. The act does protect 11,000 miles of 165 rivers in 38 states from being dammed. A bill introduced by Rep. Buck McKeon, R-Santa Clarita, and Sens. Barbara Boxer and Dianne Feinstein, proposes to protect an additional 74 miles of rivers and streams in the eastern Sierra, White Mountains, Mojave Desert and San Gabriel Mountains. Besides restricting dams, the act protects water and public land a quarter-mile on both sides of the river. The Tuolumne River is protected from its headwaters on Mount Dana and Mount Lyell in Yosemite National Park for 83 miles until its waters run into Don Pedro Reservoir. In 1987, the Merced River was protected for 79 miles, stretching from Mount Lyell to the river's confluence with Bear Creek. The South Fork of the Merced River was protected from its source at Triple Divide Peak in Yosemite to its confluence with the main stem, 43-miles downstream. In 1990, the river was further protected from Bear Creek eight miles downstream to Lake McClure. "To have the Tuolumne and Merced protected gives the river systems in the area tremendous credibility," Wendt said, adding that people come from across the United States to run the rivers... A clause in the river's protection says that the designation cannot affect San Francisco Public Utilities Commissions' ability to divert water as needed. This clause has become increasingly important as the SFPUC proposed taking up to an additional 25 million gallons of water a day from the river. "It's an argument we're making," said Galen Weston, Sierra Nevada program associate for the Tuolumne River Trust. "But it's pretty clear in the clause that San Francisco is exempted from the act." All rivers under the act are managed under three distinctions — wild, scenic or recreational — said Steve Evans, conservation director for Friends of the River. "It's determined by the level of existing development at the time of the distinction," Evans said... Sections determined to be scenic may have an occasional road crossing and riverside structures. Activities associated with public lands are permitted, as long as the river's values are not compromised. Recreational segments are developed with roads, bridges and structures. Activities normally associated with public lands are permitted if, again, the river's values aren't compromised. A river's values can include fish, wildlife, historical, scenic, recreational, geological, botanical or ecological values, Evans said. Most of the Tuolumne and Merced sections under the act have wild or scenic designations. The act has become increasingly significant as California's water supply has shrunk after two shallow snow-pack seasons in the Sierra Nevada. Last year, Gov. Arnold Schwarzenegger proposed building three dams in California. "Without these type of protections, there could be impediments to stop the free-flowing nature of the rivers," said Jerry Snyder, spokesman for the Stanislaus Forest Service... San Francisco ChronicleEPA decides not to limit chemical in tap water...Juliet Eilperin, Washington Posthttp://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/09/22/MNO8132AR6.DTLThe Environmental Protection Agency, under pressure from the White House and the Pentagon, is poised to rule as early as Monday that it will not set a drinking water safety standard for perchlorate, a component of rocket fuel that has been linked to thyroid problems in pregnant women, newborns and young children across the nation.According to a near-final document obtained by the Washington Post, the EPA's "preliminary regulatory determination" - which was extensively edited by White House officials - marks the final step in a six-year battle between career EPA scientists who advocate regulating the chemical and White House and Pentagon officials who oppose it. The document estimates that up to 16.6 million Americans are exposed to perchlorate at a level many scientists consider unsafe; independent researchers, using federal and state data, put the number at between 20 million and 40 million.Some perchlorate occurs naturally, but most perchlorate contamination in U.S. drinking water stems from improper disposal by rocket test sites, military bases and chemical plants. A nationwide cleanup could cost hundreds of millions, if not billions, of dollars, and several defense contractors have threatened to sue the Defense Department to help pay for it if one is required.The new EPA proposal - which assumes the maximum allowable perchlorate contamination level is 15 times above what the EPA suggested in 2002 - was heavily edited by officials of the White House Office of Management and Budget, who eliminated key scientific passages and asked the EPA to use a new computer modeling approach to calculate the chemical's risks... In the EPA's proposed rule, the administration assumes that perchlorate contamination of 15 parts per billion is safe. But its regulatory document states that between 16,000 and 28,000 pregnant women and between 900,000 and 2 million Americans overall could be exposed to higher levels.Inside Bay AreaFinally fixed loophole...Editorialhttp://www.insidebayarea.com/search/ci_10524507It took them long enough, but the University of California regents finally cracked down on the rehiring of retired UC employees. The practice was made famous when the Times reported in April that UC Berkeley Police Chief Victoria Harrison had retired as the police chief, took a $2.1 million lump-sum payout of her retirement benefits and was rehired immediately into the same position.Under the policy approved unanimously by the regents last Thursday, such sweetheart deals will no longer be allowed. The new rules restrict the circumstances under which a retiree may be rehired by the university. We