10-10-08

 10-10-08 Fresno Bee$18 million awarded for low-income housingState funds for central San Joaquin Valley spread from cities to small towns...Sanford Naxhttp://www.fresnobee.com/business/story/927218.htmlAlmost $18 million in state money awarded Thursday to developers of low-income housing could lead to dozens of new houses in the central San Joaquin Valley. The proposed projects include almost 50 houses in Fresno, in a rapidly growing section of Clovis and in small communities, such as Parlier and Lindsay. Parlier officials are receiving $1.5 million from the Joe Serna Jr. Farmworker Housing Grant program to help 30 first-time homebuyers purchase houses in the Somerset Homes project near Academy and Parlier avenues. Construction has slowed with the moribund real estate market, but city officials hope the grant will fuel more sales, said Lou Martinez, city manager."When we applied for it, we had several hundred homes coming in. But the market slowed down," he said. "We got the grant. Hopefully we'll be able to use it." The money was part of $106.2 million awarded to agencies throughout California. The funds came from Propositions 1C and 46, and could provide housing for up to 2,800 families. Dinuba, Huron, Delano, Kings County, Avenal, Corcoran, Woodlake and Farmersville were among governments that received funds."These awards are critical to help invigorate the state economy and fund projects that provide affordable housing," said Lynn J. Jacobs, director of the state Department of Housing and Community Development. Habitat for Humanity chapters in Fresno and Tulare, and the city of Clovis will use money they were awarded to help build badly needed homes for families with modest incomes...Self-Help also received $3 million for additional housing in Fresno, Kern, Madera, Stanislaus and Tulare counties, and the communities of Dos Palos, Lindsay and Reedley. Self-Help Enterprises is a Visalia-based organization that helps families construct their own homes. In return for the "sweat-equity" investment, the families buy the houses at reduced prices. Western group petitions for species protection...SUSAN MONTOYA BRYANhttp://www.fresnobee.com/641/story/927310.htmlA tortoise, a hare, a mouse and a half-dozen mussels are some of the creatures that a conservation group hopes to save through a "Western Ark" project aimed at petitioning the government for federal protection. WildEarth Guardians filed eight petitions Thursday seeking protection for a diverse group of 13 plants and animals with ranges that span more than a dozen states and stretch into Mexico and Canada."We deliberately wanted to petition at once for a variety of plants and animals and this is to underscore that the Endangered Species Act really is like Noah's ark," said Nicole Rosmarino, the organization's wildlife program director. "We want as many species that are in need to board the ark as possible." WildEarth Guardians reviewed the status of hundreds of species - including mammals, birds, reptiles, amphibians and invertebrates - looking for those that had the best cases for protection under the federal act."We really wanted a wide range just to demonstrate to the government and the public that that's what this law is all about," Rosmarino said. "The Endangered Species Act is all about protecting the rich tapestry of life." The "Western Ark" petitions are the latest salvo in the battle the group has been waging against the federal government over endangered species listings. WildEarth Guardians points out that the polar bear was the first U.S. species to be listed in over two years and that all of the listings under the Bush administration have been prompted by either citizen petitions or legal action.The organization in the past year has petitioned for protections for hundreds of species, including prairie wildflowers, butterflies, amphibians, fishes, snails, trees and cactus. The Fish and Wildlife Service vowed at the beginning of this year to make a dent in the backlog of species needing to be reviewed for possible ESA protection. In a step toward that goal, the agency announced last month it was taking a new, ecosystem-based approach to the endangered species list and proposing an all-at-once addition of 48 Hawaiian species to list. Rosmarino said the approach makes sense and is long overdue but the administration still has a lot of catching up to do.She added that her group will keep plugging away with petitions and legal pressure. "If nothing else, we're going to greet the next administration with a long line of passengers that urgently need to board the ark that the Endangered Species Act provides," she said. Nearly all the species listed in the petitions filed Thursday face a common threat of climate change, including the New Mexico meadow jumping mouse, the Jemez Mountains salamander, the white-sided jackrabbit and the Sonoran desert tortoise. The tortoise, which ranges across southern Arizona and Sonora, Mexico, is the focus of one petition filed jointly by WildEarth Guardians and the Western Watersheds Project. The groups say the tortoise's population has been reduced by more than half since 1987, and that urban sprawl, off-roading and grazing continue to put pressure on the species. In addition, long droughts brought on by climate change are expected to result in less food and lower reproduction rates for the tortoise, the groups say.Rosmarino said drought is also likely to have an impact on the white-sided jackrabbit's grassland habitat. Without federal protection, Rosmarino said, conservationists worry that the tortoise and the jackrabbit - like the other species listed in the petitions - might be lost. She quipped that the tortoise and the hare are not racing each other but are "in a race with extinction and neither of them has an interest in winning that race." Endangered pupfish rebounding...Las Vegas Review-Journal, http://www.lvrj.comhttp://www.fresnobee.com/384/story/927045.htmlSmall blue fish that are struggling to survive in a spring-fed cave in Death Valley have rebounded this fall. Federal biologists have counted 126 adult Devil's Hole pupfish - the highest number recorded since 2004. The Devil's Hole pupfish exists in the wild only around a shelf in a water-filled limestone cave within the Ash Meadows National Wildlife Refuge, 90 miles northwest of Las Vegas. For unknown reasons the species began steadily declining in about 1995 after historically numbering about 500 since the mid-1970s. They reached a low of 38 fish in the spring of 2006. Sacramento BeeLocal builders find few looking to buy new homes...Jim Wasserman http://www.sacbee.com/103/v-print/story/1303000.htmlThanks to deep discounts on repossessed homes, the summer season's existing home sales have been somewhat upbeat. Falling prices have boosted sales throughout the region above last year's levels.Not so for new homes. Sacramento-area homebuilders are still in a tailspin, having to compete with banks that are slashing prices on thousands of foreclosed properties.During the just-finished third quarter, builders sold 1,204 homes, the lowest quarter since the Folsom-based Gregory Group began tracking numbers in 1999. The firm counts sales in El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties.The local homebuilding industry, dominated now by Wall Street giants, attracted almost 20 percent fewer buyers in July, August and September than it did in the previous three months.Sales were off 24 percent from the same quarter in 2007."It's still challenging at best," said Gregory Group President Greg Paquin, releasing the newest quarterly statistics today. "The housing market is doing what it needs to do to correct (itself)."It's true. For all the pain and downsizing in the building industry – not to mention the huge economic losses – there is a silver lining. Less activity in the new-home market is helping trim a glut of for-sale signs for both new and existing homes in the capital region.At last count, Sacramento researcher TrendGraphix tallied 11,369 existing homes for sale in El Dorado, Placer, Sacramento and Yolo counties. That's a big fall from the year-ago peak of 16,081.New-home builders are driving down their share of excess inventory, too. A year ago, they had 3,226 homes – under construction, nearly finished or finished and vacant – all awaiting buyers. In industry parlance, those homes are called "standing inventory" or "overhang."Today, as area builders have pulled back sharply on construction starts, the standing inventory has fallen to 1,924 homes in the third quarter, Paquin said. It's the lowest in the capital region since the spring of 2005, he said.D.R. Horton sells Natomas lots...Texas home builder D.R. Horton Inc. recently sold its 187-lot Provence subdivision in Natomas to San Diego-based land buyer