Badlands Journal

3-28-08
Capital Press
Regulators probe market volatility...MATTHEW PERRONE (AP)
http://www.capitalpress.info/main.asp?SectionID=67&SubSectionID=790&ArticleID=40330&TM=80218.85
WASHINGTON - Costlier corn flakes, pricier pizzas and painful pump fill-ups share more than top billing among consumers' worries.They're all riding a roller coaster of commodity market prices, where peaks are unusually high. Like oil futures, agricultural futures have experienced dramatic highs and lows in recent months as Wall Street investors flock to commodities for protection from the falling dollar and slumping stocks.
But the ups and downs in futures prices are giving grain sellers and farmers financial vertigo. Instead of finding predictable prices for wheat, corn and other crops in futures markets, they're getting daily price jolts and no refuge from uncertainty.That has prompted government regulators to examine what forces, if any, have thrown the markets off balance.The Commodity Futures Trading Commission said last week it will meet with farmers, traders and grain sellers next month to assess the recent price jumps...
"There has been a huge influx of capital from index funds and pension funds to the point now where futures markets are not reflecting actual supply and demand," said Todd Kemp, spokesman for the National Grain and Feed Association.
As a result, Kemp said grain buyers have had to pay more to hedge themselves against future price shifts. Some of those expenses have been passed on to food processors and then to consumers. The futures volatility is adding to a cocktail of cost-raising factors that have pushed bread, cereal and other staples to record highs.
The price of white bread rose to $1.32 a pound last month, up 28 percent from a year ago, according to government data.
The U.S. wheat crop has been shrinking since the early 1980s as many farmers have decided to plant more profitable crops. President Bush signed energy legislation in December that is expected to encourage farmers to plant more corn, which can be processed into ethanol.
At the same time, poor wheat harvests in Australia and parts of Europe caused China and other Asian countries to buy up more American crops.The combination of real-world demand and turbulent markets has placed farmers in an unusual situation.
"These are very favorable prices for farmers, but they can't benefit from them if they can't sell their futures," said Melvin Brees, an agriculture analyst at the University of Missouri. Turbulence in the market has put financial strain on grain buyers, causing them to scale back spending on futures.
In the latest shift, agriculture futures plummeted last week as a rebounding dollar persuaded many investors to sell their holdings in commodities. Wheat futures closed below $10 a bushel on the Chicago Board of Trade for the first time in more than six weeks...Traditionally, as a futures contract is about to expire, its value converged with the approximate cash price of the commodity. But in recent months there have been increasing gaps between futures and cash prices..."Speculators have probably put some error in the futures market," said Darrell Good, professor of agriculture economics at the University of Illinois..."We do have a lot more speculative money in these markets, but even so the system should be designed so the delivery process works," Good said.
3-27-08
Wall Street Journal
Grain Elevators Caught Between Farm Boom, Credit Crunch...LAUREN ETTER and SCOTT PATTERSON
http://online.wsj.com/article/SB120658304120967539.html?mod=googlenews_wsj
A fault line is emerging in the U.S. farm economy, as rising grain prices and the credit crunch combine to squeeze grain elevators, a crucial business link between farmers and markets.
Grain elevators that collect grains from farmers and sell them up the food chain have seen their costs of doing business balloon as prices of corn, wheat, soybeans and other grains have soared to record levels. At the same time, lenders chastened by the subprime mortgage crisis have grown increasingly reluctant to extend money to tide the elevators over.
Some elevators already have gone out of business. Big agriculture companies such as Cargill Inc. and Archer-Daniels-Midland Co. have altered the way they do business with farmers in some cases. State and federal regulators have begun to take note. If many more elevators fold, there could be a cascading financial impact on banks and financial institutions that manage futures accounts for elevators.
"We could have an explosive problem on our hands," says Diana Klemme, vice president at Grain Service Corp., an agriculture risk-management and brokerage house in Atlanta.
Few sectors of the economy have gone unscathed by the economic downturn, but agriculture has largely fared well as corn, wheat and other grain prices have been driven up by global demand for food and biofuels. In part due to higher prices, U.S. farm income this year is projected to reach a record $92.3 billion, while food prices have jumped by nearly 5% in the past year.
Farmers looking to lock in profits now are entering contracts with elevators to sell grains that won't be harvested for two to three years. To offset their risk that prices will fall, elevators typically then sell a futures contract on an exchange like the Chicago Board of Trade. Whenever the price of the grain goes higher than what is in that contract, the elevator has to make a margin call -- or post an additional amount of money to keep the account current.
These margin calls have become a crushing burden. Before the recent grain boom, a midsize elevator might have had to make a daily margin call of about $200,000 on a day when a grain market rallied. Now, it isn't uncommon for that same elevator to have a daily margin call of $1 million or more. Many elevators, lacking that much cash on hand, then turn to their banks for help. But even though the farm economy is strong, rural and agriculture lenders have stopped lending additional money in some cases as elevators have exhausted their credit limits.
Many grain elevators are "at their ropes' end financially," says Michael Swanson, an agriculture economist at Wells Fargo, a big lender to farm country. But as grain prices continue to rise, "a lot of lending institutions will call into question whether they can write another $50 million check for another margin call. The credit crunch is very real"...Stuart Selinger, bureau chief of the Illinois Department of Agriculture's Bureau of Warehouses, which regulates grain dealers, says he is concerned about a potential wave of defaults by grain elevators. His staff is currently liquidating the assets of a small Illinois grain elevator, The Grain Exchange, based near St. Louis.
The 15-year-old company faced a sharp run-up in margin calls that it couldn't meet -- to $5 million this year from $2 million last year -- as grain prices soared, says owner John Kniepmann. Its license to buy and store grains was suspended March 3. "My life and business have been turned upside-down," says Mr. Kniepmann, who doesn't plan to restart his business...Even big companies are feeling the effects. Cargill's grain-merchandising unit, AgHorizons, recently stopped offering grain contracts to farmers in some areas unless they could deliver grain to the elevator within 60 days, eliminating an important tool for farmers to hedge their risks against grain prices plummeting. Cargill spokesman David Feider, says, "We have made some changes given the market conditions."
Rival Archer-Daniels-Midland also has limited some of its contracts to farmers. Company spokesman David Weintraub says ADM doesn't comment on its hedging strategies.
Moves like those have crimped farmers' ability to manage risk in volatile grain markets. "I never really saw this coming," says John Phipps, a farmer in Chrisman, Ill., who learned recently that his largest customer, Cargill, would no longer take his grain under previous terms. "Forward contracting is such a basic, fundamental and routine exercise." Now, "My entire marketing plan fell apart."
One potential contributing factor is that new investors like index funds have flooded into agriculture commodities -- along with gold, oil and other commodities -- as a shelter from fizzling stock markets and other investments. Total index-fund investment in corn, soybeans, wheat, cattle and hogs has increased to about $42 billion, up from just over $10 billion in 2006, according to AgResource Co., a Chicago-based agriculture research firm.
The added trading activity by these institutions has helped drive up grain prices to levels unsupported by underlying fundamentals, some farmers say.
Government regulators are monitoring the role that these new investors are playing in commodity markets to ensure they aren't "the gorilla in the room breaking all the china," says Jeff Harris, chief economist at the Commodity Futures Trading Commission, the government agency that regulates commodity futures and option markets.
It is a delicate balance, though. If regulators were to restrict index funds' investment activity too much, grain prices could tumble...Ms. Klemme, the grain broker, takes solace in the Federal Reserve's recent action rescuing Bear Stearns Cos. That "gives me hope," she says. "If there is a liquidity crisis it's good to know there can be money made available for the banking system."
3-13-08
Cattlenetwork
Grain Outlook: Financial Woes Fail To Corral The Bulls
http://www.cattlenetwork.com/content.asp?contentid=205080
Absent fresh fundamental supply and demand news, the grain and oilseed markets have been whipsawed by factors from outside of agriculture lately. The falling value of the dollar against other major currencies has boosted commodity prices. But the turmoil in the financial markets has had the greatest effect on the commodity markets in recent weeks.
Since last fall, growing global demand, tight supplies, and the weak U.S. dollar have pushed prices of most commodities up. Institutional investors, including the so called hedge funds, sensed opportunities to benefit from inflation as well as to earn sizable profits and shifted money out of real estate and stocks into commodities, sending prices to historic high levels. Firms of this type tend to be highly leveraged, meaning they multiply the returns to their own equity by also investing large amounts of borrowed money.
The subprime mortgage mess was supposed to be just a bump in the road for the financial community. It has turned out to be more severe than first thought and has sent ripples far beyond banks and other financial firms. Lenders are revaluing risk and stiffening criteria for borrowers to qualify for loans. Losses have lowered their financial reserves reducing their ability to make new loans. The resulting credit crunch is impacting a broad range of industries.
High commodity prices and increased commodity exchange margin requirements have been stretching the financial resources of all agribusiness firms including those in the grain and oilseed trades and speculators. Hedge funds and other speculators have had difficulty in coming up with cash when faced with margins calls. Rather than go to lenders, many of which are having liquidity problems of their own, the speculators have resorted to raising money by cashing out of profitable commodity positions causing temporary, but sometimes wide, price fluctuations.
Hedgers such as country elevators and even large grain trading companies, which have on-going business reasons to buy and sell futures contracts, are bumping up against their borrowing limits. The financial community credit woes are making lenders wary of extending more credit. At the same time, wide daily price fluctuations and the unwillingness to expose themselves to further price risk have caused grain buyers to make grain basis bids only.
These developments have had the effect of reducing cash forward contracting opportunities for grain and oilseed producers unless they are willing to use futures forward contracts, and put up the margin money themselves, or buy options. But it hasn’t had much effect on the bullish tendencies of the markets.
The March World Agricultural Supply and Demand Estimates report released this morning by the USDA contained some surprises in estimated production and carryover supplies. Though small, the surprises could have a major impact on markets super-sensitive to even small changes in supply or demand as the spring planting Battle for Acres is about to play out.
Traders, who had been engaged in pre-report position jockeying for several trading sessions, guessed wrong on corn and were a little too conservative on soybean and wheat carryovers.
There were absolutely no changes in the USDA numbers for corn from last month’s WASDE report. Strong U.S. corn exports had traders convinced the USDA would lower corn carryover. At 11% of usage, the corn carryover this year is even tighter than last year when it was 12%. Traders still expect the USDA to lower corn carryover after the release of the quarterly stocks and planting intentions report at the end of the month. The global coarse grain supply was increased in the report, mostly due to increased Brazilian corn production. Ample rain improved yield prospects for the summer crop and high corn price is expected to stimulate an increase in winter corn plantings in Northern Brazil.
The USDA dropped U.S. wheat carryover by 30 million bushels, 23 million bushels more than the average trade estimate. At ten percent of usage, that will leave the U.S. a little more than a one month supply at the end of the marketing year for wheat on May 31st. The last time the U.S. had a wheat carryover that low was in the 1946/47 marketing year. The global carryover supply of wheat remained at a 30 year low despite slightly better than anticipated crops in India, Brazil, and Australia...

