9-27-08
9-27-08Merced Sun-StarWhat about Merced?Federal foreclosure assistance doesn't include MercedMerced is one of the country's top areas for foreclosures...Michael Doylehttp://www.mercedsunstar.com/167/story/472644.htmlWASHINGTON — Merced, despite being one of the nation’s foreclosure capitals, won’t immediately be getting federal funds to help with the housing crisis.The Bush administration unveiled what cities and counties would be getting from a $3.9 billion program to buy foreclosed homes.Modesto, Fresno and other cities throughout the state will get multimillion-dollar awards. Merced, while still eligible, must apply through the state for the funds, which could take a matter of months.“This is another example of the unimaginable incompetence of the Bush administration,” Congressman Dennis Cardoza said. “They leave off the area most affected in the country.”He reminded the agency that Merced's troubles have been chronicled in The New York Times, L.A. Times and other major newspapers.HUD officials are supposed to call Cardoza over this weekend with a explanation for why the city was left off the list. The initial explanation was that it wasn't large enough and based on HUD formulas, would have only received about $2 million.The Democratic lawmaker said the U.S. Department of Housing and Urban Development made a terrible mistake and said there’s no reason that Merced County and its cities should be forced to wait for help.The Community Development Block Grants can be used to rehabilitate neighborhoods laid to waste by foreclosures..Forty-five California cities and communities were designated to receive grants. The state will receive $145 million that can be distributed among smaller communities that didn't secure their own grants.Merced, Madera and Turlock didn't make the cut for a direct federal grant but still could get money in the state distribution."Considering that Merced County has one of the highest foreclosure rates in the nation, it's both surprising and disappointing that it was left off ... (the) list of California communities eligible for the direct allocation of funds," said Mark Hendrickson, director of governmental affairs for Merced County...The money will be distributed once communities provide their plans, probably before Dec. 1. The communities will have 18 months to spend the federal grants.The money can be spent in several ways. Communities can buy land, demolish or fix up abandoned homes and assemble properties into "land banks" for better management. They can provide assistance with closing costs and down payments for low- and moderate-income home buyers.'Unacceptable,' senators writeEven so, California's two Democratic senators, Dianne Feinstein and Barbara Boxer, complained the Bush admini- stration had shortchanged the state.They noted that although California is receiving $529 million, that is only 13 percent of the national funding. California accounts for 25 percent of national foreclosures. Florida has fewer foreclosures but is getting more money...Bigger red-legged frog habitat poses problems for ranchers...creiter...Reporters' Notebookhttp://notebook.mercedsunstar.com/bigger_red_legged_frog_habitat_poses_problems_for_ranchersMerced County is one of 28 that has been affected by expanding the habitat for the red-legged frog.The frog is found along creeks and drainages the length of California. It has been an endangered species since 1996.And now the United States Fish and Wildlife Service wants to quadruple the land area in California designated as critical habitat for the frog. The proposed land covers more than 1.8 million acres, up from 450,000.Because of the loss of their habitat, the frogs like to hang out in artificially created stock-watering ponds.So now ranchers and wildlife lovers need to get together and decide how to keep that medium-sized frog from going the way of other endangered species.Saving the red-legged frog isn’t going to be easy. For the Fish and Wildlife folks, or for the ranchers.Or for the frogs.Central Valley Farmland Trust given accredited statusOrganization works to preserve agricultural land in Merced, Stanislaus, San Joaquin and Sacramento countieshttp://www.mercedsunstar.com/167/story/472637.htmlThe Central Valley Farmland Trust has been awarded accredited status by the Land Trust Accreditation Commission.The commission presented the award to a group of 38 land trusts throughout the United States. The Central Valley Farmland Trust is one of only three California land trusts that received the award, and is the only accredited land trust in the Central Valley.The trust was founded in 2004, and works in Sacramento, San Joaquin, Stanislaus and Merced counties. To date