Ranch Capital Partners, according to Hanley Wood Market Intelligence of Costa Mesa.Hanley Wood analyst Kathryn Boyce in Sacramento said the deal is a partnership with Sacramento-based MDS Development. All of Horton's lots are ready for homes to be built.The Wall Street Journal reported earlier this month that Horton is selling thousands of acres in California at a loss to reap the tax benefits. The Journal quoted a land specialist who predicted a "rash of builders shedding assets."Here in Sacramento, Boyce said, "It's starting."Last week, Home Front reported that Los Angeles-based Pardee Homes sold 100 acres and 637 finished lots in Natomas, at a loss, to a Roseville land buyer, Granite Bay Development.Borrowers tell tales of regretThe phone has rung incessantly since Tuesday's news about Bank of America agreeing to an $8.7 billion rewrite of Countrywide's riskiest home loans. Those are the subprime and so-called "payment option ARM" loans issued from 2004 through 2007.The settlement stems from lawsuits filed against Countrywide by California Attorney General Jerry Brown and his colleagues in other states. All alleged a pattern of fraud and deception in placing borrowers in risky loans that were profitable for the lender. BofA, which bought Countrywide in July, settled the suit and will rewrite 400,000 U.S. loans, 125,000 of them in California...They've poured out tales of regret for paying too little attention before signing their loan papers. Some are still current on payments. Others are months behind.All sound frightened, frustrated and embarrassed by an American dream that was supposed to turn out much different than it has...Stockton RecordNew limits on deposits explained...Michelle Singletary, Washington Posthttp://www.recordnet.com/apps/pbcs.dll/article?AID=/20081010/A_BIZ0202/810100315/-1/A_BIZEverywhere I go, I can feel the tension. People are naturally concerned about their investment portfolios, but increasingly, they're worried about the safety of their cash.An elderly couple wrote me and asked the following:"Can you help us understand the limits on insurance for CDs, money market accounts and checking accounts in banks, savings and loans, and credit unions?"With a number of major bank failures and takeovers, many people are wondering how much of their cash is protected.Last Friday, President Bush signed the Emergency Economic Stabilization Act of 2008. That law raised the amount of money in bank and savings accounts that the Federal Deposit Insurance Corporation covers from $100,000 to $250,000 per depositor.However, here's why you have to pay attention to all the fine details of the plans to "protect" our cash. The increase in the FDIC coverage is only temporary.The basic FDIC deposit insurance limit will return to $100,000 after Dec. 31, 2009. The legislation did not increase coverage for retirement accounts, which continues to be $250,000.If you have questions about FDIC coverage, go to www.myfdicinsurance.gov. On the site you will find EDIE, a calculator that will tell you how much of your cash is covered by the FDIC.The new law also temporarily increased the insurance limit to $250,000 on accounts in federal credit unions and the majority of state-chartered credit unions.Federal credit unions are regulated by the National Credit Union Administration, an independent federal agency. The NCUA operates and manages the National Credit Union Share Insurance Fund, which insures the deposits of nearly 89 million accounts in all federal credit unions and the overwhelming majority of state-chartered credit unions.In nine states, 163 state-chartered credit unions offer coverage from American Share Insurance, a private insurance company. The company insures up to $250,000 per account. If you have an account at a credit union with this insurance, it is not guaranteed by the federal government. However, Dennis R. Adams, president and chief executive of ASI, says depositors with its coverage should not be worried about their accounts. "We have a good track record and good financial statements," Adams said. "Credit unions are not the source of the problems today."Before the FDIC limits were raised, the Treasury Department announced it would provide protection for cash stashed in money market mutual funds, which are offered by mutual fund companies. These funds are not the same as money market accounts offered by banks, which are FDIC-insured.Under recently released details of this program, the federal government says it will guarantee to investors that they will receive $1 for each money market fund share held as of close of business on Sept. 19.The program only covers money market funds that are regulated under Rule 2a-7 of the Investment Company Act of 1940, are publicly offered, are registered with the Securities and Exchange Commission, and maintain a stable share price of $1. This includes both taxable and nontaxable funds.The guarantee will be triggered if a participating fund's net asset value falls below $0.995, commonly referred to as breaking the buck.The program will exist initially for three months, after which the secretary of the treasury has the option to extend the program up to the close of business on Sept. 18.If the program is extended, funds would have to renew their participation after each extension to maintain coverage. The program provides a guarantee on a fund-by-fund basis. In the event that a participating fund is liquidated, a guarantee payment should be made to investors in about 30 days, according to the Treasury Department. However, that payment promise is "subject to possible extensions at the discretion of the Treasury."Zuccarelli said the Treasury Department is not releasing the names of fund companies that have enrolled in the program. I think they should."Investors need to contact their funds to see if they are participating," she said.As of last Friday, the department had collected $69 million in fees for the guarantee program, Zuccarelli said.With all these temporary government solutions, the word for the day is diversify. I just can't say that enough.Growth battle ends; who won?...Michael Fitzgeraldhttp://www.recordnet.com/apps/pbcs.dll/article?AID=/20081010/A_NEWS0803/810100320/-1/A_NEWSSpinning the biggest 180 of the year, The Spanos Cos. this week abruptly ended its all-out assault against the General Plan settlement agreement.The giant developer's campaign to undo the agreement (a council-approved lawsuit settlement agreeing to curtail sprawl in Stockton's General Plan 2035) ended with an upbeat announcement.To wit: Private negotiations with the city and others have assured the company Stockton's growth will be the open, robustly democratic process that it ought to be.Ri-i-i-ght.Only a day earlier, The Spanos Cos. were campaigning hammer and tong to undo the deal, reached between the city and The Sierra Club, which sued, and Attorney General Jerry Brown, who threatened to sue, over Stockton's sprawl.The Spanos Cos. hired signature-gatherers to stand outside every big box in town and qualify a referendum to overturn the agreement; cobbled together The Alliance for Responsible Planning; commissioned phone polls; created a Web site; lobbied the council; fired off mailers.They denounced the council's "closed-door" deal. They championed public involvement.Then, supposedly just when they had gathered 25,000 signatures, more than enough, they ceased work on the referendum. They picked up their marbles and went back to their helipad.And proclaimed to be satisfied. It's hard to see why. On the face of it, they didn't get much."No substantive changes were made to the agreement," City Attorney Ren Nosky said.They got "clarification" that the settlement agreement, which calls for sprawl to be balanced by infill, will be open to public comment and to alternative proposals (by them, of course), not just some diktat by the likes of Jerry Brown.That seems reasonable. What seems almost bizarre is the lengths they went to for "clarification."We had to, a Spanos lieutenant said."I specifically stood up in front of the council and requested additional time to work with council and city staff to secure the clarifications that we were interested in, in a legally binding process," said David Nelson, senior vice president of The Spanos Cos."That wasn't forthcoming," Nelson said. "So we had very few options left to us in terms of securing those clarifications."Eric Parfrey, head of the local Sierra Club, and party to the private negotiations, said The Spanos Cos. wanted much more."Spanos very much wanted the city to admit that the previous development agreements they had signed with the city in 2004 ... gave Spanos some sort of vested rights to move ahead with development north of Eight Mile Road," Parfrey said.Developments by Spanos' rivals, such as