Merced Sun-Star
Lender forecloses on Riverside Motorsports Park's track land
1,200 acres adjacent to Castle now in default...CORINNE REILLY
The property where Riverside Motorsports Park says it plans to build a massive racetrack complex has fallen into foreclosure.
A notice of default recorded last month shows RMP owes at least $13.4 million on the 1,200-acre property, located near Atwater. RMP's $12.5 million mortgage loan with First Bank in Missouri has matured, and the company has failed to pay it off, according to the notice.
RMP listed the property for sale in September for $16.5 million. The asking price now stands at $15.5 million.
Even since the default notice was issued, RMP has continued to insist it's moving forward with plans to build a multitrack racing complex near Castle Airport.
In a development update posted on its Web site earlier this month, RMP said it is still working on a daily basis to make the project a reality.
Those claims come despite several recent developments that suggest the project is dead, including evidence that RMP is broke and legal moves by the company's creditors to seize its assets.
The posting says nothing about the notice of default and makes no attempt to reconcile the seeming incongruity between the pending foreclosure and RMP's claim that it is pressing on.
The update also includes no mention of a recent judgment against RMP that entitles Merced County to seize any assets it can find in the company's name, up to $300,000; that's how much RMP now owes Merced County for unpaid bills.
RMP's CEO, John Condren, didn't return phone calls seeking comment. The Sun-Star attempted to reach him by calling a phone number listed on the Web site for what appears to be a new Condren venture, a revived marketing company called HarperCondren Marketing.
He runs the company with his wife, according to the Web site, harpercondren.com. Among the past clients HarperCondren lists on its site are Riverside Motorsports Park and other companies Condren has started.
Condren first proposed plans in 2003 for what he billed as the world's largest motorsports facility. He argued at the time that RMP would remake the county's struggling economy.
The project's initial blueprints called for a quarter-billion-dollar, eight-racetrack motorsports park that would include shopping areas, a lake, restaurants and picnic space.
The Board of Supervisors approved RMP's proposal in 2006, but the project never broke ground. It was stripped of its approvals early last year after RMP lost a lawsuit filed against the project by environmental groups.
Over the past two years the Sun-Star has published several stories calling into question Condren's credibility and poking holes in RMP's claims that its project was on a sure path to fruition.
Instead, RMP's property has joined thousands of others on the county's foreclosure rolls.
Read RMP Foreclosure Notice...Recorded 1-23-09
Modesto Bee
January existing home sales fall by 5.3 percent...ALAN ZIBELAP Real Estate Writer
A real estate group says sales of existing homes took an unexpected plunge from December to January, falling to the lowest level in nearly 12 years as buyers waited for the government to boost the U.S housing market.
The National Association of Realtors said Wednesday that sales of existing homes fell 5.3 percent to an annual rate of 4.49 million last month, from 4.74 million units in December. It was the weakest showing since July 1997.
Sales had been expected to rise to an annual pace of 4.79 million units, according to Thomson Reuters.
The median sales price plunged to $170,300, down 14.8 percent from $199,800 a year earlier. That was the lowest price since March 2003 and the second-largest drop on record.
Fresno Bee
Spending bill nixes Bush endangered species rules...DINA CAPPIELLO,Associated Press Writer
WASHINGTON The $410 billion House spending bill designed to keep the government afloat through the rest of the budget year could sink two Bush administration rules that eased protections for endangered species.
Tucked into the proposal put forward by House Democrats is a provision that would allow the interior secretary and commerce secretary to withdraw Bush administration regulations that reduce the input of federal scientists in endangered species decisions and block the law from being used to fight global warming.
In December, the Bush administration finalized regulations that allow agencies to decide for themselves whether highways, dams, mines and other construction projects might harm endangered animals and plants.
The rule reduces the mandatory, independent reviews government scientists have performed for 35 years. It also prohibits federal agencies from assessing a project's contribution to global warming when they evaluate its effect on species.
The other regulation targeted in the spending bill deals with the polar bear. When the Bush administration determined last May that the survival of the bear was threatened by climate change, it included a special rule that allowed oil and gas drilling to continue without increased protections.
President Barack Obama has said he would seek to reverse the rule limiting the input of scientific experts, which would require a lengthy rulemaking process. House Democratic leaders were already pursuing another avenue to block the regulation - tapping a law that would stop the rule from taking effect.
Republicans on Tuesday called for the provision to be removed.
"This is a backdoor maneuver to create vast new climate change powers without any public comment or involvement of the American people," said Rep. Doc Hastings of Washington, ranking member of the House Natural Resources Committee.
The bill is expected to come the House floor for a vote on Wednesday. 
