Badlands Journal
Nunes cadens...Badlands Journal editorial board
This is the sound of one more bully's self pity, the whine of a big shot who rode a political escalator, powered by big money, arrogance and greed, to the top of the cliff. You could hear him bragging all the way up. He cut a fat hog. Then, the power went out and the tiny bully found himself falling in the immense darkness and he hasn't reached the bottom yet. As he falls and falls, he bellows his bitter pieties, but they don't have the magic to turn on the lights and stop the fall, for him or anyone. People are falling without a snivel all around him, but all we can hear is this man sobbing, "Why me?" as he hurtles downward like everyone else. Yet every hair on his head is still in place. His landing will be no more spectacular than ours. Some will be more graceful. Many others will be harder. All they will say, if they remember him at all, is that this one was lacking.
Fresno Bee
DEVIN NUNES: Water issues require accountability...Devin Nunes
In recent weeks, I have suggested that registered Democrats of the San Joaquin Valley change their party affiliation. My intent isn't a plea to grow Republican registration and it is not a partisan attack. It is simply a message to Valley residents -- you and your family are under siege and the Democratic Party is leading the attack.
Don't get me wrong, Democrats have, in the past, contributed to the greatness of our state, as well as the San Joaquin Valley's rich agricultural heritage. For example, President John F. Kennedy and other Democrats from his generation helped build significant portions of California's massive water infrastructure on which the world's most diverse and productive farming region depends.
However, these aren't the Democrats who control the party today. House Speaker Nancy Pelosi and her radical liberal Democrats have taken their place. Many of these liberals have been in Congress for the past 30 years and have ushered in far-reaching environmental laws -- some of which were crammed into must-pass legislation in the dead of the night. These laws have whittled away our ability to deliver water to families in the San Joaquin Valley.
It has become increasingly clear that radical greenies now control the agenda in Washington. Indeed, numerous news accounts have detailed the interwoven connection between environmental radicals and the Democratic Party. This relationship results in aggressive campaigns to unseat Republicans and install liberal Democrats who are willing to do their dirty work.
Republicans have tried to make changes that would allow California's water system to accommodate both human and environmental needs. But any attempt to take a balanced approach is met with stiff resistance.
In fact, after his effort to reform the Endangered Species Act, former Republican Rep. Richard Pombo, found himself buried in negative advertising by environmental groups -- to the tune of millions.
In the end, Pombo was ousted by the environmental movement in favor of a liberal Democrat from the Bay Area. This new liberal joined his friends in Congress who have spent their entire careers systematically destroying our economy in the San Joaquin Valley.
Clearly their work is not complete. In an effort to appease their environmentalist patrons, the Democrats just enacted the San Joaquin River settlement, which will virtually block construction of a new reservoir at Temperance Flat -- one of our last hopes for new water storage in the San Joaquin Valley.
Many lawmakers try to have it both ways. Dancing the Potomac two-step, they insist they support Temperance Flat while at the same time enacting a new law which has made construction nearly impossible. The ability of such lawmakers to have it both ways, to pay lip service to our crisis while marching to the tune of environmental radicals, is the core of our problem.
This brings me to our present crisis: the man-made drought.
Time and again, I have told my colleagues in Congress that we are experiencing a man-made drought, not simply an act of God. In point of fact, cyclical low rainfall is a characteristic of life in the San Joaquin Valley and our region has survived much worse droughts with far less economic impact.
The difference in this situation is that, through legal and legislative action, our water has systematically been diverted away from families in the valley and subsequently dumped into the ocean.
Residents of the San Joaquin Valley need to hold their leaders accountable. While there have been many meetings, public hearings and rallies, they are meaningless if our elected leaders are permitted to make promises to us in front of the camera, then do nothing behind their office doors.
Sound bites and slogans should not be substituted for action. I have spelled out three simple initiatives to elected leaders in Washington and Sacramento -- initiatives that would bring water to our region.
The San Joaquin River settlement must be replaced with a reasonable restoration plan that permits the construction of Temperance Flat. This would provide more water for communities on the east side of the Valley.
The Endangered Species Act must be temporarily waived to ensure water deliveries from the Delta arrive to the Valley's west-side communities immediately.