Grupe's Sanctuary and Arnaiz's Mariposa Lakes, already approved, and closer to construction, enjoy a competitive advantage.Improving The Spanos Cos.' position - by accelerating The Gateway, Spanos' multiplex-anchored "lifestyle center" and housing project at Interstate 5 north of Eight Mile Road - was a major negotiating point, Parfrey said.Especially because the next council might not be pro-growth. "That's what this was all about; that's why Spanos spent $500,000 on this campaign," Parfrey said.City leaders stood firm, Parfrey said. They had to. The 2004 agreements outline where developers can plan to build; but they do not give developers the right to build.The Spanos Cos. lost that point, Parfrey said.A city official in on the talks confirmed Parfrey's account of this Waterloo.But The Spanos Cos.' Nelson said this version was not true.The Spanos Cos. just wanted to ensure its existing rights to build and future rights to submit proposed alternatives to the (less business-friendly) settlement blueprint, he said. I cannot reconcile the two versions of these private negotiations.Yeah, about that: Does it seem funny that a company that preached open public processes practiced private negotiations?Probably The Spanos Cos. would argue its efforts opened Stockton's planning to public input. Others say the public already had input, as its elected representatives approved the settlement agreement.Wal-Mart fight far from over...Keith Reidhttp://www.recordnet.com/apps/pbcs.dll/article?AID=/20081010/A_NEWS/810100322/-1/A_NEWSLODI - Wednesday's decision by the Lodi Planning Commission to deny an environmental impact report for a proposed Wal-Mart Supercenter has put yet another delay in the retailer's near six-year quest for an expanded store on Lower Sacramento Road.The 5-1 decision not to certify the EIR is expected to be appealed by Wal-Mart and developer Darryl Browman, who plan to take the public hearing to the City Council. If the council certifies the EIR on appeal, then the project would return to the Planning Commission for approval of a land-use permit, city spokesman Jeff Hood said.If the council denies the EIR, the project dies, Hood said.Community Development Director Rad Bartlam recommended approval of the EIR, saying it meets all the city's specifications, but that wasn't enough for commissioners who wanted to see further analysis on how a supercenter could affect small businesses in Lodi, especially during tough economic times...San Francisco ChronicleClimate change forcing animals to move up...David Perlmanhttp://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/10/10/MNA113DMFK.DTL&hw=endangered+species&sn=004&sc=589From the mountains of Yosemite to the tropical lowlands of Costa Rica, global warming is forcing animals and plants to move to higher and higher elevations, searching for climates that have allowed them to evolve and thrive for millions of years.The exodus from less tolerable habitats to cooler and more benign environments has been taking place for nearly a century, according to scientists who scrambled over rocks and ridges, through steamy rain forests and up steep volcanic slopes to complete their painstaking surveys. And in a few cases, the moves are taking a toll: Some mountain animals, left with smaller ranges to forage for food, may face extinction, while others are up against Darwinian competition as their new habitats intrude on already-established animal populations."These kinds of changes have been going on forever," said James L. Patton, a biologist at UC Berkeley's Museum of Vertebrate Zoology. "The only difference is that this has probably happened in our lifetime. It's the speed with which these changes are taking place that gives one pause."As the pace of global warming quickens, change is everywhere: from glaciers melting in Greenland, to ice shelves crumbling in Antarctica, to coral reefs dying in tropic seas - and now to animal and plant life in many parts of the world.In a report appearing today in the journal Science, Craig Moritz, also of the Museum of Vertebrate Zoology, Patton and their colleagues describe how they surveyed 28 species of mammals studied by the late UC ornithologist Joseph Grinnell beginning in 1914. They covered many of Grinnell's sites from the San Joaquin Valley across all of Yosemite, over the crest, and down to Mono Lake and then compared the results.Their report is appearing with another one on the effects of climate change in Costa Rica by an international group headed by Robert K. Colwell, an entomologist at the University of Connecticut who was formerly also a UC Berkeley scientist.The impacts of warmingMoritz and Patton note that since Grinnell completed his work, the central Sierra has seen continuous warming, with nighttime low temperatures averaging 5 degrees Fahrenheit higher than they were 90 years ago. During the same period, more than half of the species he studied have shifted their ranges upward by as much as 1,600 feet, the researchers said. Many of the others, Moritz and Patton said, stayed put in ranges that shrank over time, largely the result of human development rather than climate change.Trouble ahead for insectsBased on their observations, the scientists foresee trouble ahead: As the climate warms, even in the wet tropics, Colwell said, the ranges of many insect species will become more isolated in their higher habitats...Jenner Headlands to be preserved...The Press Democrat, www.pressdemo.comhttp://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/10/10/state/n062625D14.DTL&hw=conservation&sn=010&sc=1000A rugged stretch of the coast near Jenner is a step closer to being preserved in what's being called the largest conservation acquisition in Sonoma County history.Six agencies and nonprofits have combined to strike a deal to buy the Jenner Headlands for $36 million.The 5,630-acre headlands property -- covered by expanses of grass and woodlands -- is believed to be among the largest privately held properties along the California coast.The Sonoma County Agricultural Preservation and Open Space District will put up about a third of the purchase price.The rest of the money will come from the Sonoma Land Trust, the state Coastal Conservancy, the California Conservation Board, the Gordon and Betty Moore Foundation and the National Oceanic and Atmospheric Administration.The deal is expected to be completed early next year.Nuclear Weapons complex changes advance...H. JOSEF HEBERT, Associated Press Writerhttp://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/10/09/national/w143025D06.DTL&hw=livermore+lab&sn=001&sc=1000The Energy Department moved ahead Thursday on further restricting the nation's most dangerous nuclear material, part of a plan to scale back and modernize management of the U.S. nuclear weapons stockpile.The department gave preliminary approval to an environmental impact study on the consolidation program, which includes limiting plutonium and highly enriched uranium to just five sites, compared with seven today. The government also would close 600 buildings and structures at the facilities and reduce the number of workers involved in weapons programs by 20 to 30 percent.None of the seven primary weapons complex facilities, including three nuclear weapons research labs, will be closed. But activities will be combined, in many cases."The world is changing and we are changing along with it," said Thomas D'Agostino, administrator of the National Nuclear Security Administration, the agency within the Energy Department that oversees the weapons program."The number of U.S. nuclear weapons is shrinking, budgets are flat or declining and we need a smaller, more secure, more efficient infrastructure that reflects these realities, and yet retains our essential capabilities," D'Agostino said.In a conference call from the government's Y-12 National Security Complex near Oak Ridge, Tenn., D'Agostino said the program will not require new money beyond the agency's five-year spending plan, and would save dollars in the future.The next administration will have to carry out the effort. D'Agostino said he is "very comfortable" it will stand up to scrutiny.A final go-ahead cannot be made for at least 30 days.The agency already has taken nuclear material from the Sandia National Laboratory near Albuquerque, N.M., and will complete the transfers from the Lawrence Livermore National Laboratory near San Francisco by 2012.Plutonium stockpiles at Lawrence Livermore have concerned citizen groups because suburban neighborhoods have moved right up to the facility's boundary lines in recent years, causing more complicated security requirements.The plan would:_Focus uranium manufacturing, dismantlement and research at a new center within the Y-12 Oak Ridge complex._Concentrate manufacture of plutonium