Sacramento Bee
El Dorado construction raises questions, concerns over asbestos...Chris Bowman
In El Dorado Hills' upscale Serrano community, a proposal to build 135 homes on a ridge bearing asbestos veins has raised neighborhood opposition along with difficult questions about the health risks of living near the fibrous minerals. Here's a primer on what scientists know – or don't know.
Does living in an area known to contain asbestos deposits increase the risk of lung disease?
Not necessarily. Locked in the Earth, the minerals pose no danger. But blasting, drilling, earth-moving and grading can disperse the minerals' fibers, especially in dry soil. The potential risk increases with the duration and intensity of exposure to the breathable fibers.
Why worry about asbestos in El Dorado Hills, when the fibers are known to be present in the air practically everywhere – the result of natural weathering and its widespread use in automotive brakes?
Western El Dorado County probably has more home and road construction churning up asbestos near residents than any other area of California, according to U.S. Environmental Protection Agency officials. Excavation work and even recreational activity in fields and trails with asbestos-containing soil can significantly increase an individual's exposure above the normal levels in the air, EPA studies show.
Can't the inhaled fibers be coughed up like dust?
Certain asbestos fibers can bypass the defenses and lodge deep into the lungs for life to cause cancer. Areas within and near the proposed Serrano development contain a type of asbestos called amphibole that is far less likely to dissolve in the lungs over time than the more common, commercially used chrysotile asbestos.
Doesn't it take years of asbestos exposure to develop lung disease?
Not necessarily for amphibole asbestos. Brief, episodic exposures – weeks, not years – are enough to trigger lung disease decades later. The "biopersistence" of these fibers is one of the characteristics that make them at least 100 times more potent than the commercial variety in causing mesothelioma, an inoperable and almost always fatal cancer of the membranes lining the chest and other body cavities.
Has anyone died or gotten sick from breathing asbestos released from construction activity in the El Dorado Hills area?
Health experts don't know. No one has studied it. The California Cancer Registry, which tracks cancer deaths, can't tell where or how a victim was exposed. Further, it typically takes 20 to 30 years from the time of initial exposure for mesothelioma to take hold. Victims who had moved away during that long latency would not be included in the county statistics.
Will the county-required asbestos dust controls adequately protect residents near construction sites?
No one has studied the question, according to Jack Momperler, an air pollution officials who enforces the asbestos controls at work sites in Sacramento County. The primary control – watering the site – has proved effective in demolition of old buildings that contain asbestos fireproofing and insulation, he said. But, unlike the hollow chrysotile fibers in building materials, the amphibole asbestos does not absorb water – so spraying would be less effective, Momperler said.
American pika wins round against U.S. Fish and Wildlife...Denny Walsh
The furry little American pika has chalked up a significant victory in Sacramento federal court.
To settle a lawsuit, the U.S. Fish and Wildlife Service has finally agreed to consider listing it as endangered or threatened under the Endangered Species Act. In an order filed Tuesday, U.S. District Judge Frank C. Damrell Jr. approved the terms of the service's settlement agreement with the Center for Biological Diversity, a nonprofit corporation active in species and habitat protection in the Western states.
On Oct. 1, 2007, the center petitioned the secretary of the service's umbrella agency, the Department of Interior, to protect the pika with a listing, but got no response. The center then challenged that silence with a suit filed Aug. 19.
Fish and Wildlife has agreed to decide by May 1 whether the center presented information indicating a listing may be warranted. If that decision favors the pika, the service will undertake an intensive review of the scientific evidence and decide by February 2010 whether the pika deserves endangered- species protection. If the pika prevails at that stage, Fish and Wildlife will publish a proposed listing, which will be open to comment for a year. A final decision would then be made in February 2011.
The federal defendants will pay the center's lawyers – Deborah Reames, Gregory Loarie and Wendy Park of Oakland-based Earthjustice – $27,534 in attorneys' fees and costs.
The center contends the pika, a relative of rabbits and hares, is at serious risk of extinction from global warming.
Thick fur and a high metabolism allow pikas to remain active year-round in the icy rubble atop the West's highest peaks, but these same attributes leave them extremely vulnerable to heatstroke at temperatures near or above 80 degrees, according to scientific data gathered by the center.
"Human-induced global warming has already rendered uninhabitable large tracts of the pika's historic range, and if current trends continue the species may well become extinct in the foreseeable future," the center's lawsuit claimed.
Still pending, Loarie said in an interview, is a suit in San Francisco Superior Court challenging a rejection by state wildlife officials of a bid to protect the pika under the California Endangered Species Act. The officials cited inadequate evidence the pika is imperiled.