California, particularly the San Joaquin Valley, staked its whole future on the real estate speculation. And things are now coming apart in a big way.

The Valley, of course, is not New York or Washington, where the decisions were made that created both the housing bubble and its bust. Our local finance, insurance, real estate, landowning and political leaders (FIRE Plus) are merely reacting to forces far beyond their control. Their thinking, in a literal sense, is totally "derivative." But, if rumbles in the County Administrative Building are any indication, the local chapter of FIRE Plus is in a major panic.

At the bottom, there are some local stories about the regional real estate deal. However, I included parts of Doug Noland's recent piece in Asia Times above them to provide a critical perspective on the de facto nationalization of Fannie Mae and Freddie Mac. Noland puts forth a convincing argument that this latest Bush-administration handout to cronies is the financial equivalent of the invasion of Iraq.

The Valley "leaders" remind us of a pied piper whose melodious flak has led the regional economy into a barrel now under heavy fire. Still, even in such an unpleasant situation, it is possible to think critically and perhaps decide what to protect and preserve. But, that thinking cannot occur in an atmosphere dominated by group panic and reaction, attacks on the most vulnerable citizens and blind lashing out. Real estate values are falling because they were highly inflated. As a result of the international real estate bubble, which created a great deal of paper wealth in this region (and enormous political corruption), the entire credit system -- apparently in the whole world -- is melting.

It has been clear since the bubble began that its critics had it right: it was unsustainable and would lead us into uncharted financial waters. The press has been full of stories including indications that "it has not been this bad for five years, 10 years, 20 years, since as long as I've been in real estate, since as long as such and such an agency has been keeping that kind of records ..." all tending back toward 1929 and the early Thirties. This is no dotcom collapse, the near meltdown of the Long-Term Capital Management or the 1987 stock market crash. It isn't even another S&L collapse. Something is happening that may not be described adequately by the word, "recession."

And yet, the level of denial today is even higher than the level of denial during the height of the bubble, and the acting out of greed sickness -- in fear now rather than in arrogance -- is even more demonstrable. Local government, the land-use agencies that approved all the projects, many of them half-finished and containing growing numbers of empty houses, seems to have adopted panic as the appropriate response. Perhaps this reflects the number of ruined speculators among our local officials. It certainly reflects general funding problems states, counties and cities are encountering. But, instead of the leadership the public has a right to, especially in critical times like these, we are getting a pathetic display of cringing cowardice, greater lies and suppression of public information, hostility and even a few actions that border on the psychotic from local officials. Examples are evident in a region whose entire power structure has been based on land ownership since the end of Indian times.

Badlands Journal editorial board
-------------------

3-28-08
Asia Times
CREDIT BUBBLE BULLETIN
Nationalization and dislocation
Commentary and weekly watch by Doug Noland
http://www.atimes.com/atimes/Global_Economy/JC26Dj02.html
As long-time readers are all too familiar, I have been a persistent critic of government-sponsored enterprises, or GSEs - notably mortgage finance agencies Fannie Mae and Freddie Mac. These behemoths of historic credit excess - instigators of the mortgage finance and housing bubbles - liquidity backstops for the ballooning leveraged speculating community - and instrumental agents for an unparalleled misallocation of financial and economic resources - are proving themselves the Freddie Krueger of systemic distortions and policy failures.
Two recent comments, the first from Friday's Washington Post,paint part of the picture:

To understand Wednesday's decision by federal regulators to let Fannie Mae and Freddie Mac set aside less cash to protect against losses, imagine a family that keeps its precious antique silver in a strongbox on a high shelf, beyond easy reach. The regulators have essentially authorized Fannie and Freddie to pawn some of their family silver.
Currently, the two firms, known as government-sponsored enterprises, or GSEs, have combined reserves of US$82 billion. This includes an extra amount that the regulator, the Office of Federal Housing Enterprise Oversight (OFHEO), required them to hold while they got their books in order after accounting scandals. Now it is reducing that extra cushion by $5.8 billion. The newly freed-up money will leverage the purchase and securitization of up to $200 billion in home loans.
The point, however, is not to save Fannie and Freddie themselves but to use the two firms, which buy mortgages and resell bunches of them to investors in the form of bonds, to ease the difficulties of borrowers more generally. It’s as if our hypothetical family pawned its silver to help the neighbors out of a financial jam … This is risky. If all goes well, freeing up the GSEs will buoy mortgage lending, thus slowing or reversing the slide in housing prices … But if housing continues to tank, and the GSEs rack up new multibillion-dollar losses on top of those they have already incurred in recent months, they will have that much less in reserve to fall back on. The GSEs enjoy an implicit federal guarantee, but reducing their capital for a purpose such as this, at a time such as this, goes a fair way toward making that bailout promise an explicit one. (Washington Post, March 21)

I found OFHEO director James Lockhart's interview late Wednesday afternoon on CNBC also worthy of documentation:...

Lockhart: Well, it may take awhile. The mortgage market is one issue, but there are some other markets out there as well. I think this is going to be a major step forward. As you said, they can do $200 billion in purchases immediately. And to the extent they’re guaranteeing mortgage-backed securities - that could almost get into the trillions. We’re looking at that they would have the capacity - between what we did today and the significant capital raising that they committed to - they could do over $2 trillion in business this year if the market needs that money.