think that is a good thing. The new policy now requires that the university conduct a search for a replacement before rehiring the retiree. It also requires university administrators to document the "exigent circumstances" that require the rehiring of the individual. And it limits retirees to 43 percent time.All of these changes seem like very good ideas to us and we greet them enthusiastically.But we also must temper that enthusiasm with a note of caution because these new "policies" replace a series of "guidelines" that were in place but largely ignored by administrators at the university. That signals to us that the regents had better insist that their new policy is not ignored in the same way as were the old guidelines. None of this is to imply that Harrision did anything illegal or even shady. As near as we can tell, she was simply smart enough to figure out a nice loophole in the system and used it to her advantage. It is simply a loophole that should not have ever been there and we are very glad that the regents decided to close it and that they did so unanimously. Los Angeles TimesBailout may give housing market some breathing roomThe rescue plan for the banking system doesn't directly address the slide in property values, but it could set the stage for recovery...Michael A. Hiltzikhttp://www.latimes.com/business/la-fi-solve22-2008sep22,0,6243280,print.storyThe government's $700-billion plan to bail out the banking system may calm panicked financial markets, but its real value may be in buying time to address the root problem: the continuing slide in housing values.The Treasury Department's rescue plan is far from a done deal, with Democrats saying Sunday that they would push for more relief measures aimed at homeowners facing foreclosure and for stricter oversight of the program that would allow the government to buy up billions of dollars of securities tied to troubled mortgages.But there was broad agreement that the government must move quickly, decisively and comprehensively to get the global financial system moving again."What's been lacking is strategic oversight, as opposed to swatting one fly and finding 10 others," said William R. Gruver, a professor of management at Bucknell University and a former partner at Goldman Sachs & Co., after the broad outlines of the plan were released late last week. "We have to get to the underlying housing issue: If people were still making their mortgage payments, we wouldn't be here talking about these other problems."The rescue plan does nothing in itself to shore up the housing market. Rising defaults and foreclosures on home loans, spurred partially by declines in home values, are the cause of the collapse in price and tradeability of the mortgage-backed securities on the books of banks and investors.But without government action to aid battered banks, financial experts say, mortgages would remain difficult to get and the housing market's recovery would be further delayed..."The nub of the problem is mortgage-backed securities that people have a hard time valuing, and [the rescue plan] doesn't address that," said James R. Lothian, a professor of finance at Fordham University and a former executive at Citicorp. "But the basic thing that needs to be done is to provide liquidity to the banking system and markets so we don't have bank runs going on."...The housing market's path to recovery remains the chief imponderable in the financial crisis. Economists generally agree that a housing recovery is essential to an overall financial recovery, although there is a difference of opinion over how aggressively the government should intervene to prop up home prices.The rescue plan "is not going to keep a bubble inflated," said economist Dean Baker, co-director of the Center for Economic and Policy Research in Washington, "There's nothing you can do to prevent the future meltdown of the housing bubble and nothing you can or should do to keep home prices from falling further."The debate over whether and how to intervene in the housing market is likely to prove highly contentious in Washington. Many taxpayers will perceive Paulson's plan as a bailout of wealthy executives, including some whose lax investment policies contributed to the crisis. Yet a homeowner bailout may be a political minefield itself, as many homeowners current on their mortgages view such assistance as a payoff to irresponsible borrowers...Despite the plan's huge costs, there appeared to be widespread agreement that a government initiative on a large scale was needed."Main Street is as much at risk as Wall Street," said Ludwig, the former federal regulator. "If we failed to act, the resulting loss of jobs, malaise in growth, damage to the engines of our economy and harm to the American taxpayer would be far more costly."Battle over San Onofre tollway recommencesEven before public comment on the controversial highway can begin, supporters and opponents get into a chanting match...Susannah Rosenblatt and Mike Antonhttp://www.latimes.com/news/science/environment/la-me-tollroad23-2008sep23,0,1457023,print.storyDEL MAR -- Testimony got underway this morning at a public hearing on whether to build a 16-mile toll road through a state park in north San Diego County...Advocates say the six-lane toll road, which would connect Rancho Santa Margarita in south Orange County with Interstate 5 in San Diego County and slice lengthwise through San Onofre State Beach, is critical to untangling freeway congestion across the region. Opponents contend it will be ruinous to one of the state's most popular coastal parks and famed surf spots.The latest round in the byzantine battle is a much-anticipated 10-hour appeal hearing before an attorney with the U.S. Department