The fist-sized creature is the first species for which protection was sought under the state's law because of climate change.
Stockton Record
Home prices continue to plummet
S.J. County prices fell to $165,000 in 2008, down 46.8%...Staff and wire reports
Home prices tumbled by the worst annual rate on record in the fourth quarter, two housing indexes showed Tuesday, and the slope of decline steepened in all but a handful of battered cities.
Nationally, home prices have receded to 2003 levels, and half of the metro areas in the 20-city Case-Shiller Home Price Index have lost more than 20 percent of their values from their peaks in 2006, including Las Vegas, Phoenix and Miami.
The Case-Shiller index plunged more than 18 percent during the quarter from the prior-year period, the largest drop in its 21-year history.
Meanwhile, the Federal Housing Finance Agency said Tuesday that home prices dropped more than 8 percent in the quarter from a year earlier, its largest annual decline since records were first kept, in 1991.
The reports, however, did offer a modicum of good news. The rate of year-over-year price declines slowed in Boston, Denver, Los Angeles, San Diego and Washington, according to the Case-Shiller index. But the government index showed many California and Florida cities clocked their worst declines in the fourth quarter.
Stockton was not among the 20 metro areas cited in the Case-Shiller index.
In the Federal Housing Finance Agency's index, the metropolitan areas with the sharpest depreciation over the year were Merced, with a 49.5 percent drop; Stockton, with a 40.2 percent drop; and Modesto, with a 37.8 percent decline.
According to figures from Grupe Real Estate-Trendgraphix monthly sales reports, based on Multiple Listing Service data, the median sales price for an existing single-family home in San Joaquin County plummeted from $310,000 in December 2007 to $165,000 last December, a 46.8 percent plunge.
Prices fell even further last month, to $154,000 countywide, leaving some real estate brokers to wonder how much more prices could drop.
The local new-home market slowed dramatically as low-priced foreclosure properties accounted for most sales last year and sent existing-home sales to record heights.
Last year was tough for home builders, with one new home selling in San Joaquin and Stanislaus counties for every four that sold in 2005 - before the housing downturn seriously set in.
The Gregory Group, a real estate information and consulting service in Folsom, reported that 1,080 single-family houses were sold last year in the two counties, down from 2,207 in 2007 - and way down from 3,823 in 2005.
That slowdown took down selling prices with it.
The average selling price for a new home in the two-county area in the fourth quarter of 2007 stood at just under $457,000. That shrank by 21 percent, to $361,011, in the last quarter of 2008.
That has meant homes are more affordable.
A recent National Association of Home Builders/Wells Fargo Housing Opportunity Index indicated that Stockton had jumped way up in the ranks of affordability among 220 metro areas surveyed across the country. The index measures the ability of residents earning the area's median income to buy a home.
The Stockton metro area ranked 118th in the fourth quarter of last year, up sharply from 198th in the fourth quarter of 2007.
"It's best of times and worst of times for individuals," said Ben Balsbaugh, residential sales manager for PMZ Real Estate in Stockton. "The drop in prices is a reflection of the suffering of many who owned homes and are now under water."
At the same time, though, about 3 percent of the area's population could afford to buy a home a few years ago, compared with about 70 percent now because of falling prices, he said.
Prices in the Case-Shiller 20-city index have plunged 27 percent from their peak in the summer of 2006, and the 10-city index has fallen more than 28 percent. Both indices have recorded year-over-year declines for 24 straight months.
Today, the National Association of Realtors is scheduled to release its existing-home sales data for January, and the Commerce Department releases its new-home sales figures for January on Thursday.
Stockton flood maps only add to FEMA's sagging reputation...Michael Fitzgerald
I try to make sense of things. But when it comes to the feds and floods I am tempted to run up the white flag.
I refer to declaring much of Stockton a flood plain and charging residents of this unlucky zone painfully high insurance.
Yes, Stocktonians live where it floods. We used to have blind faith in levees and engineered solutions. Katrina destroyed those illusions. I get that.
Our illusions have been replaced by science, supposedly. Uncle Sam publishes flood maps, remarkable maps showing floods that haven't happened yet, but likely will.
To the science, add a more rational risk management policy. People who choose to live in flood zones must pay flood insurance. In principle I agree.
Sure, the cost hurts - heard the phrase "Ground Zero," Uncle Sam? - but expecting others to perpetually bail out nincompoops who live on a flood plain is unfair.
Right? After all, we are not expected to perpetually bail out thirsty imbeciles who chose to live in a desert. Wait, we are. And the Delta is dying because of it.
But far from imposing costs to mitigate astoundingly bad sprawl in a semiarid region, Uncle Sam actually helped build a system that delivers Delta water to Los Angeles.