It would be an outright crime if thinly capitalized Fannie and Freddie were allowed to increase their Books of Business (mortgages retained on their balance sheets and MBS guaranteed in the marketplace) by $2 trillion this year - "if the market needs that money".
I was shocked when Mr Lockhart imparted that they were now in a position to accomplish such a feat. It is certainly a terrible idea to put Fannie and Freddie guarantees on millions of new mortgages created from restructuring loans of troubled borrowers. This would amount to nothing less than a despicable transfer of massive prospective credit losses directly to the American taxpayer (current owners of this paper should not be bailed out).
Wishful thinking
I have fully expected the GSEs, at some point, to be taken over by the federal government. It may have been orchestrated subtly, but I can only presume that such a historic endeavor was accepted last week as the only means of averting financial dislocation. And for their regulator to suggest that the GSEs today have any handle whatsoever over their unfolding "risk management" challenge is wishful thinking - at best.
As far as I’m concerned, much of the US mortgage market was this week essentially nationalized. I’ll take the dramatic narrowing in agency debt and MBS (mortgage-backed securities) spreads as support for this view. Additional support arrived from comments from Mr Lockhart, US Treasury Secretary Henry Paulson, and actions by the Federal Reserve. Having lived contently for years with the markets’ interpretation of the (grey-area) "implied" government backing of the GSEs, our policymakers are surely today satisfied with the inferred market acceptance of mortgage industry nationalization. To be sure, the Fed’s splashy "Sunday Night Special" bailout of Bear Stearns is rather trivial in both its implications and consequences when compared to Thursday’s quiet coup.
I have my own hunches about the rise and inevitable fall of the GSEs. I’ve always assumed that the Greenspan Fed was pleased (relieved?) to watch Fannie and Freddie morph in the early '90s from conservative mortgage insurance providers to aggressive bank-like lending institutions and market operators. GSE credit creation (and timely market interventions) worked greatly to alleviate the forceful economic headwinds created by an impaired banking system...
I also have a hunch with regard to Alan Greenspan's now infamous prodding, when he was Fed chairman, of households into adjustable-rate mortgages. I think he recognized clearly the degree to which the impaired GSEs (and their scantily capitalized counterparties) had become acutely vulnerable to a rise in market yields. As the Maestro, his interest-rate policies (market manipulations) orchestrated a massive shift of interest-rate risk from the financial sector to the household sector. In the process, however, recklessly low interest rates spurred unprecedented mortgage lending and speculative excesses that today imperil borrower, lender, leveraged speculator and system stability alike...
After first reaching $2 trillion in 1999, Fannie and Freddie’s combined books of business surpassed $5.0 trillion in January. This "book" increased $638 billion, or 16%, last year, in what will surely be the greatest transfer yet of risky mortgage credit to the GSEs (only to be greatly outdone in 2008). Interestingly, OFHEO, Washington politicians, and Wall Street analysts are keen to play a dangerous game pretending that there is limited risk in guaranteeing MBS (as opposed to the obvious risk associated with mortgages retained on their balance sheet). The absurdity of Mr Lockhart stating that the GSEs will be in a position to take on an additional $2 trillion of mortgage risk this year is simply incomprehensible. Keep in mind that the GSEs are on the hook for the "timely payment of principle and interest" on more than $5 trillion of American mortgages - and counting … Such obligations will, in the post-bubble era, prove untenable...Well, where are our "populist" statesmen today? The average American is getting slammed by rapid inflation in the prices for fuel, food, healthcare, education and other basis necessities. He was duped into various dangerous mortgage products to purchase homes with, in many cases, grossly inflated market values. Millions are in the process of losing virtually everything.
The average American was also duped into various risky investment products, while the bursting of bubble markets will leave him dreadfully unprepared for retirement. Now, he is seeing the returns from his savings crushed by the melee to bailout Wall Street "money changers" and speculators. Over the coming months, millions will lose their jobs with the inevitable adjustment and realignment to cope with post-bubble realities. And now, apparently, the American taxpayer is to sit back and watch his contingent liabilities balloon (even further) with the nationalization of the US mortgage market.
I understand perfectly the motivation Wall Street, the administration and the Fed have in blindly throwing the kitchen sink at this unfolding crisis. These are indeed scary times bereft of solutions. I am certainly familiar with the view that bailing out Wall Street and the speculators is medicine necessary to stabilize the system. But not only is this approach both inequitable and unethical on moral grounds, it is my view that such endeavors will prove only further destabilizing for the system overall...
Surely, policymakers were keen to mete out some punishment on the increasingly destabilizing "systemic risk trade" (shorting stocks, bonds, credit derivative indices, buying bearish derivative products, etc.), but the upshot was only further destabilization.
News that the GSEs were back in the game in a big way added to an already highly unsettled situation for myriad sophisticated trading strategies. But before getting too excited about the spectacular short-squeeze, keep in mind that shorting has become an instrumental facet of leveraged speculator trading strategies - and, really, contemporary finance more broadly speaking. And the disintegration of an ever increasing number of hedge fund and Wall Street strategies, as I’ve written previously, remains at the heart of deepening monetary disorder.
Not surprisingly, the Fed could not risk a Bear Stearns failure - not with all of its derivative, repo and counterparty exposures. It really was not a difficult fix. Yet the rapidly lengthening line of vulnerable non-bank lenders (Thornburg, CIT Group, and Rescap come immediately to mind) and hedge funds will pose a greater challenge. There are some very substantial balance sheets at risk and significantly more "de-leveraging" in the offing - and the big banks will have no appetite.
The S&P500 is down a modest 7% from the much-changed financial and economic world of one year ago. While having little impact on the unfolding credit crisis (or home prices), policymakers have thus far largely succeeded in sustaining inflated US stock prices. But, in reality, the profound deterioration in the US and global credit backdrop has greatly altered prospects for the vast majority of companies, industries, and the US and global economies more generally.
Unsustainable credit
Despite any number of policy actions and all the good intentions imaginable, there is absolutely no way that the US financial system will now be capable of sustaining either the (pre-bust) quantity of credit or the uniform flow of finance that levitated bubble economy asset prices, household incomes, corporate cash-flows, "investment" spending or consumption.
Huge sections of the credit infrastructures (notably throughout Wall Street-backed finance) are inoperable and discredited. Prominent monetary processes have been broken and the resulting flow of finance radically revamped.
Prospective credit and financial flows will prove insufficient for scores of companies, as well as for state and local governments and various entities all along the economic food chain. Enormous numbers of business downsizings and failures - many by companies that thrived during the bubble era - will lead to huge losses of jobs and incomes (many at the "upper end" where the greatest excesses transpired)...Nationalization will prove a further blow to already fragile confidence...

3-28-08
Sacramento Bee
Home Front: Sacramento-area home builders play it cautious...Jim Wasserman
http://www.sacbee.com/103/story/817589.html
Sacramento-area home builders are being extraordinarily cautious this year about starting new homes. That's evident in the newest count of building permits taken out at area city halls.Home builders in El Dorado, Placer, Sacramento and Yolo counties are pulling back at more than double the statewide average rate, seeking only 589 building permits to start new houses, condominiums and apartments in January and February. That compares with 1,833 permits the same time last year, the Burbank-based Construction Industry Research Board reports.In Yuba and Sutter counties, builders got 92 permits during the first two months of 2008. The same time last year they took out 234 permits. March figures aren't available yet...jobless numbers in the capital region are up nearly one percentage point over February 2007...Half or more of the region's homebuyers are choosing homes repossessed by banks. And the number of foreclosures that will lead to more bank-owned inventory for sale has not slowed.
This year's slowdown has builders worried statewide that government approvals for their newest subdivisions will expire before they get a chance to start building in them. They're pressing the Legislature to pass Senate Bill 1185, which would extend the life of California's existing subdivisions for two years. A similar bill passed in 1996, at the height of the state's last housing downturn..."What we're seeing, frankly, is that builders aren't willing to take any forward-looking risk at this time," says Gregory Group owner Greg Paquin. He says builders are making sure their buyers are serious and aren't starting construction until they're sure the deal won't be canceled.
Auctions rage on
Less than a year ago when the first big foreclosed-home auction came to Sacramento's Cal Expo, hundreds of bidders registered to buy 107 houses.Now, whenever Irvine auction giant Real Estate Disposition Corp. comes to town, there are almost four times that many. The firm's newest auction of Sacramento-area bank repossessions at Cal Expo is scheduled for April 19-20.
Bidders will have a crack at 397 homes. And that's just the Sacramento region. In total, more than 1,500 houses in Sacramento, Stockton, Merced, Fresno, San Jose and Oakland will go up for auction in April and early May...
REDC, which did big business in home auctions during the 1990s downturn, is really going to town in the current housing slump. A look at its auction calendar shows nearly 300 homes being auctioned this weekend in New York, New Jersey and Massachusetts. Starting next week the firm's auctioneers will unload 1,500 more in Southern California and 1,000 in Florida. More "huge" auctions are planned in May in Atlanta, Denver and Minnesota, the firm says.
What's it all mean for the market? Experts talk about a forest fire clearing out the underbrush so the green grass of a healthier market can reappear. This is the forest fire...
Rates edge down again
Finally, interest rates continued their downward drift for the second week in a row, falling to a national average of 5.85 percent for a 30-year fixed-rate loan. That's down from 5.87 percent last week, reported federal mortgage giant Freddie Mac.
Rates averaged 5.80 percent in the West, according to the firm's weekly survey.
The new rates mean lower borrowing costs at the same time Sacramento-area real estate agents and mortgage brokers are reporting multiple bids for homes priced in the $200,000 range.
Thirty-year rates reached their lowest point of the year, 5.48 percent, the week of Jan. 24. This time last year, they averaged 6.16 percent.
Bakersfield Californian
Party vigilance falls to neighbors...JOHN COX
http://www.bakersfield.com/102/story/401430.html\
Leticia Avila’s blood pressure plummeted when she saw what partyers had done to her south Bakersfield home. Blood and spray paint stained her upstairs bedroom. Beer bottles littered the kitchen. Her fence had been partially torn down and many of her windows shattered. The scene was all the more shocking to Avila because she had put the home up for sale only about a month before, and was living just a few blocks away when police and neighbors say a large, unruly party broke out at the house.
By the time police arrived to break it up, a young man had been beaten unconscious and two others were badly hurt.
“It can’t continue like this,” she said.
But continue it has. In March, young people staged at least four large illegal parties in empty homes around Bakersfield, including the one March 2 at Avila’s home in the 5100 block of Yellow Rose Court, near Monitor Street and Pacheco Road.Youths partying in vacant houses is nothing new. What’s new, local authorities and real estate people say, is that the troubled housing market has widened the selection of empty homes, and so the parties are taking place in nicer, larger homes in more affluent neighborhoods...
3-28-08
Stockton Record
Realtors membership plummets
Decline attributed to market, internal disillusionment...Bruce Spence
http://www.recordnet.com/apps/pbcs.dll/article?AID=/20080328/A_BIZ/803280317/-1/A_BIZ
The Central Valley Association of Realtors, a trade group covering Stanislaus County and much of San Joaquin County, was expecting a huge membership loss this year as more and more agents dropped out of the sales market. But instead of an expected drop from 2,900 to 1,700 year to year, the association, which mainly provides educational services and lobbying efforts, has seen membership shrivel to about 1,200...
3-29-08
North County Times
FALLBROOK: Homeowners upset by 'downsizing' plans...TOM PFINGSTEN
http://www.nctimes.com/articles/2008/03/29/news/inland/fallbrook/eb34fdd06717a74c88257419007b7544.txt
Homeowners in the new Shady Grove subdivision said Friday they were concerned that their upscale houses will plummet in value if the developer of the neighborhood is allowed to shrink the size of most of the homes that are still in the planning stages.Meanwhile, real estate industry analysts said the decision by KB Home to downsize the Shady Grove houses is just the latest example of a regional trend.
Those who already paid top dollar for custom-quality homes in the neighborhood say they're unhappy with the idea of smaller, cheaper homes filling up the rest of the subdivision.
Shady Grove resident Mickie St. Pierre said Friday that the 3,285-square-foot home she and her husband bought there cost more than $700,000 last year. After extensive upgrades, she estimated it would now be worth about $1 million, if the market recovered to where it was before the downturn.While it is uncertain what effect the smaller houses would have on the value of existing homes in the development, St. Pierre said she cringes when she thinks about it.
"You're talking about homes right around the corner that would go for $300,000 or $400,000, so (ours) would probably go down into the $700,000s or $800,000s," she said. "It's a huge loss."
Nicole Dennison, president of the Shady Grove Homeowners Association, said she and her husband bought their "dream home" at the hillside development last year, and that they were dismayed by the builder's plans for plainer, cheaper homes.
"I'd love to see KB Home stick it out and keep offering the original models they advertised," Dennison said. "I understand that it's business, but they'll cut the legs out from under the homeowners. (The owners) will never recoup what they've put into these houses"...Alan Nevin, an analyst for real estate tracking firm MarketPointe, said Friday that the Shady Grove case "is not isolated at all."
He said builders who replace original floor plans in their developments with smaller homes are usually trying to sell all the lots quickly.
"The reality is that firms like KB Home will probably wind up building those new (smaller) homes and making little, if any, profit, just to use up the lots," said Nevin. "In the world of publicly held builders, land is a liability, not an asset, so they try to remove themselves from heavy lot positions, and one of the ways they can do that is by downsizing their homes."