the land trust has worked with 19 conservation-minded landowners to protect nearly 11,000 acres of farm in the region.The Central Valley Farmland Trust is a private, nonprofit corporation whose mission is to work with landowners and conservation partners to preserve agricultural lands in the San Joaquin Valley. County Bank Stock Soars 262% in Last Minute Trading Friday...dave95348...The Sunspothttp://sunspot.mercedsunstar.com/?q=node/5067Capital Corp of the West (CCOW), parent company of County Bank, shot up on the stock market in late afternoon trading today. The stock ended up $7.86 per share, after starting the day at $3.00 per share. That is a 262% increase that occurred in the last two hours of trading.What caused this increase? A post on the Internet message boards indicates that there is a possible acquisition announcement coming on Monday. I can't find any confirmation of this rumor... Anyone have any ideasCapital Corp of the West...Stock Quote/Informationhttp://www.ccow.com/index.cfm?fuse=stock_quoteStock Symbol:CCOW Last Trade:$10.86Days Range: $3.13 - $12.13 Trade Time: Sep 26 2008 4:00PM52wk Range: $2.75 - $20.95 Change:$7.86Volume:413919 Prev Close: $3.00Market Cap: $117,461,760.00 Open:$3.25 Bid:$3.00 Ask:$6.99Modesto BeeWest Park slapped with 2nd lawsuitKamilos faces legal action in Stanislaus, Fresno courts...TIM MORANhttp://www.modbee.com/local/story/444228.htmlSomeone is wasting the taxpayers' money in the battle over PCCP West Park LLC, both sides agree. But they don't agree on who's the culprit.West Park developer Gerry Kamilos on Friday called an opponent's lawsuit filed this week "an old attorney's trick" to delay a court decision on the project.WS-PACE.org, a group formed to oppose the proposed 4,800-acre West Park business and industrial park southeast of Patterson, filed the lawsuit in Stanislaus County Superior Court. It names Stanislaus County, the Board of Supervisors, the county redevelopment agency, West Park and Union Pacific Railroad.Like a similar lawsuit filed by Patterson this summer, it contends the project should have been subject to a California Environmental Quality Act environmental review before the Stanislaus County Board of Supervisors approved a memorandum of understanding with Kamilos on April 22.That CEQA review is under way.Stanislaus County Counsel John Doering called the WS-PACE.org lawsuit "premature and unfounded," and questioned why WS-PACE.org didn't join in the Patterson lawsuit rather than file its own. The West Stanislaus Fire Protection District and the Del Puerto Health Care District have joined the Patterson case, Doering said.The county believes the memorandum to proceed with West Park did not require the CEQA review.A motion to dismiss the Patterson lawsuit has been filed and will be heard Nov. 6, Doering said...The Patterson lawsuit was transferred to Fresno County Superior Court at the request of Patterson officials who believe they could not get a fair hearing in Stanislaus County, Doering said.The filing of a second, similar lawsuit in another jurisdiction is a classic delaying tactic, Kamilos said."It just wastes a lot of taxpayer money and time in court," he said. Kamilos said Patterson has spent $200,000 on its lawsuit. Stanislaus County is a defendant in both lawsuits, costing more taxpayer money.WS-PACE.org president Ron Swift said the WS-PACE.org lawsuit differs in some details from Patterson's lawsuit and that the city and WS-PACE.org attorneys were not working together. "I can assure you it's not a trick," he said, adding that the money for the WS-PACE.org lawsuit comes from private donations from members.It's West Park that may be wasting the taxpayer's money, Swift said. He questioned the financial viability of West Park, noting that Kamilos had listed the now bankrupt Lehman Bros. investment firm as a major investor.The West Park proposal includes a rail link between the Port of Oakland and the Crows Landing development site, which would be partially funded with $26 million in state transportation bonds."If (the California Transportation Commission) grants him that money, and he were to put a lot of it into rail improvements and the project didn't go, it would be a waste of taxpayer money," Swift said.Kamilos said West Park's financial partner is Pacific Coast Capital Partners, or PCCP. "They have a multitude of funding sources they work with, including their own funds," Kamilos said. "The project is moving forward. We are doing everything we are required to do."WS-PACE.org will have representatives at the Transportation Commission meeting in Riverside on Oct. 22 and will testify against West Park rail funding if they are given the opportunity, Swift said.Kamilos