triggers and other plutonium research at the Los Alamos National Laboratory in New Mexico. The plan calls for making a maximum of 20 triggers a year._Continue to use the Pantex weapons facility near Amarillo, Texas, as the center for plutonium warhead assembly and disassembly as well as some warhead surveillance work now done at Lawrence Livermore. An underground storage facility would be built for plutonium triggers, reducing the size of the facility and cutting security costs._Concentrate tritium research and manufacture at the Savannah River complex near Aiken, S.C. Tritium is a gas use to boost the efficiency of a nuclear warhead. Excess plutonium also is being shipped to Savannah River for storage.The other sites affected by the plan are the Nevada Test Site; Sandia, with locations in New Mexico and California; and the Kansas City Plant in Missouri.On the Net: National Nuclear Security Administration: nnsa.energy.gov/Santa Cruz SentinelWork in store at Cemex quarry in Davenport to meet state law...Shanna McCordhttp://www.santacruzsentinel.com/localnews/ci_10686403There's some work in store at Cemex's limestone and shale quarry before the company is in "full compliance" with state and county mining regulations.Four areas related to mining operations and the environment were identified as needing improvement during a compliance review hearing Wednesday with the county Planning Commission: drainage and erosion control, sensitive habitat protection, slope stability and re-vegetation.Cemex officials agreed with the commission's quarry assessment, and promised to work aggressively to address each issue by next October, a deadline set by the Planning Department.They did not have an estimate on what the various projects would cost the company to complete. "We've been working hand-in-hand with the county on this," Cemex spokeswoman Jennifer Borgen said Thursday. "We fully agree with all of their recommendations, and we look forward to moving forward."The 300-acre quarry, in operation since 1964, is located off Bonny Doon Road nearly 2.5 miles from Highway 1. Materials from the quarry are transported by conveyor belt 2.5 miles to the Cemex plant in Davenport and used to make cement.Many of the required compliance projects have been started, but the company has encountered some delays due to circumstances beyond Cemex's control, quarry manager Rob Walker told the planning commission. For example, Cemex is required to improve the fish passage at the mouth of Liddell Spring. However, several design changes to the proposed fish baffle and the process of obtaining permits from various state agencies, including Fish and Game, Caltrans and the Army Corps of Engineers, have stalled the project, Walker said. An application has been submitted to Caltrans to build the fish baffle in a tunnel under Highway 1. After Caltrans' approval, another application will be sent to the Corps of Engineers, Walker said.Cemex is required to mitigate any slight impact on water quality at Liddell Spring, a source of drinking water for the city of Santa Cruz. Continuous research and monitoring has determined the impact of the quarry on water quality is small. Cemex is required to compensate the city for any water lost during quarry operations, including paying the power and phone bills for Liddell Spring and allowing city employees access to the property.In all, county planner David Carlson said Cemex has mostly met its permit requirements. He agrees that some of the issues are out of the company's control."It's not really all their fault, but it still reflects on their compliance," Carlson said. "If we thought it was egregious enough, we'd initiate enforcement proceedings or penalties or revoke their permit. We don't think we need to go there. They've worked well with us in the past."Mines are required to under go a compliance review every five years. However, the Cemex quarry was last reviewed by the county in 1997.That's partly because of the complicated, sensitive issues with the Cemex Quarry and its location near the coast, Carlson said."This is one of the most complex quarry permits in the county," he said. "But to a certain extent there's no excuse for the lack of review."There are eight quarries in Santa Cruz County.Borgen said it's possible the Cemex Quarry could close within 10 years, depending on the quality and quantity of resources there.State pulls $6.8 million from Pajaro Valley water pipeline plan...Donna Joneshttp://www.santacruzsentinel.com/localnews/ci_10686396WATSONVILLE -- To some, the plan to import water to the Pajaro Valley has always seemed like a pipe dream.The state Department of Water Resources is growing skeptical of the proposed 23-mile pipeline as well, and wants returned the $6.8 million it allocated for what was the centerpiece of the Pajaro Valley Water Management Agency's solution to overdraft of the groundwater basin."Rather than just have that money sit, we want to be able to take those funds and expend them on projects that are ready to go," said Kamyar Guivetchi, chief of the state water department's division of planning and local assistance.Dennis Osmer, chairman of the local water agency board, called the decision "an opportunity lost" for Pajaro Valley, but said it was difficult to argue with the state's position. "Certainly the state has the basis for taking the money back," he said. "We haven't made any progress on it."The good news, Osmer said, is that state water officials will keep the taps open for reimbursement of millions more dollars spent on a nearly complete wastewater treatment plant and to build a network of pipes to distribute treated water to coastal farmers for irrigation.State water officials raised questions about the local agency's ability to complete projects due to its financial troubles and threatened to suspend payments in a Sept. 12 letter to the agency.Last year, the agency lost $4 million, about half its annual budget, when a state appeals court ordered it to stop charging a water pumping fee that was imposed without approval by voters in violation of California law. A second fee that accounts for most of the remainder of the agency's funding is being challenged in court.Pajaro-Sunny Mesa Community Services District, which filed the lawsuit, is seeking a summary judgment -- a decision without a trial. A hearing is set for Dec. 12. If the water agency loses, it could go under.Guivetchi, who met with Osmer on Wednesday in Sacramento, said state officials want the local water projects to be successful, but asked that the Pajaro Valley agency designate a back-up fiscal agent to handle state funds if it no longer can.Osmer said the board will discuss the issue Wednesday.Osmer also said the agency's basin management plan has a gaping hole without the pipeline, which was supposed to supply close to three-quarters of the 18,500 acre feet of new water officials estimated would be needed to solve the overdraft problem.The state's recent decision is just the latest in a series of obstacles to the pipeline, including the agency's inability to secure water from the Central Valley.Redoing the basin management plan will be part of an effort to secure new financing for the agency, Osmer said. "We have to recognize we're starting over," he said.Monterey HeraldE. coli traced to CaliforniaMichigan: Not clear where lettuce was grown, processed...MARIE VASARIhttp://www.montereyherald.com/ci_10686400An E. coli O157:H7 outbreak in tainted iceberg lettuce that sickened 36 people in Michigan last month has been traced back to California growers. Michigan agriculture officials had previously named the supplier of the lettuce as Aunt Mid's Produce of Detroit but had not identified where the lettuce was grown. The outbreak, involving bagged, industrial-sized packages of iceberg lettuce sold through wholesale venues to restaurants and institutions, sickened students at Michigan State University and the University of Michigan, and inmates at Lenawee County Jail before spreading to metro Detroit. The Detroit Free Press reported late Thursday that Michigan agriculture officials had confirmed the state of origin, although a region wasn't specified. Several questions remain to be answered, including in which part of California the lettuce originated. Bob Perkins, executive director of the Monterey County Farm Bureau, said September is peak season for Salinas Valley lettuce growers. "That's when our growers are very busy," said Perkins. "If it's California bagged lettuce, there's a real probability that it will be tied to our area, or to somebody that we know." Even if it turns out that the lettuce was grown outside the Salinas Valley, he expects the implications could weigh heavily on a leafy green industry still reeling from the 2006 E. coli outbreak in spinach that