Us, they tax. Them, they subsidize - with our dollars. Us, they de-water and degrade. Them, they irrigate and green. OK, I'm a tad bitter about this.
Anyway, the prevailing principal is not apportioning to each region a fair share of the cost of the risk residents assume by living where they do.
It is making Delta-dwelling nincompoops assume a share of risk while subordinating them to the needs of Angeleno imbeciles who choose to live in a desert.
That slams an economically depressed region with new costs while subsidizing a more affluent region. As social justice, that's bass ackwards.
But, hey, at least it's a double standard based on good science. Right?
Apparently not. The feds used sloppy methods to delineate flood zones. No laser elevation surveys, etc. They used old contour maps. Maps 10 times less exact, it was reported.
Also, they didn't establish base flood elevations. Hmm. They issued flood zone maps without knowing where it will flood. And yet I still question authority.
To me, the maps aren't rigorous flood zone maps; they are merely accurate insurance zone maps. Insurers are grateful, no doubt. They're licking their chops.
To recap: Uncle Sam may be applying a double standard, but at least his method is dubious.
There's more. In Stockton, there always is.
The feds declared midtown a flood plain largely because of Smith Canal. Not because calm Smith Canal has volatile waters, spongy levees or a history of flooding.
No, because Smith Canal residents built homes and docks on and around the levees. The feds can't inspect the levees to their satisfaction. They can't "certify" them.
They can land probes on Mars that analyze the soil 36 million miles away. But they can't figure out how to inspect those darned Smith Canal levees.
Smith Canal residents attest Smith Canal has not flooded in living memory. Yet the feds assume the area could flood in, say, a 100-year flood. Or a 200-year flood.
It may be so. Then again, what to make of the 100/200-year flood, these tables of a century's worst probable rains that form the basis of Uncle Sam's analysis?
Stockton, being founded about 1847, has not been around 200 years. How do these gurus calculate the probability of a 200-year flood?
Did the Yokuts hand the pioneers centuries of meteorological data?
Even if accurate 500-year rainfall records existed, they'd be of uncertain value. Climate change is rendering old flood projections obsolete.
"...(FEMA hires) engineers and consultants to use the best data they have to make that call," a Public Works administrator was quoted explaining (or rationalizing). "Sometimes they're interpolating because they don't have details."
"Interpolating" - inserting educated guesswork. The inaccurate method imposes painful costs on people who may not deserve them. FEMA's supposed to help victims, not create them.
Manteca Bulletin
Senator Wolk: Protect Delta as a place
SACRAMENTO — Senator Lois Wolk (D-Davis) in a Senate Natural Resources and Water Committee hearing called for the elevation of a goal to protect the Delta as a place.
The hearing was reviewing the Delta Vision Blue Ribbon Task Force report that calls for achieving the two goals of restoring and preserving the Delta ecosystem and ensuring water supply reliability.
“When saving the Delta, don’t forget the Delta. Don’t forget the place you are trying to save,” Wolk said. “There are people, communities, an economy, recreation, wildlife, history, transportation, economic infrastructure, and more that must be considered in our decisions about the Delta’s future.”
Senator Wolk urged that the state’s approach for the Delta must have three equal goals:
•Protecting the Delta as a place
•Restoring and preserving of the Delta ecosystem
•Ensuring water supply reliability
Representatives from San Joaquin and Yolo counties, as well as conservation groups supported the importance of including the perspectives of Delta communities’ when making decisions for the Delta.
Last month, Wolk chastised the Schwarzenegger administration’s recommendations for the Delta, which supported construction of a peripheral canal around the Sacramento-San Joaquin Delta without legislative or voter approval and omitted the issue of a Delta steward, which was key to the recommendations of an independent task force to the administration.
Wolk, who represents the majority of the Delta, was the first woman to chair the Assembly Water, Parks and Wildlife Committee and used her four-year chairmanship to bring heightened attention to important topics including the crisis in the Sacramento-San Joaquin Delta.
Contra Costa Times
Richmond sewer spills nearly 1 million gallons into Bay...Mike Taugher
Signs were posted at several shorelines and parks in Richmond warning that water might be contaminated with harmful bacteria after nearly 1 million gallons of runoff and raw sewage overflowed and spilled into the Bay.
Sunday's rainstorm flooded into cracks and leaks in the city's sewer collection system and overwhelmed the capacity of a sewage treatment plant, causing an estimated 890,000 gallons of untreated water to spill out of the sewer system near the Richmond marina.
The company that runs Richmond's sewer system estimated that the water was 90 percent stormwater and 10 percent raw sewage, a figure that state water quality regulators did not dispute.