said the down economy is the best time to prepare for the next up cycle. "This is the time to make those investments and take the risk and put in the capital, to be prepared when the market starts improving," he said.West Park is on track to start construction in the spring of 2010, Kamilos said.Fresno BeeCelebrate progress cleaning air with modicum of restraintHow you measure our success depends on factors you look at...Editorialhttp://www.fresnobee.com/opinion/story/897609.htmlThe Valley has met a federal standard for dust and soot, and is now officially regarded as healthy in that respect -- depending on who you listen to.The U.S. Environmental Protection Agency made the announcement this week, and there was considerable fanfare. It's the first time the Valley has met a federal air standard since the 1990s. Not so fast, say environmentalists. The EPA was able to make the ruling only because it waived several readings of so-called PM-10 pollution that exceeded the standards. Turns out it was windy on those days. Such waivers are allowed under EPA rules. Environmentalists sued the EPA earlier this year over the practice, so we likely haven't heard the end of this. and the Valley still faces a tough struggle to meet new standards for the smaller PM-2.5 particles, which can lodge deep in human lungs and other tissues, and cause all manner of pulmonary and cardiovascular illnesses. And there's still the problem of smog-forming ozone, which we're a long way from controlling.In fact, the Valley air is less polluted than it once was, and that's good news. But this is a classic glass-half-full or glass-half-empty situation. Officials at the San Joaquin Valley Air Pollution Control District, ag and business interests focus on the good work that's been done; environmentalists and medical experts focus on how much more there is to do. They're both right. For instance, the air district, with state help, has rid the Valley of thousands of older, dirty diesel engines used as static power sources on farms -- but diesel pollution is still the single biggest pollution threat to the health of Valley residents. Farmers have reduced dust by wetting dirt roads and making fewer passes in their fields with heavy machinery. Urban dwellers have reduced the use of fireplaces in the winter. But soot and dust are still a problem, the EPA's cheery designation notwithstanding.We have always known that cleaning the Valley's air would be a lengthy and very expensive task. But the cost of doing nothing is staggering. Several hundred people die prematurely each year because of our polluted air. We have one of the highest rates of childhood asthma in the nation. Valley residents spend an additional $3 billion-plus each year on extra health costs directly related to dirty air. Crop losses run into the millions, and even the once-pristine forests of the Sierra Nevada are being hammered. Celebrate the progress so far, to be sure. The Valley's air is cleaner. But temper the cheering with the sure knowledge that we have a very long way to go before the air in the Valley is truly clean. Sacramento BeeSacramento area's small banks benefit from WaMu meltdown...Jon Ortiz and Darrell Smithhttp://www.sacbee.com/103/v-print/story/1269855.htmlOn the surface, Washington Mutual's seizure and sale on Thursday didn't seem to hurt business at the failed thrift's 34 Sacramento-area branches.Customers on Friday made deposits and took money from ATMs that spit out receipts bearing the failed bank's name. WaMu signs still hung on the buildings. At one Elk Grove branch, an early morning customer filled out forms for new accounts.But local community and small regional banks and credit unions say the meltdown of Seattle-based WaMu, one of the nation's biggest mortgage lenders, has pushed more business their way. And some have seized on the crisis gripping Wall Street to sharpen their conservative, safe and service-oriented image."We've benefited," said Terry Halleck, president and chief executive of The Golden 1 Credit Union. "We've had new people coming in because of what's happened."...The uncertainty in the banking industry will probably continue. Wachovia Corp. is reportedly in sales talks with several banks. The Charlotte, N.C.