of Commerce. The Commerce secretary can override the February decision by the Coastal Commission to reject plans for the tollway.Although the setting is familiar and the players much the same, today's reunion won't end with a dramatic decision -- Secretary Carlos M. Gutierrez has until January to announce his determination...What originated as a routine transportation scheme more than 20 years ago has mushroomed into an emotional debate about the demands of growth versus the importance of protecting parks...The issue has unleashed reams of competing legal opinions, government letters, scientific studies, opinion polls, advertisements and propaganda from both sides...Counters state Sen. Christine Kehoe (D-San Diego): "I don't think it's reasonable to think that California can build its way out of traffic congestion. We need to look at these problems in a new way. Once these roads are built, there's really no going back."In addition to denouncing the project as destroying a popular state park, opponents say it would imperil endangered species and ruin land considered sacred by local Native American tribes...One of the most publicized points of debate is whether sediment created by the road extension would harm the waves at the world-famous Trestles surf break, fed by San Mateo Creek. Scientific analyses commissioned by both sides disagree, but "Save Trestles" has become a rallying cry, galvanizing the surfing community against the tollway....Gutierrez, the Commerce secretary, is to then consider that oral testimony, written comments and documents submitted by both sides in his decision. The public comment period remains open until Oct. 2.Tuition and illegal immigrantsA court ruling that illegal immigrants can't get in-state tuition rates will harm many students...Editorialhttp://www.latimes.com/news/opinion/la-ed-tuition22-2008sep22,0,663667,print.storyFor the last seven years, illegal immigrants attending California's public university and community college systems have been eligible for in-state tuition rates. The thinking behind this practice was that, regardless of their parents' actions, children had no choice in crossing the border illegally; academically gifted immigrant students shouldn't be condemned to a permanent underclass.Last week, however, a state appellate court ruled that California was violating Congress' intention of barring illegal immigrants from a benefit reserved for legal residents. The decision sends a class-action lawsuit -- brought by out-of-state students who contend that they have been required to pay higher, nonresident fees while illegal immigrants pay in-state tuition -- back to Yolo County Superior Court. It also presages the end of higher-education opportunities for thousands of motivated students. Congress' intent does seem clear. The Illegal Immigration Reform and Immigrant Responsibility Act of 1996 reads, "An alien who is not lawfully present in the United States shall not be eligible on the basis of residence within a state (or a political subdivision) for any postsecondary education benefit unless a citizen or national of the United States is eligible for such a benefit." California sought to skirt this law by granting in-state tuition to all students who graduated from and attended a California high school for at least three years.Foes of illegal immigration, who argue that generous benefits encourage lawbreakers to come to California, will rejoice at the decision. And we acknowledge the inherent contradiction of providing a public benefit to students whose parents presumably don't pay any income tax to help pay for it. Nonetheless, we believe that California's law is in the state's best interest. By law, states must provide K-12 education to illegal immigrants, and it's counterproductive to then erect roadblocks to further advancement for our best and brightest. Studies show that investing in education for immigrants pays off. Assuming they remain in California, their economic contributions more than make up for the cost of subsidized college tuition within a few years. Forcing them to wallow in permanent poverty, by contrast, is a drain on taxpayers -- as well as being flat-out immoral.California is one of nine states providing in-state tuition to illegal immigrants, and given the absence of leadership from Washington, we don't fault any of them for attempting to address the educational, economic and social needs of the populations within their borders. The real problem is not the states' violation of congressional intent, but Congress' failure to follow the trail blazed by the states.San Diego Union-TribuneUC president leans toward new rules for admission...James P. Sweeney  http://www.signonsandiego.com/news/education/20080922-9999-1n22uc.htmlIRVINE – Even Mark Yudof, the former law school dean and accomplished higher education leader now guiding the University of California, confessed that he was a bit befuddled at first by a proposal to rewrite the UC's freshmen admissions rules. But Yudof told the UC Board of Regents last week that, after spending many hours studying the plan, he believes it is “headed in the right direction” and he is prepared to endorse it. The proposal to recast the admission guarantee the UC has for decades extended to the top 12.5 percent of high school seniors was developed by a faculty committee and has the support of the UC student association... “I was very reserved about this proposal because, frankly, it took me a very long time to understand it,” Yudof told regents during a pair of informational sessions last week at UC Irvine. Yudof said he is still concerned about the new guidelines' impact on student diversity and their potential to overwhelm campuses with thousands