Keller Beach, Brickyard Cove, Miller/Knox Regional Shoreline, Sheridan Point, Vincent Park, Shimada Friendship Park, and Point Isabel were all posted with the warnings, said Sherman Quinlan, Contra Costa County's director of environmental health.
Quinlan added that the sewage was highly diluted by rain and water in the Bay and probably does not pose much of a health threat.
"I strongly believe the impact is minimal," Quinlan said.
The warnings are expected to be lifted after test results show safe levels of bacteria. The first test results were expected back late Tuesday.
Sewage spills during heavy rain are common in much of the Bay Area. Old, leaky pipes take in more rainwater than the systems can handle.
The company that operates Richmond's sewer system
Santa Cruz Sentinel
Progressives ask Santa Cruz to limit UC Santa Cruz water...Genevieve Bookwalter
SANTA CRUZ -- What started as a discussion on how to ration water during a drought Tuesday turned into a tense discussion between the City Council and progressives over details of an agreement signed last year on how UC Santa Cruz will grow.
Leading the charge was former county Supervisor Gary Patton, who represented Santa Cruz on the Board of Supervisors for two decades. Known for his strong anti-development stance, Patton spoke as the attorney for a newly formed group, The Community Water Coalition, against the city's role in helping the university go through the bureaucracy needed to expand.
"Everyone would feel better if the city was, in fact, neutral," said Patton, as others in the group said the city should reopen the agreement and tell the university that, with a pending drought, the campus could not have as much water as originally promised.
The conversation came up as council members heard a newly finished plan dictating how water conservation and rationing would work in case of a severe drought.
The study illustrated how the 90,000 people who depend on district water will be asked to cut back if the county receives less water than normal. City leaders approved the first reading of the plan, which is required by the state. However, the document could come in handy this year, with rainfall at 79 percent of normal.
The UCSC agreement at issue was signed last year and settled numerous lawsuits between the city and university arguing
ESPN Outdoors
Looks like California could be salmonless again...James Swan
In 2002, 800,000 Chinook salmon passed through San Francisco Bay and up the Sacramento River to their ancestral spawning grounds in the Upper Sacramento and its tributaries. Those were the "good old days" for party boats out of the Bay, plying the ocean. Limits around with big lugs to 40, even 50 pounds as the rule, not the exception. Same for guides fishing the big river.
The Kenai River may have some bigger Kings, up to 90 lbs. and more. And the Columbia and Fraser Rivers certainly have decent runs, but historically the Chinook salmon run up the Sacramento River has been the largest on the West Coast, and that has meant big business for commercial fishermen, restaurants, party boats in the ocean, guides along the Sacramento and Feather Rivers, and sport fishermen, as well as a lot of prime salmon on the table.
In 2007, only 80,000 Chinooks made their final run up the Sacramento River. As a result, the Fall Run of Chinooks, which has always been the biggest, in April, 2008 was declared off-limits to fishermen by the Pacific Fisheries Management Council — no fishing in the ocean or the Sacramento River and tributaries — with only a Winter Run fishery in the river for about a month remaining. Silver salmon fishing had already been banned and sockeyes and pinks don't get down this far south, so in effect there was virtually no salmon fishery in California last year, except for the Klamath River run. And that meant thousands of people out of work and several hundred million dollars in lost income.
According to a meeting between National Marine Fisheries and a coalition of stakeholder groups held last week in Sacramento between National Marine Fisheries and a coalition of stakeholder groups, it's likely that there will be no ocean or fall run salmon fishery this year, also. According to Pro-Troll tackle manufacturer Dick Pool, from Water4Fish, "The primary indicator of catchable salmon in the ocean is the number of 2 year-old jacks that return to the rivers. The jack count in 2008 was at or near an all time low. This means the numbers of mature fish that will return in 2009 will be very low."
Pool is predicting there will be no season this year, but that decision is yet to be made as it rests with the California Fish and Game Commission and National Marine Fisheries. However, it looks like Pool's forecast will be right. On February 18, the Pacific Fishery Management Council reported that last year only 66,264 natural and hatchery adult fall chinook salmon were estimated to have returned to the Sacramento River basin for spawning.
When the bad news came out last spring, fingers were pointing everywhere to look for reasons for the rapid decline in salmon. Some immediately said it was more example of global warming. Global warming may be a factor in salmon populations, but for such a dramatic decline in five years, it would signal that in five more we should all be frying in triple-digit winters. And beside, the Columbia River and Klamath River runs seem to be doing quite well. (Incidentally, it's in the 30's today on the Coast, with a snow level at 2000' and the road to Tahoe has been blocked most of the day by snow and ice.)