The federal and state government should approve the construction of a canal that bypasses the delta. This peripheral canal will be paid for by those who use it.
Now is the time to tell your elected leaders to drop the hot air and pick up a shovel. If they fail to do so, Valley families should take action: use your votes to win your water. Because water, not words, will feed our families.
Merced Sun-Star
Plenty of details to resolve before first lady's commencement address at UC Merced
Time of graduation is moved up; now everyone wants to be there...DANIELLE GAINES
Preparations for this year's graduation ceremony at UC Merced are in overdrive, with just over one month before first lady Michelle Obama will deliver the keynote address to the university's inaugural class.
"We're working on programs, we're working on location, finding enough chairs, events before the graduation, after the graduation, all the details," said Jane Lawrence, vice chancellor for student affairs.
Interest in the ceremony has grown so staggeringly that a phone number listed on the UC Merced Web site for student tickets had to be rerouted from the chancellor's office to the main switchboard.
For the first time, UC Merced is printing tickets for the event -- 9,000 of them.
Campus organizers were originally expecting about 2,000 spectators this year.
"Four years ago, we graduated three people," Lawrence said. "This year we are graduating 500. Then, as you probably have heard, we have a keynote speaker that has attracted a little bit of attention."
All that attention has caused a bit of a headache for some of the graduating students.
Nick Nakamura led a letter-writing campaign in his fraternity, Sigma Chi, for the "Dear Michelle" campaign.
Now the 21-year-old senior and his family are waiting to see if they will get any tickets in addition to the eight promised to each graduating student. Nakamura had planned to invite 15 members of his family from San Diego, Los Angeles and Colorado.
Even though his family has already reserved more hotel rooms than they may be able to deal with, "I'm more or less just disappointed that previous UC Merced graduations were open, and this one will have to be ticketed," Nakamura said.
Other families said that the change in time for the ceremony has caused financial strain. (Obama requested an earlier ceremony when she accepted the invitation to be home with her daughters before the president leaves on a trip the next morning, UC officials said.)
"I actually felt that I was waiting sort of dangerously long because I didn't start looking for a flight out there until mid-March," said Murray Miles, the father of a graduating senior.
Miles originally planned to fly into San Francisco from Sarasota, Fla., on the morning of the ceremony.
Now his daughter won't be able to pick him up from the airport at 11 a.m. and make it to the ceremony in time, so Miles must fly in on Friday, the day before the ceremony.
"I am going to have to eat it," Miles said of the cost of the plane ticket.
"It would have been one thing to move it up just an hour. Pretty much everyone can deal with that. But to move it up six hours?" Miles asked.
His daughter, MaryCharlotte, said she finds the sudden change in plans distressing.
"To me, the important people are my family," she said. "I just hope everything goes smoothly and that everybody realizes this is a really big deal for us. We are the inaugural class, and we've been working really hard."
Campus officials and some student leaders acknowledge that luring a speaker with as spectacular a profile as the first lady required some changes in their plans. But they strongly believe the positive publicity stemming from Michelle Obama's visit will benefit the university in untold ways for a long time.
"I am starting to just question a little bit how much of an emphasis is on the graduating class (now)," said graduating senior Matt Siordia. "After a few years, it will reach a balance where we are known as the class that brought this big speaker here."
Outgoing student body president Yaasha Sabba is on the campus graduation steering committee. He's trying to make sure that events and programs unfold as smoothly as they can.
"Students have been coming up to us. All of the student concerns will be addressed," he said. "We want to make sure that the commencement is a great moment for the whole university."
It was unclear Friday afternoon how much the changes to the ceremony will cost the university.
UC Merced will graduate its first full senior class at 1:30 p.m. May 16, which is a Saturday.
UC Merced GOP group heads tea party
UC Merced's College Republicans said they're sponsoring a Tax Day Tea Party on Wednesday on campus from 10 a.m. to 3 p.m.
The events are the modern-day Boston Tea Parties and are nonpartisan rallies for the public to demand government financial responsibility, the group said.
Hundreds of similar tea parties have been held in nearly every state in the union over the past two months.
They focus on taxes and demand that the federal government not spend trillions of borrowed dollars that future generations will have to pay off.