Harbingers of spring include the arrival of the swallows and the departure of the Sandhill cranes. The article below, about idle railcars, forgot to mention another harbinger of this spring viewed Friday while waiting for a frieght train to pass through town: a man, riding a flatcar between rolls of steel.

Bill Hatch

3-30-08
Modesto Bee
Weak economy slows cargo, idles railcars...SUSAN GALLAGHER , Associated Press Writer...3-28-08
http://www.modbee.com/business/story/253184.html
CRAIG, Mont. — BNSF Railway Co., the nation's top hauler of container rail freight, is parking miles of railcars in Montana and elsewhere because there isn't enough freight to keep them rolling...
The cars parked are the type that haul cargo from ships on the coast to points inland, mainly imported goods - an area that's starting to slow down due to the weak economy. Analysts say transportation usually is among the first sectors to show signs of a downturn in the economy and with Americans feeling pinched - employers eliminated 63,000 jobs last month amid declining consumer confidence - it could be a while before the idle cars move.
"If you take a look at transportation, both trucking and rail, you will see that things started softening last summer," said Arnold Maltz, associate professor of supply-chain management at Arizona State University. "The reason you are seeing all those cars parked is that the consumer economy translates into slower imports."...
Union Pacific Railroad spokesman James Barnes said the Nebraska-based company's intermodal business is "just a little down, but that's not unusual for this time of year." ...
One of the nation's leading trucking companies, Schneider National in Green Bay, Wis., says it believes a freight recession began about 20 months ago, well before signs of a downturn closed in on consumers...
Trucking companies are in a unique position. They often compete with railroads for long haul contracts, while also carrying rail freight from the nearest railhead to its final destination...
In Long Beach, Calif., home of the nation's busiest port complex with Los Angeles, the movement of goods has been somewhat stagnant...
While retailers have imported less goods to be hauled by rail or truck nationwide, exports leaving Long Beach rose as the weak dollar strengthened overseas purchases of U.S. goods, Pope said. Rising export volume - including grain and wheat shipped by rail - helped balance falling container imports for most of last year...

In his history of the Great Crash, economist John Kenneth Galbraith noted, “Congress was concerned that commercial banks in general and member banks of the Federal Reserve System in particular had both aggravated and been damaged by stock market decline partly because of their direct and indirect involvement in the trading and ownership of speculative securities.

“The legislative history of the Glass-Steagall Act,” Galbraith continued, “shows that Congress also had in mind and repeatedly focused on the more subtle hazards that arise when a commercial bank goes beyond the business of acting as fiduciary or managing agent and enters the investment banking business either directly or by establishing an affiliate to hold and sell particular investments.” Galbraith noted that “During 1929 one investment house, Goldman, Sachs & Company, organized and sold nearly a billion dollars' worth of securities in three interconnected investment trusts--Goldman Sachs Trading Corporation; Shenandoah Corporation; and Blue Ridge Corporation. All eventually depreciated virtually to nothing” ...

Scholes’ and Mertons’ fundamental axioms of risk, the assumptions on which all their models were built, were wrong. They had been built on sand, fundamentally and catastrophically wrong. Their mathematical options pricing model assumed that there were Perfect Markets, markets so extremely deep that traders' actions could not affect prices. They assumed that markets and players were rational. Reality suggested the opposite—markets were fundamentally irrational in the long-term. But the risk pricing models of Black, Scholes and others over the past two or more decades had allowed banks and financial institutions to argue that traditional lending prudence was old fashioned. With suitable options insurance, risk was no longer a worry. Eat, drink and be merry...

That, of course, ignored actual market conditions in every major market panic since Black-Scholes model was introduced on the Chicago Board Options Exchange. It ignored the fundamental role of options and ‘portfolio insurance’ in the Crash of 1987; it ignored the causes of the panic that in 1998 brought down Long Term Capital Management – of which Scholes and Merton were both partners. Wall Street blissfully ignored the obvious along with the economists and governors in the Greenspan Fed.

Financial markets, contrary to the religious dogma taught at every business school since decades, were not smooth, well-behaved models following the Gaussian Bell-shaped Curve as if it were a law of the universe. The fact that the main architects of modern theories of financial engineering—now given the serious-sounding name ‘financial economics’—all got Nobel prizes, gave the flawed models the aura of Papal infallibility. Only three years after the 1987 crash the Nobel Committee in Sweden gave Harry Markowitz and Merton Miller the prize. In 1997 amid the Asia crisis, it gave the award to Robert Merton and Myron Scholes...

The nature of the fatally flawed risk models used by Wall Street, by Moody’s, by the securities Monoline insurers and by the economists of the US Government and Federal Reserve was such that they all assumed recessions were no longer possible, as risk could be indefinitely diffused and spread across the globe... F. William Engdahl, The Financial Tsunami, http://www.globalresearch.ca

The community was shaken Thursday by the news that County Bank (corporate headquarters in Merced) was experiencing difficulties. It's stock had lost 90 percent of its value in two years, down to $3.76 a share on Wednesday, having lost half its value from the previous day. The CEO retired.

With the exception of a rather dramatic graph on the first page -- a jagged descending line showing the drop in stock price -- the McClatchy Chain covered the story as a momentary "blip." It called upon Valley economic gurus Tappan Munroe and Lon Hatamiya (former state commerce secretary under Gov. Gray Davis) for perspective. Munroe's insoucant metaphor, a "souffle with the air slowly leaking out," aptly caught the perspective of our witless Valley economic gurus.

But, that wasn't, and no doubt isn't, the end of the County Bank story. On Saturday, McClatchy reported that the bank stock had rebounded an astounding "72 percent," to $6.48. Problems over? A local builder, both a stockholder and client of County Bank, expressed his "personal opinion" that the bank is "very strong and very well-managed but the (real estate) values declining as rapidly as they did -- it just caught them by surprise."

McClatchy's Modesto outlet published a reassuring story Monday to the effect that local commercial banks didn't invest in subprime home loans and, while developers aren't always paying their loans at the moment and auto loans are a problem, their portfolios are adequately diversified to withstand the fallout from the general collapse of real estate values and foreclosures.

We'd like to go on record as saying that, beyond the stock price and information from public bank documents about its losses, we don't believe a word McClatchy has written about the problem. And the unasked questions are too numerous to list, but one could begin with the compensation for the retiring CEO, compensation for the economic gurus, was it involved at any stage in bundling subprime loans, and how will its losses affect it local agricultural lending this season?

What has happened is a massive loss of confidence, the end of every speculative bubble since the Dutch Tulip. We recall the early boosting of the bubble in Merced, when the same local builder was managing the reelection campaign of former state Sen. Dick Monteith, then claiming to the "real Mr. UC Merced." The builder and his candidate was "confidently" claiming UC Merced was a "done deal" when, in fact, as they knew well, it was not. So, forgive us for our skepticism that the local finance, insurance and real estate industry, bought politicians and McClatchy "were caught by surprise." The only real local question is: Who got to the souffle before it went flat?