Warming is involved in the sorry state of the Sacramento salmon, but it's not the ocean waters so much as those in the river. It's the summer water temperatures upstream in the Sacramento River and in the tributaries, which NMF says is a major problem. Warmer water, associated with dams, water diversions, and drought conditions for the last several years, is killing off eggs and small fish, killing off 10% of the eggs.
But that's just the beginning. An even bigger factor for the young fish in the Upper Sacramento is decreased water levels, stress passing through dams, and increased predation, which collectively mean that only 20% of the young fish leaving Red Bluff make it to the Delta.
Then when they get to the Delta, pumps, predation and water chemistry kill 65% of the young fish.
According to the report, "Overall, when the Sacramento survival of 20% is combined with the Delta survival of 40%, only 8% of the smolts make it to the West Delta," (which connects with San Pablo Bay and San Francisco Bay).
You also have to factor in a problem for returning spawners, poaching, which because of the game warden shortage in California has become very significant. In 2007 game wardens cited over 400 people for snagging salmon in and around the state capitol, Sacramento. And the wardens believe they are only able to catch about 10% of the violators as California has the worst per capita wardens of any state or Canadian province.
As a result of the studies reported at the meeting, "NMFS currently concludes jeopardy for all salmon species, green sturgeon, and the southern resident killer whale species." In addition, in the San Joaquin River, a tributary of the Sacramento that once had a salmon run approaching 300,000 fish a year, due to low flows and predation, "endangered steelhead survival out of the San Joaquin is near zero." Without drastic measures, the report finds: "there is no question that several runs are now headed to extinction."
Problems with dams, diversions, water temperatures and poaching, have made the future of Sacramento River salmon heavily tied to hatcheries. This increases costs, but it does result in some control that can be helpful to circumvent the gauntlet of problems salmon face currently in the Sacramento River. One strategy that offers some hope is carrying smolts from the hatcheries in tank trucks to holding pens in San Francisco Bay, thus avoiding contact with the Delta, and its hungry stripers and diversion pumps. And then when the young salmon are ready to be released into the wild, they are released in deeper water offshore, which minimizes feeding frenzies by sea birds and seals.
To be a fisherman is to always cultivate hope. With salmon runs, you always have to think 2-3 years ahead of time. Dick Pool observes wistfully, "We are hoping for a 2010 season based on the 23 million smolts that were trucked around the delta in 2008."
To keep abreast of developments in the California salmon struggle, visit the websites for Water4Fish, the California Sportfishing Protection Alliance, and the National Marine Fisheries Pacific Northwest Division. A copy of a recent presentation by NMFS to CAL-FED with many graphic charts and graphs describing the salmon situation in California, can also be viewed online.
New York Times
Foreclosure Sales Continue...Floyd Norris
The existing home sales numbers for January are being interpreted very differently than the December numbers were. A month ago, we heard that the sales rate ticked up and perhaps that was a sign of an improving market. Now we hear the rate hit a new low, and things are horrid again.
Forget it. There is no substantial change in the numbers. In much of the country, sales volume has been slipping steadily. But it is rising in the West, where prices are falling the fastest. I think this means banks have been more aggressive in foreclosure sales there.
The Federal Housing Finance Agency (previously known as OFHEO) home price indexes for the fourth quarter came out this week, and help to explain what is going on. Overall, those indexes have not been down as much as the Case-Shiller indexes, which cover 20 large metropolitan areas. Part of that may be because the F.H.F.A. indexes cover only loans bought by Fannie and Freddie. That excludes jumbo loans, and it excluded some of the dumbest loans made during the boom.
Nonetheless, for some areas, particularly in California’s central valley, the F.H.F.A. numbers are stunningly bad. Here are the 20 (of the 292 that the agency follows) metropolitan areas that went down the most in 2008, and how fourth quarter 2008 prices compare to those in the final months of 2003.