-based firm has 10 offices in the Sacramento area.Unlike their bigger rivals, small banks didn't get into the kind of risky home lending and mortgage securities investments dragging down Wall Street, said Keith Leggett, chief economist for the American Bankers Association in Washington, D.C."Regional and community banks and credit unions in Sacramento and elsewhere are the bedrock of their communities," Leggett said. "Many have been around for a very long time, they've seen a number of cycles and they know their customers and cities intimately."Stockton RecordZoning decision may go to voteRedevelopment petition could reverse approval...Daniel Thigpenhttp://www.recordnet.com/apps/pbcs.dll/article?AID=/20080927/A_NEWS/809270330LODI - Opponents of Lodi's recently approved redevelopment zone, fearing the city will take on massive debt and break its promise to prohibit the seizure of private property, filed a petition Friday in hopes of forcing the matter to a public vote.The group Smart Lodi, which had about 20 volunteers walking Lodi's voter precincts in recent weeks, submitted an estimated 4,517 signatures in support of the referendum. The group needs roughly 2,600 signatures of registered voters to qualify for a special election next year.City officials forwarded the petition to the San Joaquin County Registrar of Voters, which will verify the signatures. The registrar's office is hoping to finish checking signatures within the next week or two.If enough signatures are deemed valid, the City Council members face two choices: put redevelopment efforts on hold and call a special election for 2009 or rescind their July approval of the redevelopment zone, which covers more than 2,100 acres in most of Lodi's East Side.John Talbot, who heads the small anti-redevelopment group, said he is sure the group has enough signatures to get an item on the ballot."We feel confident we've got a surplus over what was necessary," he said. "We're glad to see that this is one step forward."With a redevelopment zone, cities can keep a larger share of property tax money that normally would be funneled to other government agencies, such as the county and state. That money is used to finance the rehabilitation of deteriorating neighborhoods and businesses or to pay back debt incurred to pay for projects.City officials are targeting much of Lodi's East Side, an older section of town with many pockets of neglect, for redevelopment projects that they say there are not enough existing funding to cover.Mayor JoAnne Mounce, an outspoken critic of redevelopment who has called for a referendum, praised Smart Lodi and said the thousands of signatures gathered suggests many Lodians are eager to vote. "Anything of this magnitude, we owe it to our citizens to let them have a say in it," she said.The City Council's redevelopment supporters questioned whether opponents were truthful as they gathered signatures. But they also welcomed a ballot challenge, which they predicted would likely fail"I believe redevelopment is an economic shot in the arm that we desperately need," said Vice Mayor Larry Hansen. "I also believe the opponents have really misled the public, crying about huge debt and borrowing, and still talking about eminent domain, just really twisting the facts. ... Let's educate the voter and see what happens."Since its July 2 approval, city leaders have taken initial steps to form a redevelopment budget and a list of programs.City Manager Blair King earlier this month said the redevelopment district could generate up to $2.9 million for improvements in its first three years starting in 2009. The proposed three-year spending plan does not seek to borrow money to finance any programs.On Wednesday, the council, also acting as the city's Redevelopment Agency, will consider the city's first redevelopment project: a $100,000 program that will offer grants to low-income residents to fix up their home exteriors. The idea is to give a quick boost to property values, which will in turn generate more money for future redevelopment projects.In 2002, the last time Lodi tried to adopt a redevelopment zone, activists nearly forced a vote, submitting more than 3,500 voter signatures. Opponents primarily worried about the city's use of eminent domain.A referendum never made the ballot. City leaders halted redevelopment plans before that could happen.This time around, the city has outlawed eminent domain. And officials went on a public relations blitz, holding numerous public meetings and town-hall sessions over the course of a year.City spokesman Jeff Hood said a 2009 special election could cost taxpayers as much as $130,000.If enough signatures on Friday's petition are verified, council members, such as Bob Johnson, said they would embrace a vote, unlike city leaders six years ago."If it's going to be decided by a vote, then so be it," he said.EPA: Valley meets particulate air standards...Editorialhttp://www.recordnet.com/apps/pbcs.dll/article?AID=/20080926/A_NEWS/809260328/-1/A_NEWS14FRESNO - The U.S. Environmental Protection Agency - approving California's request to change the boundary of a non-attainment area in Kern County - now says the San Joaquin Valley meets federal clean air standards for coarse particulate matter known as PM10.The announcement Thursday drew a strong rebuke from environmentalists, who called it a "farce" and said air pollution continues to threaten the health of Valley residents. They said the decision effectively sweeps the Valley's air quality problems under the rug.PM10 consists of pieces of dust, soot and smoke that are hazardous to health.The EPA said it approved the state's request to divide the San Joaquin Valley into two air districts. Under the change, most of the San Joaquin Valley meets federal air standards, but an area defined as East Kern does not.Still, neither region meets federal standards for ozone or smaller particulate matter.As a result of the decision, the Valley will not be required to adopt more stringent measures to reduce dust and smoke emissions.Winter days in the southern portion of the Valley frequently exceed national air pollution standards.The EPA previously announced the Valley air district could ignore these bad-air days under the Clean Air Act, a decision being challenged in federal court.Baking company fined over emissions testing...The Recordhttp://www.recordnet.com/apps/pbcs.dll/article?AID=/20080927/A_NEWS/809270323SACRAMENTO - A leader in the baking industry was fined more than $300,000 for failing to test its diesel trucks for excess emissions at 58 fleet facilities, including Stockton, Manteca and Galt, officials said Friday.In addition to the fine, Bimbo Bakeries USA, based in Fort Worth, Texas, must send employees to a mandatory class on diesel emissions testing, provide records to the state California Air Resources Board and make sure all of its trucks meet federal emissions standards, the board said.Bimbo Bakeries is a part of Grupo Bimbo, which produces more than 100 brands of baked goods, including Oroweat, Tio Rosa and Bimbo.The board is charged with reducing health risks posed by dirty diesel engines, aiming to cut those emissions 85 percent by 2020. Diesel exhaust contains harmful gases and can cause cancer, heart and breathing problems, and premature death.Los Angeles TimesDelisting endangers wolvesIn a case of predator turned prey, rampant hunting puts the northern Rockies' gray wolf back on the endangered species list six months after it was removed...Julie Carthttp://www.latimes.com/news/science/environment/la-na-wolf28-2008sep28,0,7511618,print.storyDANIEL, WYO. — It's hard for ranchers here to figure how it came to this -- again.After railing for more than a decade against the federal government for reintroducing gray wolves to the region, after finally winning the battle to get the animals taken off the endangered species list, what went so wrong that Washington stepped in last week to protect the wolves all over again?It began near here in this high-altitude chaparral. No sooner were gray wolves delisted in March than sportsmen in Idaho, Montana and Wyoming began locking and loading. Wyoming officials declared 90% of the state a "free-fire zone." Hunters from around the state flocked to rural Sublette County to bag a wolf.Rancher Merrill Dana, 57, saw the results right away. Hunters aboard snowmobiles chased wolves across the early spring snow on his sprawling ranch. "The first morning it was opened up, they killed three up here," he said. "Trespassers. We didn't even know they were up here until we heard the snow machines."Dana said he has been offered as much as $2,500 for permission to hunt wolves on his land. He refused.As with many ranchers here, there is no love lost between Dana and wolves. He was mad the interlopers hadn't asked permission to hunt. "I wanted people I know to get them," said Dana, who was among a hunting party that eventually killed a 110-pound male.Through the early summer, an average of a wolf a day was being killed across the region. In all, at least 130 animals died since the delisting, or nearly 10% of the wolf population in the northern Rockies. Then, on July 21, a federal judge stopped the hunt. Last week, the U.S. Fish and Wildlife Service capitulated and began the process to relist wolves."People overreacted," said cattle rancher John Robinette of Dubois, Wyo. "I don't think the policy was intended as: 'Go out and see how many wolves you can kill.' "...For the time being, at least, wolves in the northern Rockies are back on the endangered species list while the U.S. Fish and Wildlife Service reconsiders the issue. Federal officials are monitoring the wolf management programs in Montana and Idaho, which canceled its wolf hunt planned for this month. In Wyoming, federal wildlife officials took over wolf management while a committee of the Wyoming