The Young Republicans said they'll join more than 300 cities nationwide, and more than 40 cities throughout California, which are also holding the events.The campus group will be selling food, drinks and will have a raffle featuring UC Merced gear and books. Those who come can bring their own picket signs, the Young Republicans said.
Contact collegerepublicans @ucmerced.edu, or visit the Web site at MercedTeaParty.com.
Modesto Bee
Energy secretary visits Sandia lab...SUE MAJOR HOLMES, Associated Press Writer
ALBUQUERQUE, N.M. -- The nation's energy secretary says the scientific work that the federal weapons laboratories do outside their central mission of making sure nuclear weapons are reliable is vital to that core.
"I don't see it as a diversion," Energy Secretary Steven Chu said Friday on a visit to Sandia National Laboratories, the second part of his visit to New Mexico's two nuclear weapons laboratories. "I see it as using the assets and the intellectual capabilities in a much more coherent fashion."
Harnessing the "intellectual horsepower" of the national laboratories has stood the country well and will serve it in the future, said Chu, a Nobel Prize-winning physicist who was confirmed as energy secretary at the end of January.
Many scientists came to one of the weapons labs - Sandia and Los Alamos in New Mexico and Lawrence Livermore in California - to work in esoteric areas, Chu said. But as they matured in what he called "the natural life cycle of a scientist," they realized they also wanted their work to have an impact on the real world.
"Because of that, to have the ability of laboratories like this to work on a broad variety of topics is actually good for the central mission as well," he said.
Chu, a former director of Lawrence Berkeley National Laboratory in California, visited Los Alamos on Thursday, chatting scientist-to-scientist about ongoing research into climate modeling, hydrogen storage, nanotechnology, HIV and other issues.
At Sandia, like at Los Alamos, he was taken on a rapid walking tour of research - in the case of Sandia, its Microsystems and Engineering Sciences Application microelectronics laboratory. There, scientists gave him quick time presentations of research into nanotechnology, hardening equipment to work in extreme environments and solid state lighting. He looked at displays outlining the work and peered into the windows of clean rooms full of suited-up researchers.
And as he did at Los Alamos, he peppered scientists with questions that showed he was one of them and understood their work.
Chu said his biggest fear is that the nation won't realize the importance of having the labs work on research outside nuclear weapons and security. Not doing other research, he said, would ignore "an incredible resource for the country."
He also said it's important for the United States to become the leader in new high-tech industry and manufacturing.
"Research and development are going to be the way to the economic prosperity of the United States in the future, and these laboratories play role in that," by developing technologies that industry adopts.
He floated the idea of mini-labs - "lab-lets" he called them - focusing on particular areas of excellence to move research along faster.
"Some of the most revolutionary things are done by taking bold chances," Chu said. "That means you have to accept failure. But it's very important to fail quickly and move on."
In his own research, Chu tried to tackle the hardest part first. "If those show-stoppers turned out to work, then I knew the thing was going to work and I could invest time in it," he explained.
But if the difficult part didn't work, the scientist could move on, he said.
"Being very bold and shooting for the moon is something we want to encourage," Chu said.
Earlier in his visit, Chu spoke to a packed auditorium in a speech that was broadcast to other labs. He stressed the importance of lab work that could assure the reliability of nuclear weapons in a post-Cold War world and counter nuclear proliferation, particularly to rogue nations or terrorist states.
But Chu, a longtime advocate of research into alternative energy, also pointed out the work labs have done in computer simulations - including those on global warming.
He illustrated that point with a slide of the Titanic.
Unlike the first Titanic, this one - the world - has many captains, who in turn have to listen to other people, he said. The ship is moving full-steam ahead despite warnings that it takes a lot to turn it around and the fact many people can see the iceberg of global warming.
Scientists, Chu said, can help the Titanic hit the iceberg a glancing blow rather than straight on, assuring a smaller temperature increase the world can adapt to.
He ended his speech with a challenge to scientists, showing a photo of the Earth taken from the moon in December 1968. Earth, he said, is in danger, and "there is really nowhere else to go."
Fresno Bee
Dairy waste rule halted
Air officials say ozone could soar because of lawsuit by activists...Mark Grossi
Local air officials say an activist lawsuit is forcing them to suspend an important pollution rule for dairies and other animal operations -- a rule that has the same effect as removing 1.3 million cars from the roads.