The predatory lending practices that have caused a world credit crisis as well as our local crisis, were done here face-to-face by local lenders together with local realtors to local and speculative buyers. Judging by the rate of foreclosures in the north San Joaquin valley, one of the highest rates in the nation, there was an enormous amount of fraud committed here. In fact, it might be said that today the area is floating on a sea of "Liar Loans."

From the incredible amount of lying behind UC Merced, in which the local newspaper was thoroughly involved, to the rise and fall of the real estate value souffle, to this unhappy news about County Bank, there has been fraud, political manipulation, wholesale denial of environmental law and regulation and public process laws on the local, state and federal level, and a pattern of harassment of members of the public who asked any questions. This deceit has been broadly spread among what passes for "leadership" in Merced -- from the builder-politician to the Great Valley Center, UC regents and administrators of UC Merced and their boosters, municipal and county government, state and federal legislators, landowners, developers and lenders.

Saddest of all, few if any of the perpetrators regarded this as fraud or deceit. It was just good business. Alchemical formulas emanating from the nation's financial centers "proved" that risk was not risk and the more bad loans made the better. There were a few dissenting voices, but they were ignored as being, at the least, unpatriotic.

Local legacies of local greed include: a campus born with "complications," tremendous destruction of regional natural resources and wildlife habitat, the worst air quality in the nation, decreasing water quality and supply, local governments with swollen salaries for elected officials and department heads and shrinking budgets, unfinished subdivisions with empty houses and nervous residents, shaky banks, political corruption, bad news for the newspapers to cover over as best they can, and the same old compulsion to boost and to deny.

Badlands Journal editorial board
------------------

3-20-08
Merced Sun-Star
County Bank parent company anticipates first loss
CEO Thomas Hawker announces that he will step down when a replacement can be found....LESLIE ALBRECHT
http://www.mercedsunstar.com/167/story/190331.html
Shares of Capital Corp of the West, the Merced-based parent company of County Bank, were hammered Wednesday following news that the company expects to post its first-ever yearly loss.
Capital Corp said it anticipates it will lose $4 million for 2007.
Shares were trading at $3.76 -- a seven-year low -- when the Nasdaq market closed, a 64 percent decline from the day's opening price. The one-day percentage drop was the largest recorded on any of the major U.S. stock exchanges Wednesday. A year ago, Capital Corp's stock traded at $26.55.
The company blamed its anticipated loss on "the rapid decline in real estate values in California's Central Valley in the fourth quarter of 2007." It was then that Merced led the nation in home-value depreciation, with prices plunging 19 percent between 2007 and 2006, according to the Office of Federal Housing Enterprise Oversight.
The drop in real estate values means the collateral backing County Bank loans is worth less than it was when the loans were made one or two years ago. Capital Corp must now reclassify those loans as riskier. That, in turn, means the bank must back the reclassified loans with more money than what's required to back more secure loans -- money that comes directly out of Capital Corp's revenue stream, Smith explained...
The loss isn't tied directly to the subprime mortgage meltdown, he added, because County Bank doesn't make many home mortgages or invest in subprime loans. However, the company does lend money to developers buying land, and that land is less valuable than it was a few years ago. "Even though the guy is still paying his loan, by federal law, we have to downgrade the loan because the quality of collateral has gone down," said Smith.
Capital Corp's current problems were foreshadowed in the summer of 2007 when the company reported that a foreclosed loan to a housing developer had put a $5 million dent in its quarterly income compared with the previous year...

3-21-08
Merced Sun-Star
Bank's shares bounce back 72%
Analyst says volatility a reflection of economic conditions and lower Valley real estate values...LESLIE ALBRECHT
http://www.mercedsunstar.com/167/story/191875.html
Capital Corp of the West, the Merced-based parent company of County Bank, saw its stock rebound strongly Thursday, shooting up 72 percent from the seven-year low it hit earlier this week.
That drop had come after the company announced its first-ever yearly loss. Capital Corp expects to post a $4 million loss for 2007, the result of plunging real estate values.
At the Nasdaq's market close on Thursday, Capital Corp's stock price had risen to $6.48 a share, compared with $3.76 on Wednesday...
On Thursday Capital Corp put the focus on the present, announcing that unaudited internal financial reports from January and February show the bank has adequate capital on hand. The company had previously told federal regulators that it had fallen below what regulators consider "well-capitalized" status.
Joe Morford, a San Francisco-based analyst with RBC Capital Markets, said while the company's projected loss may be unsettling, it's typical of the problems California banks will probably face over the next year, especially in areas hard hit by the real estate slowdown.
"Six to 12 months from now, this is not going to look that unusual," said Morford. "We think there's going to be problems for several other banks both in the Central Valley and throughout the state."
He added, "A big part of the success of a community bank is the strength of its local market. Right now Merced and the Central Valley are having a real tough time. You're seeing the banks share that pain."...
On Wednesday, the company announced that it's forming a committee of board members to oversee bank operations; CEO Thomas Hawker will now report to the committee. Capital Corp also said it's hired financial advisers.
Those moves could be a sign that federal regulators are closely watching the bank, Morford suggested. "It looks like (regulators) are telling the bank that you need to raise capital, and there needs to be some changes in management," said Morford. "The regulators don't want to see County Bank fail, so they're doing what they can to ensure that doesn't happen."
Meanwhile, bank clients sounded a cautiously positive note Thursday. Local builder Bob Rucker, who's both a stockholder and client of County Bank, said he's watching intently. "The whole banking system is going through a major crisis right now with liquidity," said Rucker. "My personal opinion of the bank is that they're very strong and very well-managed, but the (real estate) values declining as rapidly as they did -- it just caught them by surprise."...

3-24-08
Modesto Bee
Valley's smaller banks eluding upheaval in financial industry
Area firms steer clear of most home loans, limiting fallout from crisis...BEN van der MEER
http://www.modbee.com/local/story/248088.html
While giant banks such as Bear Stearns implode as an indirect result of the housing crisis, many of the community banks based in the Northern San Joaquin Valley report being largely insulated from such upheavals.
That's true even after last week, when Merced-based County Bank announced a $4 million loss in 2007, and then saw its stock lose more than half its value in one day before rallying late in the week.
Jeff Burda, president of Modesto Commerce Bank, said most community banks don't make many home loans, including the subprime loans that prompted the recent housing meltdown...
Other banks, like County Bank, may have avoided subprime securities, but made substantial loans to commercial builders. With new housing at a virtual standstill, those builders aren't building, Burda said, and loans aren't being paid...
Credit agencies that monitor banks over time on the basis of criteria such as earnings and liquidity take a more measured stance.
Bankrate.com, a consumer finance Web site, gave five valley community banks, including County, Bank of Stockton and Farmers & Merchants, ratings of three or four stars -- the same ratings most banks receive, with five stars being the best, according to the site...

Chancellor Kang's humility, skills seen as good fit for UC Merced...MICHELLE HATFIELD
http://www.modbee.com/local/story/248077.html
MERCED -- Steve Kang has become a road warrior.
A different kind of leader
Carol Tomlinson-Keasey, who stepped down as founding chancellor to return to teaching, is remembered for her stiff demeanor and commanding presence. (After going back to the classroom in 2006, Tomlinson-Keasey quietly retired in June, moving to Georgia. She couldn't be reached for comment.)...
Kang said he believes the best leaders are those who earn trust by example.
"You have to be part of a team...
"(Tomlinson-Keasey) never really went to small events. Chancellor Kang goes to everything. I think that's why he's so popular among students," said Brenda Ramirez, a psychology junior.
Goals and plans... Focus on students urged...

Accomplishments
Getting UC Merced closer to permit approval from the Army Corps of Engineers for campus expansion and an adjacent university residence community
Starting a strategic planning process to guide the university's academic future
Drumming up community support for a medical school

Goals
Beef up student recruitment
Solve budget issues facing the campus, including lack of physical space for professors, students and research
Continue paving the road to a UC Merced medical school
Continue research initiatives among professors, focusing on issues specific to the Central Valley such as agriculture and water and air quality
Academic planning -- "Where are you going to be putting your resources? What do you want to be the best in the world at? You can't be the best at everything," UC President Robert Dynes said.

UC Merced Facts
Year opened: 2005
Number of students: 1,800
Number of employees: 884
Annual budget: $100 million
Size of campus: 18 buildings, 105 acres
Academics: 17 majors, 17 minors
Number of alumni: 76
Estimated amount of money generated by university: $1.2 billion since 2000 ...