Legislature crafts a new policy.It was a stunning reversal in what wildlife biologists had hailed as a success story. The species had flourished, its population growing by about 20% a year since wolves were reintroduced in Yellowstone National Park in 1995. This was proof the Endangered Species Act worked, the U.S. Fish and Wildlife Service said when it delisted the wolf in March.In July, federal District Judge Donald Molloy issued an injunction against the state wolf plans, after a challenge by environmental groups. He questioned whether indiscriminate killing would reduce wolf numbers back to crisis levels. He also said the hunt could isolate packs of wolves, reducing the species' gene pool.Some wildlife biologists say the damage is already done. Nearly all of the known wolves in Wyoming's free-fire area were killed in little more than a month. Recent estimates show that the wolf population in the three states began to decline for the first time in more than a decade even before the hunt...Suzanne Stone, who manages a wolf program in Idaho for Defenders of Wildlife, said that Wyoming's hunt couldn't have come at a worse time for wolves. "Late spring, they can't travel that well," she said. "They stay close to their den sites, and they are not going to leave the pups or the alpha female. It's an easy time of year to kill wolves."...Is your bank next to fail?As Washington Mutual is swallowed up, other institutions sagging under bad loans must ponder a similar fate...Andrea Chang, E. Scott Reckard and Tiffany Hsuhttp://www.latimes.com/business/la-fi-banks27-2008sep27,0,7113636,print.story Jittery depositors found business being conducted as usual at Washington Mutual Bank on Friday, a day after it was seized by the government and sold to JPMorgan Chase & Co. But investors, fearing more sudden consolidations and failures, pounded the stocks of other banks that specialized in the type of risky mortgages that brought down WaMu.Shares of the parent companies of Downey Savings and First Federal Bank, two Southern California savings and loans, fell 48% and 45%, respectively. Wachovia Corp., the nation's fourth-largest bank, saw its stock drop 27%. But shares of JPMorgan, Bank of America and Wells Fargo -- which are thought to be less exposed to troubled mortgages -- rose.Analysts said that Wachovia was under major stress and that a sale of the Charlotte, N.C.-based bank made sense because, like Washington Mutual, it was too big to be easily liquidated by the Federal Deposit Insurance Corp...The Wall Street Journal and New York Times, citing unnamed sources, reported that Wachovia was in preliminary takeover talks with three banks: Wells Fargo & Co., Citigroup Inc. and Spain's Banco Santander. The banks identified as suitors declined to comment...Wachovia has a far greater range of businesses than Washington Mutual, including commercial and corporate banking, and large brokerage and asset management arms. In a statement issued late Friday it said, "We are aggressively addressing our challenges and are working to strategically strengthen and manage capital and liquidity in this challenging environment."Part of what pushed WaMu over the edge, federal officials said Thursday, was a run on deposits. Nervous customers pulled $16.5 billion out of the bank in the last two weeks, even though FDIC insurance covers bank depositors up to $100,000 per account and can cover much greater sums, depending on how accounts are structured.Whether Wachovia could avoid a similar fate remained to be seen...JPMorgan, which paid the FDIC $1.9 billion for Washington Mutual, raised $10 billion in a stock sale Friday as a kind of down payment on $31 billion in losses it expects to record on Washington Mutual loans. Its shares, along with those of Wells Fargo, rose Friday.But other banks and savings and loans, including Wachovia, Newport Beach's Downey Financial Corp. and FirstFed Financial Corp. of Los Angeles, were hammered. Wachovia fell $3.70 to $10 and was trading still lower after hours; FirstFed sank $8.21 to $10.04, and Downey fell $1.87 to $2.03...Downey seems especially vulnerable because its low stock price makes it difficult for it to raise more capital...ReutersBuffett's 'time bomb' goes off on Wall Street...James B. Kelleher (Editing by Andre Grenon)...9-18-08http://www.reuters.com/articlePrint?articleId=USN1837154020080918CHICAGO (Reuters) - On Main Street, insurance protects people from the effects of catastrophes.But on Wall Street, specialized insurance known as a credit default swaps are turning a bad situation into a catastrophe.When historians write about the current crisis, much of the blame will go to the slump in the housing and mortgage