sickened more than 200 and left three people dead. Consumers from California may be familiar enough with the state's geography to differentiate the San Joaquin Valley or Imperial Valley from Salinas Valley, but Perkins thinks that's not likely the case for someone living outside the state. "For anybody outside of California," he said, "what they're going to remember is California." As of late Thursday, the news that California had been identified hadn't yet traveled through the local industry. Perkins said the other big question will be whether health officials will be able to suggest a possible cause for how the bacteria was introduced. "Everybody's going to want to know as much as possible about the potential causes, because everybody is doing pretty much everything they can to prevent outbreaks," he said. For consumers reading about food safety outbreaks, he suspects it's hard to know what choices to make. And confusion doesn't help the industry sell its product, he said. "Just talking about California certainly affects consumer confidence," he said. Likewise, Dennis Donohue, president of the Grower-Shipper Association of the Central Coast, said the determination that California is the source of the lettuce is only one part of a complete picture. "How was the product handled by the processor? How was the product handled by the product's consumers? How was it consumed?" he said. As a founding member of the California Leafy Greens Handler Marketing Agreement, Donohue said he was proud of the efforts grower-shippers have made to ensure food safety. "Obviously we would hope that the source would not be identified with that membership," he said. "But no one has ever said it would be a zero-incident world." But wherever in California the lettuce turns out to have been grown, Donohue said, it will have some impact on consumer trust. "Consumers, in terms of confidence levels, they tend not to split hairs. So the strongest link is affected by the weakest link," said Donohue. "This is an issue that has affected our industry, if nothing else, in costs and practices, and we're going to have to be eternally vigilant." Aunt Mid's Produce of Detroit was identified as one of the Michigan suppliers. The company immediately stopped its lettuce distribution, said Chief Executive Officer Philip Riggio, and had its supply and processing facilities tested by outside experts. The tests found no evidence of contamination. The Michigan Department of Agriculture also tested Aunt Mid's lettuce, with no findings of E. coli, said Jennifer Holton, MDA spokeswoman. Holton said Aunt Mid's will be able to resume operations soon and the investigation is ongoing in cooperation with California food and safety officials. The Detroit Free Press contributed to this report. Los Angeles TimesAdvocacy group challenges proposed suspension of Los Angeles River kayakerPublic Employees for Environmental Responsibility says Army Corps of Engineers was retaliating for Heather Wylie's objections to agency's decision weakening Clean Water Act protections for the river...Bettina Boxallhttp://www.latimes.com/news/local/la-me-corps10-2008oct10,0,995818,print.storyHeather Wylie's kayaking trip down a stretch of the Los Angeles River one Saturday in July was more than a little weekend urban adventure.Wylie, a project manager in the Ventura field office of the U.S. Army Corps of Engineers, joined local environmentalists to make a point: You can float a boat down the concrete-lined river channel, even if what you're paddling through is mostly street runoff and treated water from sewage plants.Wylie's bosses were not happy. Two weeks later, they moved to suspend Wylie without pay for a month, saying she had flouted corps policy with the boat trip and e-mails she sent to office colleagues.On Thursday, Public Employees for Environmental Responsibility, an advocacy group, filed a whistle-blower complaint with the U.S. Office of Special Counsel, charging that the corps was retaliating for Wylie's objections to the agency's decision that weakened Clean Water Act protections in the river's upper watershed."I was protesting what my agency was doing because it was in contravention of the law and not in the public interest," said Wylie, 29.Earlier this year, the corps decided that only four miles of the 50-mile-plus river were navigable, a standard that figures into whether seasonal streams and wetlands feeding the river's upper reaches are covered by the Clean Water Act.If most of the L.A. River is not considered navigable, that could make it easier to develop the foothills and mountains in its upper watershed.Wylie, who has worked for the corps for more than four years, has made no secret of the fact that she thinks the agency was wrong in declaring only a small portion of the river boat-worthy. In an unusual move, the U.S. Environmental Protection Agency announced in August that it would make the final call on what waters in the L.A. River are navigable.In an Aug. 7 memo to Wylie released by Public Employees for Environmental Responsibility, Wylie's boss wrote that she had sent "unauthorized and inappropriate" e-mails to 15 staff members complaining about the corps' interpretation of a 2006 Supreme Court ruling on what waters qualify for Clean Water Act protection. It also accused her of participating in "an unauthorized boating expedition."The memo's author, regulatory division branch chief Aaron Allen, referred The Times to a public affairs officer who could not be reached for comment.Jeff Ruch, executive director of PEER, said Wylie, who was off duty when she paddled down the river, has a 1st Amendment right to speak out.As water level drops at Diamond Valley, rationing becomes more likelyWith the lake -- intended as an insurance policy in case of natural disaster -- at only 60% capacity, the MWD board could start rationing Southern California cities as soon as 2009...Tony Perryhttp://www.latimes.com/news/local/la-me-water10-2008oct10,0,6308831,print.storyDiamond Valley Lake, the giant regional reservoir in Riverside County, has been called the "jewel" of Southern California when it comes to pleasure boating and bass fishing.But the jewel has been tarnished by the water woes gripping Southern California.The water level in the 4,500-acre lake near Hemet is down by nearly 40%, and on Monday the lake's owner, the Metropolitan Water District of Southern California, will close the boat ramp.Anglers have watched for months as the water level has declined, leaving a bathtub-style ring around the 20 miles of shoreline."It's just gotten worse and worse every day," bass fisherman Clint Sumner, 41, of Escondido said as he eased his 21-foot Ranger into the water this week.Opened in 2003 at a cost of $2 billion, Diamond Valley was meant to be the major drinking-water storage facility for thirsty Southern California, as well as an insurance policy against a traumatic cutoff of water. It's the largest reservoir in Southern California.Now it's a sign of the twin problems hitting the region: For two years, drought and cutbacks have kept the MWD from diverting any Colorado River water for storage at Diamond Valley; and a judge's decision designed to save the Delta smelt led to a reduction of water delivered from Northern California.In June 2006, Diamond Valley Lake was full, with 810,000 acre-feet of water. This week, the figure was at 485,236 and dropping. Once, the deepest spot measured 280 feet, now it's at 200.As supply has decreased, water from Diamond Valley has been sent by the MWD to its customers to supplement their own declining allocations. "We'd have been rationing three years ago if we didn't have Diamond Valley," said MWD General Manager Jeff Kightlinger.But the end may be in sight, hastening the day of rationing throughout Southern California. Estimating when Diamond Valley will no longer be able to ship water to local agencies is a mixed issue of hydrology and politics.Drawing the reservoir down too far could leave the region in dire straits -- much like a person who stops paying his homeowner's insurance to save money just days before his house is hit by fire.Diamond Valley was designed as an emergency source of water in the event of an earthquake or other disaster that could cut flows from the Colorado River and Northern California.Reservoirs throughout the state are in similar predicaments as storage levels drop. Farms, cities and suburbs are all being hit.In Los Angeles, the mayor has been pleading with residents and businesses to reduce consumption, backed up by a new "drought buster" ordinance.In Imperial Valley, where farmers long enjoyed virtually unlimited water supplies, a fallowing program is being developed whereby farmers would let a portion of their fields go dry. And in San Diego, the water authority is paying for gloomy