Expansion compromise for UC Merced campus...Editorial
http://www.modbee.com/opinion/story/248069.html
It took six years for the University of California Board of Regents to choose where in the San Joaquin Valley to build its 10th campus. It's already taken more than seven years for UC to figure out how to position the campus and the adjoining community on its selected site east of Merced.
What was the hang-up? Limiting the damage to wetlands and to native plants and animals, such as the bald eagle, fairy shrimp and Colusa grass...
Finally, last year, some meaningful conversations started taking place among UC, the corps and two other federal agencies, the Fish and Wildlife Service and the Environmental Protection Agency. By October, the university announced it had a revised map that reduced the size of the campus and the placement of the community. Last month, the university submitted its formal permit application, which triggers an environmental review process that typically takes 12 to 14 months...
UC needs the Corps' permit to continue with its long-term campus plans, but it is just as essential that there will be shops, restaurants and other amenities close by for students and staff. Some current students and a number of prospective students complain about the isolation of the campus and how far it is into town.
Downsizing the campus by 100 acres does not reduce the academic choices or activities that UC Merced will offer. In fact, it is appropriate that the campus -- which already has won awards for environmental design and energy conservation -- should have a footprint that does the least possible damage to the environment.
It took too long, but we commend university officials and regulators for reaching what appears to be a good compromise.

If anyone can fix (or help) UC, it's this guy...Short Takes
http://www.modbee.com/opinion/story/248145.html
The University of California system -- 10 campuses, five medical centers and three national laboratories -- is at a crossroads. With its leadership stepping down after five years; with UC's share of the state budget declining; with the economy changing rapidly; and with a need for innovation greater than ever, a new UC president will step into an extremely challenging environment. On top of these long-term issues is the need to recover from the 2005 controversy over administrative bloat and bonuses, stipends, relocation packages and other forms of unreported compensation to top administrators. Then there's California's short-term budget crisis, which will likely require increases in student fees and rethinking of financial aid. Fortunately, in Mark Yudof, a search committee has tapped the right person to serve as the next University of California president. This first-rate constitutional scholar and teacher has served as chancellor of the University of Minnesota system (1997 to 2002) and the University of Texas system (2002 to now). The UC system really needs someone from outside the system to bring in fresh ideas, fresh personnel and shake up old ways of doing business. Yudof is ideally suited to do that. An extremely effective manager, imaginative thinker and savvy political leader, amazingly he still finds time to teach. He knows how to deal with politicians and the state budget process, create endowed professorships, increase financial aid for students and encourage research partnerships. The UC system needs this kind of president. In a reduced and changing presidency, Yudof is perfect. The regents vote Thursday. They should approve him with unanimous enthusiasm.

To get the qualifications out of the way, we don’t like many of the political positions taken by Rep. Dennis Cardoza, Shrimp Slayer-Merced. His record on environmental law has been a disgusting sellout to finance, insurance and real estate special interests in his district and his stint as the rear end of the Pomboza (head having been Rep. Richard Pombo, Buffalo Slayer-Tracy) was disgraceful. Nor do we imagine those positions are likely to change.

Having said that, we can very well understand why a California congressman, any California congressman, would move his family to Washington, DC. There have been examples in Valley political lore – Harlen Hagen, John McFall and Tony Coelho come to mind – in which the congressman lost touch with the district, got too involved with Beltway corruption and fell from power. If memory serves, something similar happened to Jeffrey Cohelan of Oakland, defeated by Ron Dellums. John Burton got all screwed up in Washington and lost his seat. Phil Burton managed to keep the schedule and rise to Majority Whip, but none of the above could match Phil Burton for discipline, energy and intelligence – least of all Cardoza.

But it must be terribly hard to keep a family together under the circumstances of being a California congressman and rather than bash him for his move, we give him this qualified praise. Anyone trying to keep his family together these days deserves it.

He seems to have pulled a few strings with cronies in Maryland politics, like Rep. Steney Hoyer, his old mentor, and with the University of Maryland, his alma mater, to get his wife a decent medical job. Don’t people often ask congressmen to pull strings for them? Isn’t that one of the major functions of a congressman?

Presumably, Cardoza will return to his district less often and become more engaged with inner-Beltway work like his new position with the Democratic Congressional Campaign Committee, revolutionized by Coelho before his fall, described in Brooks Jackson’s Honest Graft. But, as far as contact with his district is concerned, Cardoza was never much good at it anyway. His “townhall” meetings were absurd and he never has listened to much more than a handful of local plutocrats anyway. They’ll still have his cell phone number. This way, the public may be spared a dose or two of his bathetic vision.

It might be a public benefit if Cardoza showed up less often at his Merced offices on the third floor of the County administration building. Perhaps with less interference from the congressman, local administrators and elected officials could do a somewhat better job. At least this move opens the hope.

Of course, the media has been critical: they stand to lose a little direct access. However, those who have had direct access to Cardoza should reflect that it wasn’t much help, really. When Cardoza talks about politics, it is as boring as listening to a bull rider take 10 minutes to describe the six seconds he was on top.

The hot stuff is in the speculation about what will happen now. But, we don’t know the future. What we know is a congressman seems to be making an attempt to keep a family together, be a less absent husband and father. You can’t knock him for that. Perhaps he didn’t want his children to grow up with asthma, induced by the development he championed. So let him join the Cowgirl Chancellor Carol Tomlinson Keasey and all the rest of the fleeing rodents. Some people are simply too sensitive to deal with consequences. It’s a character thing.

Badlands editorial board

P.S. A St. Patrick Day's reflection on character -- One of North America's greatest 20th-century leaders, Mexican President Lazaro Cardenas, once told a biographer, as he was embarking from the Capitol on yet another 1,000-mile trip in his Willys Jeep to meet with rebellious citizens, that there was rarely anything he could do for his people in the post-Revolution economy, but he could at least be with them and try to encourage them. For Cardoza to keep his residence address in Merced County as a political convenience after holding a couple of "foreclosure workshops," sends the message to the residents of the district that, having been a political leader in the real estate boom and environmental destruction, he is unwilling to take the consequences of his actions that most of his constituents are helpless to avoid.

Whining for a medical school for UC Merced because the Valley has a physician shortage, he takes the one doctor -- his wife -- he might have been able to influence to stay in the Valley to a job in Maryland.

While we still praise him for trying to keep his family together and safe from the social and environmental fallout of the real estate boom and bust and environmental destruction he had so much to do with engineering on behalf of finance, insurance and real estate interests in various backrooms, starting with UC Merced, we don't think it is unfair to call the man a triple-dyed hypocrite.

When in the coming months top officials in county and city government retire, collect their pensions and whatever else they made on the boom and move away, we can add a new phrase to the local political lexicon: "Pulling a Cardoza."

Pulling Cardozas are certainly signs of the times. Another, which we saw yesterday afternoon, was a homeless person with baby stroller and earthly possessions camped in the alcove of the M Street entrance to the splendid offices once occupied by Ranchwood Homes, now up for lease, across from the courthouse park.

Loose Cheeks
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A member of the public recently directed the attention of Loose Cheeks’ intrepid reporter A.J. Gangle to the wild, wacky world of agbiz, beginning with the Merced County Farm Bureau's February 2008 newsletter, the New York Times and the Environmental Working Group's Farm Subsidy Database for a few enlightening items.

Item #1

Merced County Farm Bureau: "We farm. You eat."
We live in a diverse state that is able to produce over 350 different commodities under the most stringent regulations in our nation. California is the number one agricultural producing state. Of the top ten Ag producing counties, California claims eight, with Merced County ranked 6th in the nation. We are blessed with rich soils, available water, and climatic conditions that allow our family farms to be so productive. We hope this website will give you an insight into our industry and the men and women that are the face of our family farms here in Merced County.
http://www.mercedfarmbureau.com/DesktopDefault.aspx

"Family" means things to the Farm Bureau not always intuitively obvious to urban dwellers, for example, lot splits on ag land to create ranchettes. On p. 12 of the February Merced County Farm Bureau Newsletter,
http://www.mercedfarmbureau.com/pdf/February%202008%20Issue.pdf, the casual reader will find an ad by Century 21 Salvadori Realty, listing three parcels, two 20-acre ranchettes and an 18-acre ranchette. At least two of the three realtors representing the properties, two sisters from the Le Grand area, grew up in "family farming." One of them is a former Farm Bureau director. One ranchette already contains three houses. Another is listed as containing one house and a building site for another, although it is in an "organic"
walnut orchard. On parcels this size, all that is required is a building permit for a second house. The third 20-acre parcel of almonds and one "quaint" dwelling can be purchased together with an adjoining 20-acre parcel in the same varieties of almonds.

"Great income potential!" the ad says. Since it's not great income potential for farming, perhaps what is meant that it is good for more parcel splits and more smaller ranchettes. How long ago were these two 20-acre parcels one 40-acre parcel and then were split by permission of the County in as a favor to the "farming family" that owes it. Or was it a favor to the former family farming realtors?