markets, which triggered the losses, layoffs and liquidations sweeping the financial industry.But credit default swaps -- complex derivatives originally designed to protect banks from deadbeat borrowers -- are adding to the turmoil.'This was supposedly a way to hedge risk,' says Ellen Brown, the author of the book 'Web of Debt.''I'm sure their predictive models were right as far as the risk of the things they were insuring against. But what they didn't factor in was the risk that the sellers of this protection wouldn't pay ... That's what we're seeing now.'Brown is hardly alone in her criticism of the derivatives. Five years ago, billionaire investor Warren Buffett called them a 'time bomb' and 'financial weapons of mass destruction' and directed the insurance arm of his Berkshire Hathaway Inc (BRKa.N: Quote, Profile, Research, Stock Buzz) to exit the business.Recent events suggest Buffett was right. The collapse of Bear Stearns. The fire sale of Merrill Lynch & Co Inc (MER.N: Quote, Profile, Research, Stock Buzz). The meltdown at American International Group Inc (AIG.N: Quote, Profile, Research, Stock Buzz). In each case, credit default swaps played a role in the fall of these financial giants.The latest victim is insurer AIG, which received an emergency $85 billion loan from the U.S. Federal Reserve late on Tuesday to stave off a bankruptcy.Over the last three quarters, AIG suffered $18 billion of losses tied to guarantees it wrote on mortgage-linked derivatives.Its struggles intensified in recent weeks as losses in its own investments led to cuts in its credit ratings. Those cuts triggered clauses in the policies AIG had written that forced it to put up billions of dollars in extra collateral -- billions it did not have and could not raise.EASY MONEYWhen the credit default market began back in the mid-1990s, the transactions were simpler, more transparent affairs. Not all the sellers were insurance companies like AIG -- most were not. But the protection buyer usually knew the protection seller.As it grew -- according to the industry's trade group, the credit default market grew to $46 trillion by the first half of 2007 from $631 billion in 2000 -- all that changed.An over-the-counter market grew up and some of the most active players became asset managers, including hedge fund managers, who bought and sold the policies like any other investment.And in those deals, they sold protection as often as they bought it -- although they rarely set aside the reserves they would need if the obligation ever had to be paid.In one notorious case, a small hedge fund agreed to insure UBS AG (UBSN.VX: Quote, Profile, Research, Stock Buzz), the Swiss banking giant, from losses related to defaults on $1.3 billion of subprime mortgages for an annual premium of about $2 million.The trouble was, the hedge fund set up a subsidiary to stand behind the guarantee -- and capitalized it with just $4.6 million. As long as the loans performed, the fund made a killing, raking in an annualized return of nearly 44 percent.But in the summer of 2007, as home owners began to default, things got ugly. UBS demanded the hedge fund put up additional collateral. The fund balked. UBS sued.The dispute is hardly unique. Both Wachovia Corp (WB.N: Quote, Profile, Research, Stock Buzz) and Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz) are involved in similar litigation with firms that promised to step up and act like insurers -- but were not actually insurers.'Insurance companies have armies of actuaries and deep pools of policyholders and the financial wherewithal to pay claims,' says Mike Barry, a spokesman at the Insurance Information Institute.'SLOPPY'Another problem: As hedge funds and others bought and sold these protection policies, they did not always get prior written consent from the people they were supposed to be insuring. Patrick Parkinson, the deputy director of the Fed's research and statistic arm, calls the practice 'sloppy.'As a result, some protection buyers had trouble figuring out who was standing behind the insurance they bought. And it put investors into webs of relationships they did not understand.'This is the derivative nightmare that everyone has been warning about,' says Peter Schiff, the president of Euro Pacific Capital at the author of 'Crash Proof: How to Profit From the Coming Economic Collapse.' 'They booked all these derivatives assuming bad things would never happen. It was like writing fire insurance, assuming no one is ever going to have a fire, only now they're turning around and watching as the whole town burns down.' -------------------------------------------------------------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.