television commercials warning of rationing if residents don't stop lavish watering of lawns and washing of cars.For bass fishermen, the loss of the boat ramp means cancellation of tournaments and a prowl for new fishing spots. Last year, 13,000 launches were made from the 11-lane ramp at Diamond Valley. With the water receding, the chance of vehicles getting stuck in the mud has increased.The MWD board will consider extending the ramp farther into the water so that launching can resume. As an engineering feat, it would not be difficult.But it could cost an estimated $1.7 million at a time when the Wall Street financial meltdown is making money tight even for public agencies with good credit, like the MWD. A problematic issue is whether the needs of bass fishermen should compete with projects enhancing the ability to bring water to customers.Soon the MWD board will consider plans for rationing. The choices may boil down to two equally unpleasant alternatives: "easing into it" with relatively moderate reductions in 2009 or waiting until 2010 and cutting "steeply," Kightlinger said."Our board will be debating when to pull the trigger on rationing," he said.At Diamond Valley, visitors can still rent pontoon boats or rowboats.Still, fishing enthusiasts say it's not the same as putting your own craft into the water, speeding to your favorite spot where the fish lurk (near the dams is said to be the best) and then matching wits with the largemouth or striped bass.Stan Achhammer, 61, of Yucaipa, a retired troubleshooter for a telephone company, figures he'll try some other local lakes but doubts any will match Diamond Valley."I guess I'll pick up the wife and cats and move to Clear Lake" in Northern California, he said.OCRegisterWater agency kept uranium contamination at desert site secretMetropolitan water district knew of radioactive contamination at Hayfield site for eight years. Agency says the problem is not a "show-stopper."...BRIAN JOSEPHhttp://www.ocregister.com/articles/water-uranium-hayfield-2185785-district-agencySouthern California's largest water agency kept a groundwater project on its books for eight years without disclosing to key officials or the public that the site is contaminated with uranium and other toxic chemicals, an Orange County Register investigation has foundDocuments and interviews show that the Metropolitan Water District of Southern California, which provides water to 18 million people, knew in 2000 about a "major stumbling block" with the proposed Hayfield Groundwater Storage Program.Water tests found that uranium contamination at Hayfield averaged roughly 16 picocuries per liter, with a high of 35 picocuries per liter, documents from 2000 show. The U.S. Environmental Protection Agency's limit for uranium in drinking water is 20 picocuries per liter.Water from the Colorado River, a major source of Metropolitan's water, generally has 4 picocuries of uranium per liter. The five largest community water agencies in Orange County report uranium levels of 1.9 to 9.4 picocuries per liter, on average.Since those 2000 tests, water planners have touted the Hayfield project in front of Congress and, earlier this year, at a water conference in San Diego. In July, agency staff cited Hayfield as a resource available if drought conditions persist in California. Staff told the district board that nearly 4 billion gallons of water – enough to supply the city of Buena Park for a full year – could be retrieved from Hayfield in 2009. On Tuesday, the staff plans to ask the board to approve preliminary steps to extract water from the site.The top official at the water district says the contamination is isolated and the water can be diluted with clean Colorado River water to the point that it's not a problem. He said that everyone who needed to know about the contamination was told about it."It was never communicated as a show stopper because we didn't believe it was," General Manager Jeff Kightlinger said.But environmentalists and state water officials were surprised when the Register showed them documents detailing the uranium contamination."I would expect a higher level of truth," said Elden Hughes of the Sierra Club, a Joshua Tree activist who once urged the district to pursue the Hayfield project. "They should have been more forthright."Water experts said that Metropolitan's plan to dilute the water to lower the concentrations is a common and generally accepted solution. Well tests from this year, provided by the district, show uranium levels ranging from 2.3 to 17 picocuries per liter, with an average of 5.87. Those numbers are different than the earlier numbers, in part, because the 2000 numbers reflect multiple tests on eight wells. The new numbers represent one test for each of 13 wells. District officials also said that all water tested at Hayfield represents "raw," untreated water. Before any of that water is delivered to residents it would be treated, which would further lower the level of contaminants.For the amounts typically found in water, uranium is dangerous not for its radioactivity but for its properties as a heavy metal. Uranium is toxic to kidneys and in high enough doses can kill tissues surrounding the organs. As with many contaminants in water, there is disagreement among scientists about exactly how much uranium is too much. Although the EPA says 20 picocuries per liter is safe, the state Office of Environmental Health Hazard Assessment has set a goal of no more than 0.43 picocuries of uranium per liter in drinking water. "How safe is safe?" asked UC Riverside soil chemistry professor Christopher Amrhein.Science, he said, may suggest that the level be extremely low for health reasons, but federal officials also consider what's practical. "Science can only go so far in what these standards should be," he said, adding, "It's considered safe at" the federal limit.But experts said the agency may face a public relations problem when the public learns about the uranium in the water, and some of Metropolitan's own member agencies may refuse to take it."A lot of people in Newport are upset about fluoride (in the water)," said Jan Vandersloot, an Orange County environmentalist. "Uranium in drinking water... I think that would be a cause for concern."The Hayfield saga reflects a long history of controversy at the 80-year-old water agency. Metropolitan currently faces two lawsuits that allege it is poorly managed and suggest it makes decisions based on politics instead of the public interest. "There isn't a thing they do that doesn't have a political part to it," said Art Aguilar, general manager of the Central Basin Water District, which is suing the agency over its drought plan. "You protect your kingdom and the only way to protect your kingdom is to be politically astute."Board president Timothy Brick, of Pasadena, said he takes criticism of the agency, commonly known as Met, in stride."We operate in a political context. Sometimes we make a good target," he says. But Brick argued that Met is accountable to the public and provides good service.At least 10 water districts statewide have rationed water this year in response to a statewide drought, and some land development projects in Southern California have been delayed for months as officials scramble to ensure there's water available for new construction. With an annual budget of well over $1 billion and a service area of 5,200 square-miles, Met is so important to the region that any solution to the water crisis will require its cooperation.A project of "great potential"The Hayfield Basin, in a desert region of Riverside County, first appeared on the district's radar in 1939, when Met was building the massive Colorado River Aqueduct. When the aqueduct, which diverts river water to Southern California, first came online, water filled the basin – and then disappeared. At the time, engineers theorized that the water had seeped into a vast underground aquifer, where the district might store water someday.The agency largely ignored the site, which it owns, until the late 1990s, when the federal government demanded that California reduce its use of Colorado River water. For decades, California had been allowed to use more than its legal share of the water, but population explosions in Nevada and Arizona necessitated an immediate cutback.That's when Met turned to Hayfield. District officials thought it would make a good place to store excess Colorado water during wet years. The agency's then-chairman, Phillip J. Pace, called Hayfield a project of "great potential."Around the same time, Met also considered a second project roughly 60 miles north in the Cadiz Valley of San Bernardino County, where private interests also believed a huge supply of water pooled below the surface.But critics raised concerns about