Merced, Calif., -49.50% Five years, -33.34%
Stockton, Calif., -40.19%, -22.56%
Modesto, Calif., -37.78%, -18.98%
Vallejo-Fairfield, Calif., -34.38%, -14.92%
Riverside-San Bernardino-Ontario, Calif., -34.32%, +2.96%
Cape Coral-Fort Myers, Fla., -32.93%, -1.71%
Naples-Marco Island, Fla., -32.87%, +6.85%
Las Vegas-Paradise, Nev. 285 -32.60%, +6.28%
Salinas, Calif., -32.18%, -9.38%
Punta Gorda, Fla., -29.72%, -4.91%
Yuba City, Calif., -29.62%, -7.70%
Bakersfield, Calif., -29.06, +18.27%
Madera-Chowchilla, Calif., -28.61%, +10.82%
Ft. Lauderdale-Pompano Bch.-Deerfield Bch., Fla., -25.95%, +16.61%
Bradenton-Sarasota-Venice, Fla., -25.36%, +6.35%
Fresno, Calif., -25.06%, +11.47%
Miami-Miami Beach-Kendall, Fla., -24.15%, +34.25%
Sacramento-Arden-Arcade-Roseville, Calif.,
-22.09%, -2.85%
Visalia-Porterville, Calif., -21.31%, +29.42%
West Palm Beach-Boca Raton-Boynton Beach, Fla., -21.20%, +17.78%
You can note that in the worst hit areas of California, the average homeowner is underwater even if he or she bought years ago. With the price declines accelerating, it makes sense for banks to dump houses and for homeowners to not try to save them. But in the worst areas in Florida and Nevada, it is more likely that those who bought a few years ago are still above water, and thus under less pressure to sell.
Economic Crisis Complicates California’s Goals on Climate...FELICITY BARRINGER
COLTON, Calif. — Only a few years ago, CalPortland planned on keeping its plant here operating as long as Mount Slover’s limestone held out. For more than a century, Colton’s kilns and crushing machines have been churning out cement for the streets and buildings of Los Angeles.
But the company says the plant’s future is now uncertain. The recession has sent cement prices plunging, lowered profits and forced CalPortland’s drivers to cut back on hours. And the company says it faces new expenses: the cost of meeting California’s new requirements that manufacturers take steps to curb emissions of carbon dioxide, the main heat-trapping gas linked to global warming.
State regulators have projected that retrofitting the state’s 11 cement plants would cost $220 million and reduce carbon dioxide emissions by 12 percent per ton of cement. But CalPortland’s executives say it would cost more than that to retrofit the Colton plant alone.
“We don’t have enough limestone left to invest $200 million,” said James A. Repman, the company’s president.
California was one of the first states to enact legislation to tackle global warming, with legislators passing a 2006 measure to curb carbon dioxide emissions in all economic sectors, including manufacturing, transportation and real estate development. But the state is also providing a lesson in how contentious carrying out such a law can be, especially at a time of economic crisis.
What happens in California — and in other states that have taken steps to reduce emissions — is being closely watched in Washington, where lawmakers will soon debate federal climate legislation. The Obama administration has said it plans to push for a cap-and-trade bill this year.
California’s law, like federal proposals, has stirred intense fighting over whether its benefits outweigh its costs and what those costs will actually turn out to be.
“We’re talking about a transformation of the way of life,” said Greg Freeman, an economist with the Los Angeles Economic Development Commission. “There’s going to be transitional costs. We can’t have the debate about whether the cost is worth paying unless we have a realistic idea of what the cost will be.”
State regulators predicted in an economic analysis last fall that the climate law would create 100,000 jobs in the state and increase per-capita income by $200 annually by 2020. The upfront cost for the first five years after the law takes effect, they estimated, would be $31.4 billion, about $8.5 billion more than the savings in those years. But if carbon-control costs were spread over the lifespan of the new equipment, the $25 billion in annual costs in the year 2020 would be more than offset by $40 billion in savings.
The state’s plan includes a cap-and-trade model, in which polluters would have to either reduce emissions on their own or buy credits from more efficient producers.
At the time of the analysis, Mary D. Nichols, chairwoman of California’s Air Resources Board, called them “good-news numbers.”
But the projections were strongly criticized as unrealistic by the affected industries and by independent economists who reviewed the analysis — including two from the Pew Center on Global Climate Change, which supports the emission reduction goals.
In one withering review, Matthew E. Kahn of the University of California, Los Angeles said the analysis unconvincingly portrayed the law as “a riskless free lunch.” Another economist, Robert N. Stavins of Harvard, said the regulators were “systematically biased” in ways “that lead to potentially severe underestimates of costs.”
Now, with the recession deepening — unemployment in California is 9.3 percent — manufacturers like Mr. Repman say the recession will make carrying out the state’s plan, the first stage of which goes into effect in 2010, even more difficult and could make the economy worse.
Mr. Repman said “2006 was a boom like I’d never seen,” and “2008 was a bust like I’d never seen.”
With profits and Mount Slover’s supply of limestone both dwindling, Mr. Repman said, he cannot justify the expense of upgrading the core of the Colton plant, its coal-burning kilns, where 2,000-degree heat turns limestone into a building block of cement.
If he closes the plant when the new rules take effect, Mr. Repman said, 140 jobs will disappear.