Item #2

From the Merced County General Plan, Chapter 7:

http://www.co.merced.ca.us/planning/pdf/generalplan/chapter7/chapter7.pdf

2-23-08
Merced Sun-Star
Public Notice
PUBLIC HEARING... to consider: MINOR SUBDIVISION APPLICATION No. MS07-058 - Chris Robinson
http://www.legalnotice.org/pl/mercedsun-star/ShowNotice.aspx
"PUBLIC HEARING" A public hearing will be held by the Merced County Hearing Officer on Monday, March 10, 2008 at 8:30 a.m., in Conference Room 301 on the 3rd Floor, 2222 "M" Street, Merced, California, to consider: MINOR SUBDIVISION APPLICATION No. MS07-058 - Chris Robinson - To divide a 1,027.20 acre parcel into 3 parcels and a remainder resulting in parcel sizes of: Parcel 1 = 198.63 acres; Parcel 2 = 343.18; Parcel 3 =
165.25 acres, and Remainder Parcel = 320.14 acres under a parcel map waiver on property located on the east side of Highway 59, approximately 1/2 mile north of Youd Road in the Snelling area. The project site is designated Agriculture land use in the General Plan and zoned A-2 (Exclusive Agriculture). THE ACTION REQUESTED IS TO APPROVE, DISAPPROVE OR MODIFY THE APPLICATION. DG All persons interested are cordially invited to attend. Written comments are encouraged and should be sent to the Planning and Community Development Department, 2222 "M" Street, Merced, California 95340, prior to the hearing.
If you have any questions, please call the department at (209) 385-7654.
Sincerely, Robert A. Lewis Development Services Director Legal 08 -286 February 23, 2008

For recent arrivals here in the Foreclosure Capital of the West, what's happening here is that a local cattle baronet whose family exploited the Merced River for irrigation, exploited the river for aggregate, exploited the state for millions to try to reclaim the river after the mining, now seeks to exploit the river and the County by exploiting the river "viewshed" for a few luxury estates. Or perhaps it's all about conservation easements, yet another family adventure at the public trough.

6-26-07
Badlands Journal
http://www.badlandsjournal.com/?p=339
Red Menace over Merced
A rouge pall, like the Delta peat fires of old at twilight, hangs over Merced County.
According to Supervisor Mike Nelson, the “socialists” were out this morning at the supervisors’ meeting. A group advocating agricultural preservation were arguing against parcel splits for ranchettes between Gustine and Santa Nella.
And we thought we saw Eugene Debs highballing down the Santa Fe tracks last night.
The Badlands editorial staff investigated, and found at least one ringleader of the agland preservationists has a long history of affiliation with red front groups: the Merced County Chamber of Commerce; American Farmland Trust; the Merced County Farm Bureau; and California Women for Agriculture.
By contrast, Nelson was a union Atwater City fireman for nine years and now draws a public salary from Merced County of over $65,000 a year plus thousands a month in perks, benefits and retirement, beside what the San Joaquin Valley Air Pollution Control Board pays him to defend special interests from the peril of regulating the worst air pollution in the US. Nelson’s wife is a union public school teacher, drawing a public salary, health and retirement benefits.
We suggest Nelson look again at the red menace hanging over the county. If he can see through the merciless rightwing hypocrisy, he will find it is red ink caused by the reckless, uncontrolled growth approved by majorities of the indemnified supervisors and city councils beholden and in some cases directly benefitting from their ties to finance, insurance and real estate special interests that now control local government in Merced lock, stock and barrel.
Badlands editorial staff

Update: Merced County supervisors' salary is now $74,000 and Nelson is chairman of the board of Merced County Association of Governments, the local pork barrel for federal highway funds.

Item #3

The Merced County Farm Bureau's February newsletter expresses a number of straighforward views about serious issues in the Valley. The executive director wrote about water:

I started the month of February at a water forum sponsored by the City of Fresno. The information was plentiful but we need action, not more words. We need cooperation not litigation. Simply put we need more storage.

Although we're sure Merced's family farmers understood this and all that followed, we were a little mystified.
Action is not litigation and cooperation will produce more dams? There has always been great doubt in the circles traveled by the executive director that Merced County is a part of the state of California.

Item #4

The Valley View editor of the MCFB newsletter, writing about genetically engineered crops, opined that objections to their use and deregulation were "based solely on the fear of the unknown." Gene-drift is a "possibility," according to the author,and "is a legitimate concern that must be considered."

The Union of Concerned Scientists, UC Berkeley professor Ignacio Chapela, Jeffrey M. Smith (Seeds of Deception (2003), Frances Moore Lappe (Food First), Dr. Joseph Cummins, Dr. Wes Jackson (Land Institute), Dr. Arpad Pusztai and F. William Engdahl among many other responsible scientists around the world have been considering GE genetic pollution and a host of other problems arising from genetic engineering of food crops for nearly a decade. None of them, however, are Merced County family farmers, so what could they know?
Even the Catholic Church has spoken of biotechnology as a source of "new sins," but the Vatican Apostolic Penitentiary is a long way from Merced County.

3-10-08
Yahoo! News
Vatican lists "new sins," including pollution By Philip Pullella
http://news.yahoo.com/s/nm/20080310/hl_nm/pope_sins_dc
VATICAN CITY (Reuters) - Thou shall not pollute the Earth. Thou shall beware genetic manipulation. Modern times bring with them modern sins. So the Vatican has told the faithful that they should be aware of "new" sins such as causing environmental blight.
The guidance came at the weekend when Archbishop Gianfranco Girotti, the Vatican's number two man in the sometimes murky area of sins and penance, spoke of modern evils.
Asked what he believed were today's "new sins," he told the Vatican newspaper L'Osservatore Romano that the greatest danger zone for the modern soul was the largely uncharted world of bioethics.
"(Within bioethics) there are areas where we absolutely must denounce some violations of the fundamental rights of human nature through experiments and genetic manipulation whose outcome is difficult to predict and control," he said...Girotti, in an interview headlined "New Forms of Social Sin," also listed "ecological" offences as modern evils...

Item #5

The MCFB article, Understanding CEQA: Public Involvment is Key, got the right point in its title, but we felt strayed a bit lower in the story with advice like:

Contradictory, conflicting, conclusory, or inadequate responses or significant environmental issues need to be submitted in orally or in writing.

With some small experience with CEQA ourselves, we confess that we have absolutely no idea what this sentence means. A spot of editing might have helped, but the Farm Bureau probably couldn't bring itself to edit Sweet Potato Joe's daughter-in-law. And, who knows, perhaps Merced County family farmers know exactly what the sentence means.

Item #6

New York Times
Fairness on the Farm...Editorial
http://www.nytimes.com/2008/02/22/opinion/22fri3.html?_r=1&sq=conservation&st=nyt&oref=sl
ogin&scp=1&pagewanted=print
Against all odds, there is still hope that Congress will produce a halfway decent farm bill, one that increases spending for underfunded programs like food stamps and conservation while decreasing subsidies to rich farmers who have never had it so good.
The reason for hope is President Bush, who has been on the right side of the farm issue from the beginning and is threatening to veto any measure that resembles the stinkers produced by the House and Senate last year.
Some legislators are now scrambling for a better version. Tinkering around the edges will not do it.
Mr. Bush has two sound objections. First, the House and Senate bills, each costing about $280 billion over five years, are way over budget and include an array of gimmicky tax increases to make up the shortfall.
Even worse, the bills perpetuate an unfair, wasteful program of price supports and direct payments. Half the subsidies would go to farmers in just seven states producing a handful of crops — corn, cotton, rice, soybeans and wheat; two-thirds of the nation’s farmers would not benefit at all. Mr. Bush has complained in particular about provisions that allow subsidies to flow to farm families making as much as $2 million a year.
What makes these subsidies even more outrageous is that just when the rest of the country is sliding into recession, commodity prices are booming and big farmers are rolling in clover.
In a rational world, legislators would try to find the cuts Mr. Bush wants in subsidy programs, but little is rational when it comes to farm bills. While some influential members of the House have talked about stricter limits on wealthy farmers, Big Agriculture’s Senate friends say the cuts would have to come from conservation programs.
The food stamp program is not yet on the Senate chopping block, but it, too, is not home free. Congressional leaders may be tempted to see this year’s bill as a way to help farm state incumbents hold onto their seats. The dollar amounts are too large, though, and the fairness issues too stark, to stick with a broken system of farm subsidies.

Item #7

Environmental Working Group Farm Bill 2007: Policy Analysis Database --
http://farm.ewg.org/sites/farmbill2007/

Top Commodity and Conservation Programs in the 18th district of California (Rep. Dennis A. Cardoza), program years 2003-2005:

Rank Number of Beneficiaries Total

1 Cotton Subsidies
795 $74,723,391
2 Dairy Program Subsidies
709 $18,664,192
3 Corn Subsidies
1,315 $15,867,968
4 Rice Subsidies
139 $5,452,704
5 Wheat Subsidies
899 $3,750,842
6 Env. Quality Incentive Program
282 $2,419,418
7 Oat Subsidies
971 $523,545
8 Barley Subsidies
548 $453,254
9 Conservation Reserve Program
28 $185,179
10 Grasslands Reserve Program
2 $92,732
11 Wool Subsidies
18 $77,294
12 Sorghum Subsidies
172 $58,319
13 Safflower Subsidies
105 $48,407
14 Wetlands Reserve Program
2 $37,008
15 Sheep Meat Subsidies
2 $10,850
16 Sunflower Subsidies
1 $74

Total Direct Payments benefits in 18th district of California (Rep. Dennis A. Cardoza) totaled $31.2 million in program years 2003-2005.