the project's impact on the Mojave Desert and about the political connections of the businessman who proposed it. Environmentalists urged the district to abandon Cadiz and pursue Hayfield if it needed groundwater storage...In October 2002, the Met board voted to abandon Cadiz because of political, economic and environmental concerns.But The Register could find no evidence that district staff ever told the public, the state or even its own board members that the water at Hayfield was contaminated with uranium...Public relations and radioactive wasteBy the time the board voted to drop the Cadiz project in 2002, district staff had known for two years that there were problems at Hayfield.Internal district correspondence obtained by The Register show that the staff discussed problems with bromide in the water in 2000. Bromide is a problem in drinking water because, under certain conditions, it can form carcinogenic compounds. The water also contained nitrate, the memo says. Nitrate can cause the life-threatening "blue baby syndrome" in infants.However, "Uranium is the biggest problem," says the May 11, 2000, memo. "Uranium can be removed with ion exchange, but it will create a hazardous waste problem."The contamination stems from naturally occurring uranium in the soil, district officials said.Still on the listAn extended drought along the Colorado River ensured there was little excess water to percolate into the ground basin and the board postponed the Hayfield project in 2004. Hayfield water has never entered the agency's water system.But in August, agency staff mentioned Hayfield when it updated board members on water supplies available for 2009. The Aug. 18 report said staff is "currently in the preliminary design phase" for Hayfield and that "Final design and a request for funding for the Hayfield project will be the subject of an upcoming board letter in the near future." The board will consider that request Tuesday. Staff has indicated that if it were approved, Hayfield could start providing water by next year.BloombergWal-Mart Pays Fine on Clean Air Violation Claim (Update3) ...Amy Eagleburger...10-9-08http://www.bloomberg.com/apps/news?pid=20601103&sid=agOmIa46Qqq0&refer=usWal-Mart Stores Inc. will pay $199,000 to settle the U.S. Environmental Protection Agency's claim that the retailer violated clean air rules by selling ``Glow-in-the-Dark Looney String.'' Wal-Mart, which had a net income of $12.7 billion for the year that ended Jan. 31, sold so-called party string products imported from Taiwan that contained R22, a banned ozone-depleting chemical used to eject plastic string from the can several feet in the air. Such products violate the Clean Air Act. The EPA started its investigation in 2005. The cans, bought at a Wal-Mart store in late 2005 and early 2006, tested positive for the banned chemicals, the EPA said today. Wal-Mart said it sold about 475,000 cans of the product between August 2005 and January 2007. The EPA did not name the Taiwanese manufacturer. The retailer pulled the products when alerted to the problem by the EPA in January 2007, and conducted an internal review to insure compliance with the Clean Air Act, Wal-Mart spokesman Greg Rossiter said in a telephone interview. ``Our purchase agreement with the supplier for that product prohibited the inclusion of banned substances,'' Rossiter said. ``We are no longer doing business with that supplier.'' In 2006, the EPA persuaded Target Corp. and four other retailers to pull all illegally imported confetti-string products from their shelves. Wal-Mart, based in Bentonville, Arkansas, fell $3.16, or 5.8 percent, to $51.39 at 4:15 p.m. in New York Stock Exchange composite trading as the broader market tumbled. The shares have gained 8.1 percent this year. New York TimesStocks Swing Wildly in Chaotic Trading...Graham Bowley and David Jolly http://www.nytimes.com/2008/10/11/business/11markets.html?hp=&pagewanted=printOn Friday, in the last hour, the markets tried to fight their way back. For the day, the Dow swung of more than 1,000 points. The market fell 694 points in morning trading and spend the rest of the day in negative territory. But in the last hour of trading — a period when the markets had swooned in the past — the Dow rose almost 300 points. Briefly. With 15 minutes left in the day, the Dow Jones industrial average was up about 60 points. The broader Standard & Poor’s 500-stock index 0.27 percent higher. Another day, another series of violent swings in a week that has seen large sell-offs in the last hour of the trading day. The volatility came amid unrelenting pessimism about the health of the global economy and world governments’ ability to solve the global financial crisis.“People are scared,” Howard Silverblatt, senior index analyst at Standard & Poor’s, said. “Nobody believes what is coming out of the mouths of politicians, chief executives.”President Bush sought to reassure the American people, and by extension the markets. “My fellow citizens, we can solve this crisis, and we will,” Mr. Bush said Friday in a statement at the White House as central bankers and finance ministers from the world’s richest countries gathered for talks in Washington.They were meeting to discuss new measures, including the injection of government money into banks in return for ownership stakes. Mr. Bush was to meet with finance ministers from Britain, Italy, Germany, France, Canada and Japan on Saturday.In his statement, Mr. Bush said the federal government has “immense resources and a wide range of tools” to combat the crisis, and will use them aggressively. He reiterated his belief in the recently enacted $700 billion financial rescue program and said that government officials were working with their counterparts in other nations to ease a crisis that is truly global.“We’re in this together, and we’ll come through this together,” Mr. Bush said, addressing the people of the world as well as those of the United States. Speaking to Americans, the president said they “can be confident in our economic future” because they, like the nation’s economy, are “innovative, industrious and resilient.”Although the president said nothing new in terms of policies or proposals, his remarks in the White House Rose Garden were nevertheless remarkable, reflecting how rapidly financial events have moved on and the extent to which worries in the United States reverberate around the world, and vice versa. “It is a must for the G-7 countries, especially the U.S., to make a firm commitment to public fund injections for recapitalization of banks in trouble, in order to see the stock market pull out of the doldrums,” Hideyuki Suzuki, an analyst at Morningstar Japan told Reuters. “If the G-7 nations failed to do so, its raison d’être will be called into question for sure.” So far, efforts by the various governments to help restore confidence in the financial system have failed to open the credit markets, the short-term financing that businesses depend on to finance their daily operations. “We are fighting really dire fundamentals,” said Gerhard Schwarz, an equity strategist at UniCredit in Munich. “It will require restoring trust and confidence before a sustained rebound will be possible.”Up until Thursday, the S.& P. had fallen for six successive days by more than 1 percent. According to Mr. Silverblatt, the last time that happened was in 1931, and it has never fallen by more than a percent for seven successive days. In the credit market, investors and banks remained reluctant to lend money to one another for more than one day at a time. Commercial paper, a short-term i.o.u. used by corporations, was 4.7 percent for three-month loans, little changed from Thursday. The rates on overnight loans, however, fell to 1.8 percent, from 2.4 percent.The amount of commercial paper outstanding fell 3.5 percent, to $1.55 trillion, for the week ended on Wednesday, according to the Federal Reserve. Since August, the amount of that debt has declined almost 14 percent.At the same time, investors sought safety in Treasury bills, driving down the yield on one-month and three-month government debt to nearly zero, meaning that investor were willing to accept no return for the assurance of buying debt backed by the federal government.But the price of longer-term Treasuries fell and yields, which move in the opposite direction of prices, shot up. The 10-year Treasury note yielded 3.87 percent in the early afternoon, up from 3.79 percent on Thursday. The move may reflect an announcement earlier in the week that the Treasury would issue more debt in the coming weeks.The major exchanges in Europe and Asia also declined Friday, adding new urgency to efforts to find a solution to the global financial problems and restore confidence in the markets. European markets fell