of additional applications. The rules that determine who gets into the nation's premier public university system are a politically sensitive set of criteria closely followed by thousands of students, parents, high school counselors and others... The new approach developed and refined over the past four years by UC faculty would limit the guarantee to less than 10 percent of graduating seniors statewide, although it would expand the local threshold to the top 9 percent of each class. Other students with a minimum grade-point average, tentatively 2.8 unweighted for honors classes, would for the first time be assured that their applications would receive a comprehensive review by their preferred campuses...The UC guarantee has become something of an illusion for students near the bottom of the eligible pool, Yudof said. Those not accepted at any of their chosen campuses are offered slots at either UC Merced or UC Riverside, and all but a small percentage decline...Before the proposal returns to regents, its projections will be recalculated with a new set of high school graduate data from the California Postsecondary Education Commission. HIGHLIGHTS Proposed changes in University of California freshman admissions standards: About 9.7 percent of California high school graduating seniors would be guaranteed admission, rather than the current 12.5 percent. Applications from students falling just short of the new standards would be given an automatic review for admission. Together with the guaranteed admissions, the total pool under consideration would encompass more than 20 percent of the state's graduating seniors. The policy also would promise a spot at one of the UC campuses for all students who graduate in the top 9 percent of their senior class, compared with the 4 percent now promised admission.UC head delivers accountability report as vowed209-page posting unveiled today...James P. Sweeney http://www.signonsandiego.com/news/education/20080922-9999-1n22account.htmlSACRAMENTO – For teenagers pondering college, parents who will foot the bill, professors, politicians and others with questions, the University of California released a blizzard of data today in a new accountability report posted online. Fulfilling a signature promise of new UC President Mark Yudof, the 209-page draft was compiled from largely existing information scattered throughout the 10-campus system.Collecting and organizing all the information in one location with comparisons to other universities has been a priority of Yudof's in the three months since he became the university's president. “An accountability framework is critical for transparency, it's critical for performance measurement . . . and it's important for the personal accountability of the leaders of the institution,” Yudof told UC regents last week. “It's going to take us time to get it exactly right, but we're working full speed ahead on this priority.” In an interview, Yudof said the report is perhaps 80 percent of what he hopes to cover. Ultimately, he would like it to include information such as “outcome data” – statistics on what happens to UC students after they graduate... Online: To read the UC report, go to universityofcalifornia.edu/ accountability Washington PostCalif. toll road hearing focuses on security...GILLIAN FLACCUS, The Associated Presshttp://www.washingtonpost.com/wp-dyn/content/article/2008/09/22/AR2008092201469_pf.htmlDEL MAR, Calif. -- More than 1,000 people turned out Monday at a public hearing over a proposed toll road that would pass through one of Southern California's most popular parks and nearby a world-class surf break.Until now, the fight over the road _ which would bisect San Onofre State Beach and end a half-mile from the surf break Trestles _ has focused on its environmental impact.The California Coastal Commission rejected the plan in February after environmentalists and other opponents argued that the 16-mile, six lane road would wipe out several endangered or threatened coastal species, decimate an ancient Indian burial ground and block sediment that creates world-class waves at the famed Trestles surf break.But the company that hopes to build and finance the proposed $850 million road, Transportation Corridor Agencies, appealed that decision to the National Oceanic & Atmospheric Administration, a branch of the U.S. Commerce Department.So many people signed up to speak at the NOAA's hearing Monday _ more than 650 _ that it scheduled the meeting at a fairgrounds to accommodate the crowd and hired security officers to help maintain order. At least 1,000 people packed into the space by the start of the hearing, many wearing T-shirts that read either "Save the Park, Stop the Toll Road" or "241: Less Traffic, More Jobs."Audience members _ who frequently interrupted the speakers with cheers or boos _ were urged to instead give a thumbs-up or thumbs-down sign to indicate their feelings."We're against taking away the shoreline for a road. I think the coast needs to be maintained. It's beautiful, it's rustic, the way California used to be," Carol Baker, 67, of La Jolla, said just before the hearing began. "They can cut across somewhere else if they need to get their road built."The company and other proponents, who include Gov. Arnold Schwarzenegger, say the toll road extension shores up national security as an alternate route in case Interstate 5 traffic is jammed in the event of wildfire or an accident at the nearby San Onofre nuclear power plant."When those fires in San Diego happened and they had to evacuate all the people, they had one exit route and that was backed up for hours. People were trying to drive 60 miles and it took them five hours," said Lance MacLean, a company board