Officials said they must roll back the restrictions next month, potentially exposing the public to tons of pollution as ozone season begins. The rule may not return for many weeks, they said.
The rule is aimed at reactive organic gases coming from waste, feed and the animals themselves. Owners of animal operations reduce gases with such measures as special feed and washing waste out of animal stalls.
But a court agrees with Valley activists, who say there is no proof that the San Joaquin Valley Air Pollution Control District rule protects anyone. The district's claims misrepresent the court's opinion, the activists say.
"They just don't like losing this case," said lawyer Brent Newell of the Center on Race, Poverty and the Environment, representing activists.
Legal action and new state law had forced the district to pass the rule in 2006, Newell said. Soon after, he filed a lawsuit against the rule on behalf of the Association of Irritated Residents, or AIR, based in Kern County.
A state court last year ordered an analysis of health benefits. The court also required the district to set the rule aside until the health study is considered.
The district has produced the study, and Thursday the district board is expected to set a May 21 public hearing on it.
Air officials say the study amounts to a technicality in the court case. They said the court rejected activists' main arguments -- that the rule didn't address all pollutants, did not require the best technologies and overstated emissions reductions.
Animal operations are considered among the biggest contributors of reactive organic gases. It is one of the two main ingredients in ozone, a corrosive gas that can trigger lung problems such as asthma. The Valley has some of the worst ozone pollution in the country.
After the public has commented on the health study in May, board members are expected to consider it at the district's June 18 board meeting. The board could adopt the same rule again or direct staff to begin the public process of amending it.
District executive officer Seyed Sadredin said he would prefer not to set aside the rule even for a short time, but activists refused to allow it.
"We are disappointed that Bay Area attorneys representing AIR rejected our proposal to leave the rule in place and continue the progress that we have made in significantly reducing dairy emissions," he said. "Setting the rule aside at the peak of the Valley's ozone season is not in the best interest of the Valley residents."
Sadredin said he is asking dairies to follow clean-air restrictions voluntarily so residents won't suffer.
An industry coalition -- Community Alliance for Responsible Environmental Stewardship based in Sacramento -- on Friday called on Valley dairies to continue complying with the regulations.
Newell said the appeals to dairy owners are disingenuous, saying the rule mirrors industry practices. Dairy owners are not likely to change their practices overnight, he said. In addition, he said, if the rule continued in place during the health study, the air board might reauthorize it without fully considering the health effects.
Sacramento Bee
California's high-speed rail forces seek big slice of stimulus pie...Steve Wiegand
California's long-delayed dream of a high-speed train zipping up and down the state is in line for a hefty – and much needed – slice of a federal stimulus pie.
The American Recovery and Reinvestment Act approved by Congress in February contains $8 billion to be doled out to states for development of high-speed rail service and passenger rail service among cities.
California wants half.
"As of now, we have close to $4 billion worth of things we can show can be done within the time limit" of the act, said Mehdi Morshed, executive director of the California High-Speed Rail Authority, the agency charged with building a speedy rail line connecting Northern and Southern California through the Central Valley.
Morshed and other California boosters are trying to make the case with federal transportation officials that when it comes to high-speed rail in the United States, the Golden State is king.
"All factors considered, we are at the top," Morshed said. "We are the only ones with a real high-speed rail project. Everyone else is just improving their current (conventional) rail service."
There is little argument that compared to other states, California's project – which could wind up costing up to $85 billion, depending on whom you ask – is closest to reality.
Project boosters contend it eventually will connect all of California's major population centers with 800 miles of high-speed track and trains that will carry more than 100 million passengers a year and hit speeds of 200 mph-plus.
For most of its 13-year existence, the rail authority has scuffled along on shoestring budgets. Last week, in fact, the authority got a short-term $29 million loan from the state's Pooled Money Investment Board to carry it through the rest of the fiscal year that ends June 30.
Last November, voters approved a $10 billion bond issue that is supposed to serve as seed money for the system. But because of the dreary economic climate and the protracted state budget battle last fall and winter, none of the bonds have been brought to market yet.
The rest of the $35 billion that rail authority officials estimate is needed for the first phase of the project – a line through the Central Valley connecting San Francisco with Anaheim – is supposed to come from the federal government and private investors.