State regulators say new jobs in renewable energy and green technologies, created as a result of the law, will more than make up for the jobs that are lost. And the law’s supporters note that less economic activity means reduced emissions of heat-trapping gases, making the law’s goals — cutting carbon-dioxide emissions to 1990 levels by 2020 — easier to meet.
In an interview, Ms. Nichols, of the air resources board said she thought the study’s cost estimates fell within an acceptable range. The models used, she said, “showed the effect of fully implementing the plan on the California economy is minimal — it could be plus or minus, but it would be minimal.”
She said the critiques by the economists, who were chosen by the state, might have contained some harsh words, but were “very typical of the kinds of things you would see in peer review of an academic study.”
A new group of economists — academics and experts from the business world — is being assembled to guide planners in the next round of decisions about the rules set to take effect next year.
Chris Busch, a climate economist with the Center for Resource Solutions, an environmental group, also defended the Air Board’s work.
“The excuse that more study is needed,” Mr. Busch said, “has been a standard excuse going back to the earliest” discussions about combating climate change.
He added that, “now that the science is increasingly clear,” opponents of climate change measures are shifting the debate to economic models “which are easier to manipulate.”
Yet until the models used by economists estimating the costs and benefits of the legislation can be tested by reality, the debate is likely to continue unresolved.
“There will be job gains — there will also probably be job losses,” said Eileen Claussen, president of the Pew Center on Global Climate Change. “It’s not a black and white picture. Those who don’t want to do something will focus on the negatives and those who do will focus on the positives.”
CNN Money
Boomers: 30% underwater
Many of those nearing retirement will have very little to live on thanks to an erosion of home equity...Les Christie
NEW YORK (CNNMoney.com) -- What a turnaround for the American Dream!
According to a report released Wednesday, the real estate market bust and stock market declines have carved a huge chunk out of the assets of baby boomers, the largest age cohort in U.S. history.
So much home equity has been lost that should boomers need to sell their homes, 30% of those aged 45 to 54 would owe money at closing, according to "The Wealth of the Baby Boom Cohorts After the Collapse of the Housing Bubble," a report released by the Center for Economic and Policy Research, a Washington, D.C.-based, non-partisan think tank. About 18% of boomers aged 55 to 64 are underwater and would have to bring money to the table.
The CEPR also found that people who were renting homes in 2004 will have more wealth in 2009 than those who were owners. That's true for all five wealth groups the study analyzed, from the poorest to the wealthiest.
"The collapse of the housing bubble, which led to the current recession, has already destroyed almost $6 trillion dollars in housing wealth for homeowners," said report co-author Dean Baker. "This reality is compounded by the recent collapse of the stock market. Many baby boomers will only have Social Security and Medicare to rely on in their retirement."
Three cases
Boomers between 45 and 54 have lost 45% of their median net worth, leaving them with just $80,000 in net worth, including home equity, according to the report.
Older boomers have fared marginally better. Those between 55 and 64 have lost 38% of their net worth, leaving them with $140,000. But this group is rapidly nearing retirement age and they have few working years left to make up the losses.
To come up with their estimates Baker and co-author David Rosnick analyzed the assets of boomer-headed families and projected their wealth through September 2009. They used data from the 2004 Survey of Consumer Finance - a survey of the balance sheet, pension, income, and other demographic characteristics of U.S. families put out by the Federal Reserve - and the November 2008 Case-Shiller 20 City Price Index. The authors then factored in stock and housing market changes since then.
Baker and Rosnick presented their findings by income group under three scenarios they considered most likely: House prices remain at November 2008 levels (the latest data they had); house prices fall by 5% from November levels; or house prices fall by 15%.
In all three cases, the vast majority of these families will have lost a substantial portion of their net wealth compared with 2004.
"We've always boasted about how mobile we are as a society," said Baker, "but this can make us a lot less mobile."
A better deal
Peter Schiff, president of Euro Pacific Capital, an investment firm specializing in overseas investments and a noted bear on housing market issues, thinks there's a good chance home prices will continue their steep decline.
"Real estate has to be priced like any other goods," he said. "Home prices have to reflect the economic reality. You buy for shelter, not to be make money. You don't need to own a house. I'm a perfect example."
He has rented for years and reports that the owners of his current home, after subtracting for property taxes and insurance, are receiving a cash-flow return on their investment of less than 1%.
"Real estate is overpriced if owners get just a 1% return," he said.
Baker pointed out that the stock market and home equity losses magnify the importance of safeguarding programs like Social Security and Medicare, the twin safety nets that could provide a higher portion of retirement support than many boomers originally bargained for.
"Now that tens of millions of families have just seen much of their wealth disappear," he said, "it is especially important to pursue policies that ensure retirement security for those on the brink of retirement."