member. "It's in the interest of national security that you have an alternate route."Environmentalists counter that the proposed road would be little more than another local commuter option for a yet-to-be-built 14,000-home development in south Orange County _ hardly a national security linchpin.Schwarzenegger's brother-in-law, Bobby Shriver, said local residents don't want the toll road. Schwarzenegger was accused earlier this year of dumping Shriver and actor-director Clint Eastwood from the California State Parks and Recreation Commission because they voted against the toll road. The governor's office has denied those accusations."There's a very serious traffic problem on the 5, there's no doubt about that," Shriver said, referring to the freeway. "But they do not want to solve that problem by building this road."But a local city councilwoman disagreed, saying that supporters of the road couldn't be there to speak because they had jobs and families."It is their hope that we will listen to the people in the neighborhood and the business owners _ the real people," said Linda Lindholm, a councilwoman for Laguna Niguel."They ask me, 'Why is it taking so long?'"The NOAA could make a decision on whether to override the state's veto as early as next month.In its history, the California Coastal Commission has rejected only 28 projects and 14 of those were appealed to the Commerce Department. The commission was overruled in five cases and upheld in two. The remaining cases were withdrawn, dismissed or settled.The toll road is the first California project to go before the Commerce Department since 1991.New York TimesEurope and Japan Balk at U.S. Request on Bank Aid ...CARTER DOUGHERTY and MATTHEW SALTMARSHhttp://www.nytimes.com/2008/09/23/business/worldbusiness/23euro.html?ref=business&pagewanted=printEurope and Japan turned a cold shoulder on Monday toward a American request that they bail out banks in the manner now being proposed in the United States.The German chancellor, Angela Merkel, also took the opportunity to criticize the United States and Britain for opposing German efforts to put greater regulation, or at least reviews, of the financial sector on the international agenda last year, when she was chairwoman of the Group of 7 industrialized nations.“Everyone who produces a real product knows what it looks like and what standards it is up to,” Ms. Merkel said. “One also needs to know with a financial product what’s involved. Otherwise, these sorts of things happen that we then all have to pay for.”After an overnight conference call of finance ministries and central banks, the G-7 industrialized nations welcomed Wednesday’s bailout program and pledged in a statement to “enhance international cooperation.”But the G-7 also indicated that countries were free to go their own way in grappling with what has become the worst financial crisis since the 1930s.“Each of us remains committed to taking further action, individually and collectively as needed, consistent with our respective domestic circumstances,” the G-7 statement said.That appeared to paper over the obvious cracks between the United States and countries in Europe and Asia, whose economies and banking systems are generally in far better shape than the United States. The Treasury secretary, Henry M. Paulson Jr., said Sunday that he would “aggressively” seek plans from other countries to buy up illiquid assets linked to America’s mortgage market.German officials explicitly ruled out any German version of Washington’s plan, which is expected to cost American taxpayers about $700 billion.British officials also made clear that they would not create a fund to buy bad assets, although Alistair Darling, the chancellor of the Exchequer, did promise new rules.“We are putting in place both here in the U.K. and internationally the tougher financial regulation no one can doubt we need,” Mr. Darling told the governing Labor Party’s annual conference in Manchester. “I will continue to do whatever it takes to maintain financial stability and I remain confident we will do so.”President Nicolas Sarkozy of France, who holds the rotating European Union presidency, is expected to elaborate on that message in a speech Thursday, French officials said. Mr. Sarkozy, who was in New York on Monday, has on many occasions complained about the structure of global economic regulation.Christian de Boissieu, chairman of the French prime minister’s council of economic analysis, said: “The U.S. must take charge of the budgetary costs of the crisis. I’m all for trans-Atlantic solidarity, but this doesn’t include financing the bailout.”The Japanese finance minister, Bunmei Ibuki, said after the announcement that he saw no need for Japan to set up an American-style rescue scheme to help its own banks offload bad assets, Reuters reported from Tokyo.The German finance minister, Peer Steinbrück, said, “None of the other six G-7 members will adopt a similar program to the U.S.”Apart from a manifest lack of sympathy for a crisis they view as created by American banks and regulators, European governments are also constrained by rules within the 27-nation European Union that limit budget deficits and public debt.“Europe won’t do anything because they haven’t got the room for maneuver,” said Jeremy Batstone-Carr, an equity strategist with Charles Stanley in London. “They ran themselves into a cul-de-sac.”Objectively, there is a certain truth in the European position.An August study by the Federal Reserve concluded that losses of foreigners holding mortgage-backed securities could eventually be as low as $75 billion, though paper losses would be higher before the market stabilizes. Also, the German government has already pumped billions of euros into several hard-hit banks.The Association of German Banks hinted that it would oppose the emerging bailout scheme if it gave American competitors a sudden advantage.