And therein lies the importance for California scoring a significant chunk of the federal dough.
"Private investors are very interested in the project," Morshed said, "but because it takes so long, they want us to do the initial items, the environmental work, acquisition of the rights of way, building some pieces … so they don't have to wait 10 years to get some return on their investment.
"So you have to initially spend the public money, and then they will get excited and come in and do the rest. Anything we can do to expedite construction is important, and for that we need all the public money we can get."
California's chances are augmented by having some heavy political hitters in its corner, including House Speaker Nancy Pelosi, D-San Francisco.
In a recent letter to Transportation Secretary Ray LaHood, Pelosi and 20 other California congressional members outlined criteria they said should be taken into account when awarding the stimulus funds. Not coincidentally, the only project that meets the criteria is California's.
But other projects also have heavy hitters. A Midwest proposal that would tie Chicago to St. Louis and other major cities in the area is a favorite of President Barack Obama's.
A plan to tie the Los Angeles area to Las Vegas with a bullet train is smiled on by Senate Majority Leader Harry Reid of Nevada, although it's unclear whether the project is eligible for the federal funds because it is being promoted by a private group.
There are also serious proposals from Texas and Florida, where previous efforts to get high-speed rail projects out of the barn flopped, in part because of opposition from then-Texas Gov. George W. Bush and then-Florida Gov. Jeb Bush.
And California's recent budget problems and incessant partisan squabbling also might affect its share.
"The only reason you wouldn't spend $2 billion or even $3 billion or more on California is if you had doubts about the state's commitment or ability to do the high-speed rail project," said Ross Capon, executive director of the National Association of Railroad Passengers. "California has the lowest bond ratings of any state … and there are some doubts about its political leadership."
Critics also contend that California's proposed system is riddled with greatly inflated ridership estimates and greatly understated cost projections.
"The California authority has ignored the lessons of Florida and Texas, and has repeated all the mistakes," said Joseph Vranich, a former Amtrak official and former president of the High Speed Rail Association. "It hasn't produced a single number or report or prediction that is true."
For example, Vranich argues, California should be disqualified from receiving federal rail aid because its environmental impact statements are outdated and inaccurate.
Morshed, who denied the state's project lacks accurate EIS documents, said a bigger fear is that federal transportation officials will adhere to political expediency and disburse the money in widespread, but tiny, amounts.
"If they decide to spend the money all over the place, that's a big problem," he said, "but we're hoping they will focus on just three or four projects."
Federal transportation officials are scheduled to issue initial guidelines for formally applying for the money next week and final rules in June.
In the meantime, authority officials are acutely aware that the best way to grab a big share of future federal and private investments is to get dirt moving.
"The groundbreaking goal is as soon as we can," Morshed said. "Depending on how much money you can give me and what (political) leverage you provide me, we can break some ground. … It's quite conceivable that it could be next year."  
Stockton Record
Appeal expected on Wal-Mart decision...The Record
LODI - A law firm representing developer Darryl Browman notified Lodi City Hall via an e-mailed letter Friday that it intends to appeal a Planning Commission decision to deny a land use permit for a Wal-Mart Supercenter in west Lodi.
City officials said the e-mailed letter is not considered an official appeal until the city receives a paper copy and a $300 check, the cost to file an appeal.
An official copy is expected to reach City Hall by Monday, starting a 30-day time period in which the City Council must hold a public hearing on the use permit, city spokesman Jeff Hood said.
The letter of appeal states that Browman's shopping center project, anchored by a Supercenter, complies with all city requirements for a use permit and should not have been denied.
On Wednesday, commissioners cast a 3-3 vote on the use permit. A tie vote can not approve a motion, thus it was denied.
A Wal-Mart Supercenter has been the subject of controversy for the better part of a decade in Lodi as citizen groups have been starkly opposed. Lodi has a Wal-Mart, and a larger outlet would threaten small businesses, critics say.
A City Council decision on whether or not to issue a use permit for the shopping center could come as early as May 5, city officials said.
Los Angeles Times
Wildlife found to be unlikely E. coli culprits
Two years of testing show that wild animals are not 'Typhoid Marys,' California biologist says...Bettina Boxall
After wild pigs were linked to the deadly E. coli outbreak in California spinach nearly three years ago, Central Coast growers started shooting and poisoning wildlife.