more than 10 percent at the opening, and stayed lower. In London, the FTSE 100 index was down 8.8 percent. In Paris, the CAC-40 was about 7.7 percent lower, and the DAX in Frankfurt was down about 7 percent...CNN MoneyCiti ends talks with Wells Fargo over WachoviaCitigroup says it won't move to block Wells Fargo's proposed purchase of Wachovia but adds that it will seek damages for breach of contract...Kenneth Masantehttp://money.cnn.com/2008/10/09/news/companies/citigroup_wachovia/index.htm?postversion=2008100920NEW YORK (CNNMoney.com) -- Banking giant Citigroup said Thursday it had ended talks with Wells Fargo about reaching an agreement to acquire parts of the struggling bank Wachovia and is no longer looking to buy any of Wachovia's assets.Citigroup also said that it would not seek to block the merger agreement between Wells Fargo and Wachovia but that it would still seek damages from the two banks for breach of contract.Wells Fargo has submitted an application to the Federal Reserve Board seeking expedited approval of its merger with Wachovia, the company in a joint statement with Wachovia.Citigroup, Inc. (C, Fortune 500) and Wells Fargo & Co. (WFC, Fortune 500) have been competing to purchase all or part of Wachovia (WB, Fortune 500) for the past week.Citigroup announced on Sept. 29 that it was taking over Wachovia's banking operations for $2.2 billion with backing from the Federal Deposit Insurance Corp. However, Wells Fargo offered just four days later to buy Wachovia outright for $15.1 billion with no federal assistance whatsoever.Citigroup first tried to stop the Wells Fargo deal in court last weekend and subsequently decided to seek up to $60 billion in punitive and compensatory damages. Wachovia, meanwhile, also sought in court to keep Citigroup from blocking the deal with Wells Fargo.The three banks agreed on Monday to halt any legal action until Wednesday to allow room for negotiation. On Wednesday, they extended this legal standstill until Friday.However, Citigroup said in its statement Thursday that the two companies' acquisition plans were too different to come to a mutually acceptable agreement."We did not seek the Wachovia transaction; Wachovia brought it to us," said Citigroup CEO Vikram Pandit in a statement. "We will redouble the focus on our five core businesses."After Citi said it wouldn't attempt to block the rival merger, the Federal Reserve said in a statement that it would start the regulatory approval process needed for Wells Fargo to buy Wachovia."We are delighted to stride ahead with Wells Fargo in creating a coast-to-coast financial institution -- one of the strongest financial firms in the world," said Wachovia Corporation President and CEO Robert K. Steel in a statement.Homebuyers balk amid Wall Street meltdownAs the financial crisis intensifies, the few homebuyers that are out there are reconsidering a purchase...Les Christiehttp://money.cnn.com/2008/10/08/real_estate/financial_crisis_pulling_out_of_home_sales/index.htm?postversion=2008101014NEW YORK (CNNMoney.com) -- The Dow has shed thousands of points and the global economy is in crisis. So who wants to buys a house right now? Not many people as it turns out.The National Association of Home Builders (NAHB) for instance has seen its contract cancellations spike recently to as high as 30%, compared with an average rate of about 20%. During the housing boom, as few as 5% of sales were cancelled."The events of the past couple of weeks have people's heads spinning," said Steve Melman, NAHB's director of economic surveys.The National Association of Realtors (NAR) estimates that about 25% of the clients its members are working with are staying on the sidelines. They're looking at homes and intend to buy at some point, but right now they're worried about their jobs, their declining investments and falling housing prices. "You have to have a lot of confidence to make this kind of big-ticket purchase in the current environment," said NAR spokesman Walter Molony. Real estate agent Bob Rose was helping one couple look for an investment property in battered Contre Costa County, hoping to find a bargain that they could sell in a few years. Then, on September 29 the Dow dove nearly 800 points and the couple decided not to buy. "They told me they had lost about a quarter of their retirement portfolio," said Rose, and that they could no longer afford it. Even some buyers who are already in contract are managing to pull out of sales amidst all the economic turmoil.Deal or no dealTwo weeks ago, one Washington state couple, Sharif Tai and Gaby Ghafari, went into contract on a new $450,000, three bed, three bath, house in central Seattle. Soon afterwards, the stock market began its steep descent. "It wasn't that we lost money [in the market] or that we were worried about our jobs," said Tai, a software developer in his mid-20s, "but we thought we could get a better deal, so we decided to wait."The couple backed out of the deal by citing problems with the inspection, but they haven't given up on making a purchase."We're keeping our eyes out," said Tai. "We want to see how things shake out. If we see a great deal, we'll take it."Other buyers are demanding sweeteners before they close a deal during such a rocky time. San Francisco agent Jim Holt had clients go into contract on September 29, on a $750,000 home in town. But by the end of the week the Dow had lost over 800 points and the buyer demanded a whopping $50,000 price cut."Buyers are seeing the [market implosion] as an opportunity to get concessions," said Holt. In the end, the seller only agreed to reduce the price by $5,000 - but that's better than nothing.Other house hunters are managing to wring more concessions out of sellers even on top of existing discounts.Rich Machado, an agent with the Smart Homebuyer Team in New Bedford Westport Mass., had already helped one buyer get a seller to take $9,000 off the price of a house listed for $229,000, and throw in $6,000 in closing costs, $1,800 for an electric upgrade and $400 for a home service contract. The deal went into contract two weeks ago, but despite that impressive array of incentives, "the buyer is balking," said Machado. "He's asking for another $10,000 off the price."The seller hasn't caved in yet - but with demand drying up, he may be forced to come around.As the losses mount on Wall Street - the Dow lost 678 points on Thursday alone - things will undoubtedly become even more difficult for sellers."In the midst of such chaos, everyone is just shaking their heads," said NAHB's Melman." Financial TimesOverview: Stock markets crash as financial crisis deepens...Anuj Gangaharhttp://www.ft.com/cms/s/0/09e7cba6-96f4-11dd-8cc4-000077b07658.htmlPanic selling prompted a crash in global equities this week, sweeping many stock markets to their steepest ever falls as investors ignored efforts by governments and central banks to restore calm.European shares had their worst week in history, falling 22 per cent, and Wall Street was on course for its biggest drop. The FTSE 100 suffered its second biggest weekly fall in percentage terms - down 21 per cent - second only to the crash of October 1987.Large-scale deleveraging by hedge funds and fears that the crisis originating in the credit markets would push the global economy into a deep recession helped drive stocks lower.The falls came in spite of a co-ordinated rate cut by six central banks, the unveiling of a bold government rescue plan for UK banks, and a move by the US Federal Reserve to lend directly to borrowers in the commercial paper market.Equities plummeted with the S&P 500 down 21.9 per cent over the week by mid-day yesterday in a week in which every trading session dragged stocks lower. Morgan Stanley and Goldman Sachs were among the heaviest fallers on Friday. Volatility as measured by the Chicago Board Options Exchange Vix index, known as Wall Street’s fear gauge, jumped above the 70 mark for the first time.Howard Wheeldon, senior strategist at BGC Partners, said: “Sadly it is now impossible to call the bottom of this market rout. Irrational fear has gripped and it seems that markets will now trash almost anything that walks.“What started as an asset based crisis is running into the realms of the worst financial crisis the world has ever seen.”The crisis in financial markets is spreading rapidly into the real economy, with the troubled car sector in sharp focus as investors weighed up the potential of a severe recession. Analysts see GM and Ford as a barometer for the manufacturing sector but also for public and political sentiment.Mr Wheeldon said: “If these companies are now in serious trouble then so are the rest and it says that we are now not just talking recession. The negative message is not helped by more rating agency downgrades.”...