“We need to assure that disadvantages for foreign institutions do not arise from the U.S. program,” said Manfred Weber, executive director of the association. “It was, after all, American products that created the crisis and that created the contagion effects.”CNN MoneyBank stocks sink on credit turmoilDespite more details about plan to bailout banks, most financials plunge; Goldman and Morgan up on Fed news and Mitsubishi UFJ investment in Morgan...Aaron Smithhttp://money.cnn.com/2008/09/22/news/companies/bank_stocks/index.htm?postversion=2008092214NEW YORK (CNNMoney.com) -- Bank stocks took a dive Monday as investors continued to worry about the turmoil in the credit markets even as Congress works on passing a $700 billion bailout of the banking industry.The S&P Banking Index plunged nearly 11% in midday trading, led by double-digit percentage declines in Washington Mutual (WM, Fortune 500), Wachovia (WB, Fortune 500) and Wells Fargo (WFC, Fortune 500). "Credit markets are totally disrupted right now," said Brad Hintz, banking analyst for Sanford C. Bernstein. "We haven't seen a disruption like this in my career, and I've been on Wall Street since 1985."The sell-off comes after an explosive rally in financial stocks Friday on the news of the bailout. The big gains led at least one analyst to downgrade several top banks, citing concerns about the dramatic run-up in stock prices.On Monday morning, R. Scott Siefers, managing director of Sandler O'Neill & Partners, downgraded Wells Fargo, JPMorgan Chase (JPM, Fortune 500) and Merrill Lynch (MER, Fortune 500), believing them to be overpriced after last week's rallies. Siefers said in a note that even though Wells Fargo is "one of the best companies around... the valuation reflects that and then some." Shares of Wells Fargo gained more than 16% last week.Matt McCormick, analyst for Bahl & Gaynor Investment Council added that the investor "euphoria" surrounding the bailout proposal on Friday faded by Monday because Congress was still haggling over the details of the plan."Like most things, the devil's in the details," said McCormick. "[Investors] thought there was going to be some type of resolution over the weekend and it didn't happen. No one knows when this plan is going to be implemented. There are a lot of unknowns."Reprieve for the investment banksBut shares of Goldman Sachs (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500), the last two stand-alone investment banks, fared a little better than the stocks of commercial banks Monday after the Federal Reserve announced late Sunday that it agreed to convert the two firms into bank holding companies in a bid to calm nervous investors. The move will allow the banks to borrow from the Federal Reserve on a permanent basis but it also subjects them to tougher regulation.Goldman's stock briefly traded higher Monday morning but was down about 4% in midday trading. Shares of Morgan Stanley were up about 1% after earlier climbing as much as 10%. Morgan Stanley, however, was lifted by more than the Fed news.Japanese bank Mitsubishi UFJ agreed to buy up to a fifth of the company Monday morning. The companies didn't name a price for the deal. But at Morgan Stanley's current market value, a 20% stake of the company would be worth about $6 billion."The speculation about their near-death experience is going to go away pretty soon now," said Hintz, referring to Morgan's deal with MitsubishiCongress pushes back on bailoutDemocrats want U.S. ownership stake in firms it helps. Industry wants plan to cover other kinds of debt...Jeanne Sahadihttp://money.cnn.com/2008/09/22/news/economy/bailout_proposal_Monday/index.htm?postversion=2008092215NEW YORK (CNNMoney.com) -- The Bush administration's proposed $700 billion financial rescue took fuller shape on Monday as Senate Democrats circulated a counter proposal that would require the government to receive an ownership stake in the companies it helps.The proposal, offered up by Senate Banking Committee Chairman Christopher Dodd, D-Conn., would require companies who sell assets to Uncle Sam to give the government shares in the company, according to a draft obtained by CNN.The Senate Democrats' proposal would also require the government to come up with "a systematic approach for preventing foreclosures and ensuring long-term, sustainable homeownership through loan modifications and use of the HOPE for Homeowners Program" on the mortgages it buys in the bailout.The Dodd proposal calls for curbs on executive compensation and a change to federal law so that judges can modify a bankruptcy filer's primary residence mortgage. Under current law, judges may only modify loans on second homes. The lending industry has strongly opposed such a provision.Lastly, the Dodd proposal would terminate Treasury's special authority to buy up troubled assets by Dec. 31, 2009. By contrast, the Treasury's proposal calls for termination two years from the date of enactment.In a briefing with reporters on Monday, House Financial Services Committee Chairman Barney Frank, D-Mass., said he is finalizing a counter-proposal and that his plan is "very close" to Dodd's.Meanwhile, the Bush administration is pushing for a "clean" bill to be passed quickly and not be loaded up with provisions that would deter companies from participating. "[T]he whole world is watching to see if we can act quickly to shore up our markets and prevent damage to our capital markets, businesses, our housing sector, and retirement accounts," President Bush said.Congressional leaders, however, say they don't want