Workers on one large farm killed 33 deer in a single year. Farmers poisoned ponds to get rid of frogs, ripped out trees and bushes and erected miles of expensive fencing.
But two years of testing wild animals and birds in the region suggests that only a small fraction actually carry the strain of Escherichia coli responsible for the contamination.
The results, released by the state Department of Fish and Game this week, "show that wildlife are not the Typhoid Marys some people think they are and some of the extreme measures are not necessary," said state wildlife biologist Terry Palmisano.
As part of an ongoing study of the pathogen, researchers collected samples from 866 animals, including 311 black-tailed deer, 184 feral pigs, 73 birds, 61 rabbits, 58 tule elk, squirrels, mice, skunks and coyotes.
Only four -- from a pig, a coyote and two elk -- tested positive for the lethal bacterium, E. coli 0157:H7. That is slightly less than half of 1%.
Three people, including a toddler, died in the spinach outbreak in the late summer of 2006. Federal authorities estimated that several thousand people were sickened across the country.
The contamination was traced to spinach grown on a cattle ranch east of Salinas. Although the precise source was never determined, the virulent E. coli was found in river water as well as in feces from cattle and wild pigs on the ranch.
The produce industry later adopted a voluntary set of standards for growing and handling leafy greens that amounted to a big "Keep Out" sign for any wildlife considered potential carriers of E. coli 0157:H7.
Big produce buyers also struck their own safety agreements with farmers, calling for even more precautions.
Requests jumped for state depredation permits allowing farmers to shoot wildlife damaging their crops. Growers who might otherwise have tolerated a deer browsing some lettuce shot the animals, fearing they couldn't sell a crop if safety auditors found droppings or tracks in a field.
"The buyers don't want even mice getting close," Palmisano said.
Baited PVC pipes with traps are a common sight along the edge of fields. Much of the Salinas River has been fenced. Grass along irrigation and runoff ditches has been dug up, leaving wide strips of bare ground.
"Folks are having to do stuff they don't want to do in order to sell their crop," said Paul Robins, executive director of the Monterey County Resource Conservation District.
In a 2007 survey by the district, one grower reported he had lost $17,500 worth of a crop because there were deer tracks in a field. A harvest was stopped when frogs and tadpoles were found in a creek.
The district's program director, Melanie Beretti, said farmers are resisting anti-erosion and water quality projects that involve vegetation that could attract wildlife.
She cited a strawberry grower who wanted to plant a hedgerow next to a long ditch. He dropped the idea because another farmer sometimes grew leafy greens in the field and couldn't plant within 50 feet of the shrubs.
Hank Giclas, vice president of the Western Growers Assn., said farmers are caught in a bind between satisfying wholesalers' demands and conservation practices.
"We're very supportive" of the E. coli study, he added. "We want to fundamentally understand where the risks are -- and are not -- and have designs that minimize the risk with the least negative impact on the environment in which people farm."
But he said his group, which helped draw up the voluntary standards, would wait until the research was finished before taking any action on the guidelines. In the meantime, an effort is underway to expand the safety program nationally.
The E. coli testing is part of a broader investigation by government and university scientists that will sample livestock, water and soil. More wildlife will also be tested.
"You can't make the interpretation yet that there is not a problem with wildlife," said Robert Mandrell, the lead researcher and a microbiologist with the U.S. Department of Agriculture. "But so far the data don't indicate there is a major red flag here."
For the survey, fish and game workers collected fecal samples from freshly killed deer and live animals and birds that were trapped and released. One technique is to place birds in a brown paper bag to collect droppings. But for the most part, fish and game spokesman Harry Morse said, "gloves and little bitty jars" are used.
Fed Economists Say Mortgage Changes May Not Stem Foreclosures...Scott Lanman
April 10 (Bloomberg) -- Policies aimed at easing home-loan terms for troubled borrowers may not be as effective in preventing foreclosures as more-direct aid to homeowners, Federal Reserve economists found.
Job losses and falling home prices have a bigger impact on delinquencies than mortgage terms, and modifications aren’t necessarily a better deal for investors than foreclosures, according to a paper by two current and one former economist at the Boston Fed Bank and one Atlanta Fed researcher.
The conclusion poses a challenge to housing advocates and to some extent the prevailing views of President Barack Obama’s administration, Fed officials and other U.S. regulators. Obama announced a $75 billion plan in February that concentrates on refinancing or modifying loans for as many as 9 million homeowners.
“One of the most influential strands of thought contends that the crisis can be attenuated by changing the terms of ‘unaffordable’ mortgages,” the economists said in the paper posted on the Boston Fed’s Web site today. Yet policies aimed at reducing a borrower’s debt-to-income ratio “face important hurdles in addressing the housing crisis,” the authors said.
Instead, the government should consider alternatives such as loans to homeowners to bridge the loss of income for one or two years caused by unemployment, or helping borrowers become renters, the economists said.
Boston, Atlanta
The authors include Christopher Foote and Paul Willen, who are senior economists and policy advisers at the Boston Fed; Kristopher Gerardi, a research economist and assistant policy adviser at the Atlanta Fed; and Lorenz Goette, a professor at the University of Geneva and former economist at the Boston Fed.
The paper doesn’t specifically discuss the merits of the White House plan.
The federal government has used policies to encourage loan modifications as a principal tool of attacking the surge in foreclosures over the past year. Fed Chairman Ben S. Bernanke, in a December speech, called for “greater standardization and efficiency” in programs to ease loan terms, while FDIC Chairman Sheila Bair has pressed the Treasury and mortgage companies to step of the pace of modifications.
Eric Rosengren, president of the Boston Fed, said in a January speech that loan servicers should be able to increase mortgage modifications as interest rates decline.
At the same time, many borrowers should be able to refinance through Federal Housing Administration loans, Rosengren said in the speech. Also, some borrowers just won’t be able to make their mortgage payments and could instead receive assistance to move to a rental property, he said.
CNN Money
Bank failures: '09 tally reaches 23
Cape Fear Bank in Wilmington, N.C., and New Frontier Bank of Greeley, Colo. were shuttered. The closures will cost the FDIC an estimated $801 million...Julianne Pepitone,
NEW YORK (CNNMoney.com) -- Two banks failed Friday, bringing the 2009 tally to 23, according to the government.
Cape Fear Bank of Wilmington, N.C., and New Frontier Bank of Greeley, Colo., closed their doors for the last time Friday, said the Federal Deposit Insurance Corporation.
Charleston, S.C.-based First Federal Savings and Loan Association of Charleston will assume control of all Cape Fear's deposits.
The failure of Cape Fear will cost the Deposit Insurance Fund an estimated $131 million, according to the FDIC.
Cape Fear Bank held assets worth $492 million and total deposits of $403 million as of March 31, according to the FDIC.
For New Frontier, the FDIC created the Deposit Insurance National Bank of Greeley which will remain open for roughly 30 days to allow depositors time to open accounts at other insured institutions. San Francisco-based Bank of the West will provide operational management.
At the end of the 30-day transition period, the FDIC said it will mail checks to those depositors who have not closed or transferred their accounts during the transition period.
The FDIC said the failure of New Frontier will cost the Deposit Insurance Fund an estimated $670 million. New Frontier held total assets of $2 billion and total deposits of about $1.5 billion as of March 31.
The FDIC will continue to fully insure individual accounts up to $250,000 through the end of 2009.
Biting the dust
Bank failures in 2009 have become a near-weekly occurrence, and regional banks have come under significant pressure during the recession. A total of 25 banks failed in 2008.
Rising unemployment has made it hard for many consumers to keep up with expenses, and has led to a higher default rate. As a result, credit has been extremely tight as banks have been fearful of lending to cash-strapped customers.
Banks are also wary of rising writedowns stemming from the rapid decline in home prices, which has left mortgage-backed assets almost worthless. Many remain reluctant to lend, despite several actions taken by the government to inject liquidity into the economy.
Stress tests
To determine how much capital banks need, the government began "stress tests" to see which institutions would survive under worse-than-expected economic conditions.
President Obama met Friday with top financial regulators to discuss the tests. Officials have said they will release the results by the end of April.
Once the stress tests are complete, banks will have six months to raise any needed cash through the private market or take government funds.
Another government plan would use public-private investment funds to soak up the banks' toxic assets and clean their balance sheets.