to give the Treasury Secretary a "blank check" without provisions that protect taxpayers.At the same time, financial institutions are weighing in with what they want in the bill. On Sunday, the Financial Services Roundtable - a lobbying group representing the nation's banks - called on Congress to make the plan "broad enough to include different types of assets." The Treasury has amended its original request to give it authority to buy up not just troubled mortgage assets, but troubled assets period. "Removing troubled assets will begin to restore the strength of our financial system so it can again finance economic growth," according to a statement on the Treasury Web site.Historically significant timeThe proposals being debated are the centerpiece of what would be the most sweeping economic intervention by the government since the Great Depression.Paulson, Federal Reserve Chairman Ben Bernanke and other officials have said in recent days that the lack of easy credit between banks and other financial institutions threatens to inflict serious damage on the economy if not addressed immediately.The plan would allow the Treasury to buy up troubled assets from U.S.-based companies and foreign firms with big U.S. operations. The aim is for the government to buy the securities at a discount, hold onto them and then sell them for a profit.Experts liken the Treasury's plan to the Home Owners' Loan Corp., put in place in 1933 to stem foreclosures and help refinance defaulting mortgages and boost banks' liquidity.The mortgage plan is part of an extraordinary effort by the federal government to contain a financial crisis that has forced a major realignment on Wall Street and has started rippling out to Main Street.The Senate Banking Committee will hold a hearing on the bailout proposal on Tuesday, while the House Financial Services Committee will do the same on Wednesday. Paulson and Bernanke are scheduled to testify at both hearings.Financial TimesRecord-breaking leap in oil prices...Javier Blas in London http://www.ft.com/cms/s/0/a7ccae2c-888f-11dd-a179-0000779fd18c.htmlCrude oil prices on Monday spiked more than $25 a barrel – a record one-day dollar increase – in trading ahead of the expiry of the benchmark futures contract and amid concerns that the US dollar would weaken. The jump in oil prices to an intraday high of $130 a barrel was exacerbated by a squeeze on short positions ahead of the expiry at the close of the Nymex October futures. This forced some financial investors to cover their short positions positions to avoid taking delivery of physical barrels of oil. It also led an across-the-board rise in commodities prices, with gold prices soaring above $900 an ounce. The surge in commodities prices as a function of dollar weakness signals the US Federal Reserve faces a delicate balancing act as the government’s $700bn rescue of Wall Street banks could complicate its efforts to fight inflation, traders said. Nymex October West Texas Intermediate crude oil, which was due to expiry at the close on Monday, surged more than $25 to an intraday high of $130 a barrel, recovering almost $40 from last week’s low of $90.51. Towards the end of floor trading in New York, the October moved up $20.45 at $125 a barrel. November WTI, which will become the benchmark on Tuesday, rose $6.40 to $109.15. Traders said the surge in oil prices – and the huge difference between the October and November contracts – signalled the market was finally reacting to the damage inflicted by hurricanes Ike and Gustav in the Gulf of Mexico. Bullish sentiment was exacerbated by news that Mexico’s oil production dropped in August and also by signals that Saudi Arabia, the world’s largest oil producer, has started to reduce crude oil supplies.Following recent hurricanes, the US government said about 995,000 barrels a day of oil production remained shut down in the Gulf of Mexico region. The market found further support from news of an 11.5 per cent increase in Chinese oil imports in August compared with the same month last year. Refineries in China imported about 3.7m b/d in August, according to official data. With a weaker dollar and higher oil, investors piled back into the precious metals sector. In London, spot gold rose to an intraday high of $904.70 an ounce. It later traded at $89.20 an ounce, up $28.05 from Friday’s last quote in New York. Bullion holdings at SPDR Gold Trust, the world’s largest gold exchanged-traded fund, rose last Friday to 679.6 tonnes, the highest since late July and 17.6 per cent higher than a year ago. The surge in commodities prices as a reaction to dollar weakness signals that the US Federal Reserve will face a delicate balancing act as the government’s proposed $700bn rescue of Wall Street banks could complicate its efforts to fight inflation. The Reuters-Jefferies CRB index, a benchmark for commodities, on Monday rose 2.2 per cent, extending to 9 per cent its recovery from a 11-month low set last week. The US dollar on Monday hit a three-week low against the euro of $1.4691. Meanwhile, the chaos created in the commodities market by the AIG rescue and Lehman Brothers’ collapse was on Monday subsiding. ETF Securities, the London-based company, said more of its commodity products backed by AIG resumed electronic trading at the London Stock Exchange, following last week’s interruption amid counterparty fears. “AIG continues to honour all of its obligations under our agreements with them, including processing all creations and redemptions in the usual manner and paying all redemptions due on time,” ETF said.Bloomberg.comDollar Weakens Most Since Euro's 1999 Debut on Budget Deficit...Ye Xie and Bo Nielsenhttp://www.bloomberg.com/apps/news?pid=20601087&sid=a2CVNS_9HHzo&refer=homeSept. 22 (Bloomberg) -- The dollar weakened the most against the euro since the European currency's 1999 debut on concern a U.S. proposal to buy $700 billion of troubled assets from financial firms will inflate the budget deficit. The greenback dropped for a fourth day in its longest stretch of decline since June as Treasury Secretary Henry Paulson's plan to bail out banks from the credit crunch failed to restore investor confidence in U.S. assets. Stocks fell, and oil prices surged as traders scrambled to unwind positions on the October contract's last day of trading. ``The massive increase in the deficit is starting to make people rethink the shape of all sorts of things, including the dollar,'' said Alan Ruskin, head of international currency strategy for North America at RBS Greenwich Capital Markets Inc. in Greenwich, Connecticut. The dollar fell 2.3 percent to $1.4808 per euro at 4:18 p.m. in New York, from $1.4466 on Sept. 19. It touched $1.4866, the weakest level since Aug. 22. The dollar may slide to $1.50 in the next several weeks, according to Ruskin. The dollar dropped 2 percent to 105.32 yen, from 107.45. The euro increased 0.3 percent to 155.94 yen, from 155.46. The U.S. currency has lost more than 6 percent versus the euro since touching a one-year high of $1.3882 on Sept. 11. The dollar reached $1.6038 on July 15, the weakest level since the European currency's 1999 inception. The bailout plan, sent to Congress on Sept. 20, would mark unprecedented government participation in markets and increase the nation's debt ceiling by 6.6 percent to $11.315 trillion. Officials may also provide $400 billion of guarantees for money- market funds. Lost U.S. `Allure' The dollar will get ``crushed,'' as the extra spending reduces the allure of U.S. assets to foreign investors, said John Taylor, chairman of New York-based International Foreign Exchange Concepts Inc., the world's biggest currency hedge-fund firm, which manages about $15 billion. Paulson and Federal Reserve Chairman Ben S. Bernanke began plotting the rescue last week after New York-based Lehman Brothers Holdings Inc. filed for bankruptcy, the government seized control of American International Group Inc., and Merrill Lynch & Co. was forced into the arms of Bank of America Corp. Paulson and Bernanke are due to testify before the Senate tomorrow on the banking crisis. The yen rose 1.7 percent to 9.91 against the Mexican peso on reduced demand for carry trades, in which traders get funds in a country with low borrowing costs and invest where returns are higher. The Bank of Japan's target lending rate of 0.5 percent compares with 8.25 percent in Mexico. `Severe Slowdown' ``Even with a plan, the likelihood there will be a very severe slowdown in the U.S. and elsewhere has increased,'' said Simon Derrick, chief currency strategist in London at Bank of New York Mellon Corp. ``I don't think people will return to the same old risk-taking world.'' The Standard & Poor's 500 Index retreated 3.8 percent, led by regional banks that may get hurt by the bailout. Crude oil for October delivery rose 14.8 percent to $120 a barrel on the New York Mercantile Exchange. The more-active November contract increased $6.62. The rand weakened 0.9 percent to 7.9885 per dollar as South African President Thabo Mbeki's resignation increased bets foreign investors will sell the country's assets on extended global financial turmoil. The currency dropped 3.3 percent to 11.8307 against the euro. The chance of the Fed cutting its benchmark 2 percent rate by a quarter-percentage point at its Oct. 29 policy meeting was 42 percent, compared with zero a month ago, futures contracts on the Chicago Board of Trade showed. The European Central Bank's main refinancing rate is 4.25 percent. Economic Reports Home resales declined to 4.94 million last month from 5 million in July, according to the median forecast of 70 economists surveyed by Bloomberg News. The National Association of Realtors' report is scheduled for release Sept. 24. The Commerce Department is forecast to report the next day that sales of new houses dropped to 510,000 from 515,000 and that durable goods orders fell 1.8 percent. ``We look for the dollar to reflect the weakness in the U.S. economy,'' said David Powell, a currency strategist at Bank of America in London. ``The dollar is not yet receiving the yield support that would normally be acquired in order to support a sustained rally.'' The yield advantage of two-year German bund over the comparable-maturity U.S. notes widened to 1.91 percentage points, from 1.66 at the beginning of the month, making the U.S. assets less attractive. -------------------------------------------------------------CENTRAL VALLEY SAFE ENVIRONMENT NETWORKMISSION STATEMENTCentral Valley Safe Environment Network is a coalition of organizations and individuals throughout the San Joaquin Valley that is committed to the concept of "Eco-Justice" -- the ecological defense of the natural resources and the people. To that end it is committed to the stewardship, and protection of the resources of the greater San Joaquin Valley, including air and water quality, the preservation of agricultural land, and the protection of wildlife and its habitat. In serving as a community resource and being action-oriented, CVSEN desires to continue to assure there will be a safe food chain, efficient use of natural resources and a healthy environment. CVSEN is also committed to public education regarding these various issues and it is committed to ensuring governmental compliance with federal and state law. CVSEN is composed of farmers, ranchers, city dwellers, environmentalists, ethnic, political,and religious groups, and other stakeholders.