Item #8

More on subsidized farmers no longer alive
Letters to the Editor
Fresno Bee
July 27, 2007
http://www.badlandsjournal.com/?p=369
Dear Sir or Madam,
The U.S. Department of Agriculture gets my inept federal bureaucracy of the month award for writing subsidy checks to 172,801 dead farmers totaling $1.1 billion dollars during the period from 1999 to 2005. This gives new meaning to the term “buying the farm.”
All the sordid details are available in a report from the Government Accountability Office located at http://www.gao.gov/new.items/d071137t.pdf.
Nineteen percent of the deceased subsidy recipients had been dead for seven years or more, while a whopping 40 percent had been dead for three years or more. Even more troubling, someone undoubtedly alive signed and cashed those checks given the considerable difficulty the dead have in signing checks.
There must be plenty of dead San Joaquin Valley farmers on the list given that we are the farming capitol of the nation. They must be chuckling somewhere in the Great Pasture in the Sky that they couldn’t make any money while living but managed to generate some green after they were gone.
Lloyd Carter

Item #9

9-12-07
Merced Sun-Star
Local growers in Washington to push farm bill…Michael Doyle, Sun-Star Washington Bureau
http://www.mercedsunstar.com/local/story/13780293p-14360810c.html
WASHINGTON…on Capitol Hill, the House Agriculture Committee is poised in coming days to divvy up billions of dollars in a new farm bill… With the House panel planning to write its farm bill over the course of three days next week, Teixeira and several dozen other organic farmers are taking a desperate stab at changing the course of federal agricultural policy. So far, success is elusive. Existing cotton, rice, wheat and corn subsidies would stay essentially the same, under the current bill written by the agriculture committee chairman, Rep. Colin Peterson, D-Minn. Federal crop subsidies totaled about $17 billion last year. The politically vocal American Farm Bureau Federation likewise supports Peterson’s stay-the-course approach to traditional subsidies, as does the National Milk Producers Federation. California at Davis agricultural economist Dan Sumner allies himself with California’s fruit and vegetable growers, who seek a bigger share of the farm bill. The bill coming before the House committee next Tuesday does boost some specialty crop funding. Even so, specialty crop advocates — and organic growers in particular — complain the current House bill shortchanges the fastest-growing sector of U.S. agriculture. “We are looking for a niche,” said Cindy Lashbrook, a Merced County organic farmer who grows blueberries and almonds near Livingston. “We’re looking to be legitimized, in a way.”

Item #10

7-26-07
Badlands Journal

California Sportfishing Protection Alliance lashes Valley agricultural pollution
Water Board Report Shows that Irrigated Agriculture Has Polluted the Delta and Most Central Valley Waterways
http://www.badlandsjournal.com/?p=359
For immediate release:
25 July 2007
(Stockton, CA) The Central Valley Regional Water Quality Control Board (Regional Board) has released a landmark draft report presenting the first region-wide assessment of data collected pursuant to the Irrigated Lands Program since its inception in 2003. Data collected from some 313 sites throughout the Central Valley reveals that: 1) toxicity to aquatic life was present at 63% of the monitored sites (50% were toxic to more than one species), 2) pesticide water quality standards were exceeded at 54% of sites (many for multiple pesticides), 3) one or more metals violated criteria at 66% of the sites, 4) human health standards for bacteria were violated at 87% of monitored sites and 5) more than 80% of the locations reported exceedances of general parameters (dissolved oxygen, pH, salt, TSS). While the adequacy of monitoring (i.e., frequency and comprehensiveness) of monitoring varied dramatically from site to site, the report presents adramatic panorama of the epidemic of pollution caused by the uncontrolled discharge of agricultural wastes.
The report is posted on the Regional Board’s website at:
http://www.waterboards.ca.gov/centralvalley/programs/irrigated_lands/index.html#Monito

Item #11

9-23-07
San Franciso Chronicle
Yes, San Francisco is in the land of cotton subsidies...Carolyn Lochhead
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2007/09/23/MNH1S5I9N.DT
L&type=politics
Los Banos, Merced County -- San Francisco is famous for its cotton farmers. Or at least one of them.
At last count, the largest California recipient of federal farm subsidies is the city's Constance Bowles Peabody, 88, a wealthy heiress of pioneer California cattle baron Henry Miller.
Peabody and her now-deceased brother George "Corky" Bowles, collected $2.4 million in cotton subsidies from 2003 to 2005, according to federal data compiled by the Environmental Working Group, which opposes the subsidies.
Actually, so does Philip Bowles, her son, who has run the family's farm operation for more than a quarter-century.
Asked why he should get subsidies, Bowles replied, "Why should anybody?"
A former Yale drama student who once made television commercials, Bowles operates the family's 13,000-acre cotton, alfalfa and tomato farm in Los Banos, where the city fathers erected a statue of his great-great-grandfather in the town plaza.
"The money that we do get from the government I look at as a form of liquidated damages," Bowles said as he drove through his fields, certain that the quality of his cotton and the efficiency of his farm would, if put to the test, obliterate his competitors in the Mississippi Delta and Texas...

Item #12

Where does Ol' Slippery John Pedrozo hang his hat, anyway?
Ol' Slippery got a free ride for a second term yesterday, so we thought to check where he lived, since you can't be too careful with the peoples' elected representatives in Merced County. Ol' Slippery lists his address at 2222 M Street, Merced CA.
Wait a second!
Unless the County administration building has some sort of special status like Washington, DC or the Vatican, it's in Supervisor Crookham's district, not the district Ol' Slippery is supposed to represent.
What's he got in his office up there on the third floor, a cot and a hibachi? Does he barbecue on the roof on pleasant evenings? We didn't even know they had showers in the administration building. Does he spend quality time with the Old Shrimp Slayer, Congressman Cardoza, who also has an office in the building, barbecuing tri-tip while the Slayer cooks the beans? Or do they fry up a batch of fairy shrimp out of the freezer, supplied by some of the Slayer's best contributors?
Ol' Slippery apparently doesn't have a decent Yesman to guide him in the niceties of local government etiquette -- like not sleeping in his office and stuff. County Topflak Mark Hendrickson is obviously too busy dogging the heels of Supervisor Mike Nelson, a real contender for Champion of the Rightwing ... what, exactly?

Item #13

Jess Brown and his Porkbarrel Band of Renown have concocted yet another transportation document, this time on an expressway between Atwater and Merced -- for April Fools' Day release.
It is called the Atwater Merced Expressway Draft Environmental Impact Report and it is a plan to make a plan to make a plan to make a plan ... to make pork.

Item #14

A great big ATTABOY! to Tom Grave for making it to the big time with his recent appointment to the Citizens Advisory Committee of Merced County Association of Governments. Tom has made it out of the pits where the public sits and into the hallway outside the backroom. He'll be close enough to smell the smoke now.

Item #15

Another great big ATTABOY to Sonny Star and the Gigolo Press of Merced for a fine column by Steve Cameron in today's mega-sports section-in-a-zillion colors. Cameron is a man of deep convictions, one of them that Sonny Star, the New York Times and the rest of the US press never writes an article to sell more papers.
Since the waning years of the 19th century, there have been two ways newspapers make money. The old-fashioned way was to increase circulation because that was the first way to increase advertising revenues back in the days of actual media competition in the US. The modern way newspapers make money is to monopolize
advertising regions after driving out competition. Big Mama McClatchy's house runs most of the callperson press in the Valley. Sonny makes it, to the extent Sonny does make it, on a captured local business community that HAS to advertise in the local gigolo press.
Don't get us wrong. We are great fans of Cameron's exploding sports section. It's real Big Time. Livingston goalie eyes the pros. Hot stuff. But examples comes to mind to disprove Cameron's claim.
When Riverside Motorsports Park was buying huge amounts of advertising with the paper, Sonny Star endorsed the project. When that advertising stream ended (about the time a lot of real estate advertising was also ending), Sonny did a real number of RMP -- a day late and a lot of legal trouble short of doing a timely job of informing the public and decision makers on RMP dirt.
And then, of course, there were the years of special UC Merced inserts, during which Sonny Star mainlined UC Bobcatflak.
Not to mention the bevies of comely young realtors right out of high school posing in the real estate inserts back in Flip City Days.
Hey, maybe we could bring back the lasses with a Flip City Days Festival to brighten up tours of brand new empty houses. Sonny Star should get working on it.

3-8-08
Merced Sun-Star
Please trust this about our sports section...Steve Cameron
http://www.mercedsunstar.com/194/story/174299.html
Hey, this is an historic election, so...
...I've been in this business a long time, and I can tell you without a question of doubt that we don't ever make editorial decisions while wondering if a few more people might plunk 50 cents into a box.The only time we sell extra papers is well-advertised, and it's because you ask for it.
For instance, if a local high school wins a district football championship, we might print a special eight-page commemorative edition. Maybe. But that's it.
After hearing that woman on CNN, I'm not sure the public actually will believe this, but I want it on record.
We make editorial decisions for lots and lots and lots of different reasons. Selling a dozen extra papers at Save Mart ain't one of them. And never will be.

Item #16

Feral shopping cart whitewash.
Everybody in town, except Sonny Star, knows those shopping carts are as wild and willful as our exploding alley cat population. But, Sonny, always ready with a way to tranquilize the population, is claiming today that human agency is involved in the dispersal of shopping carts, complete with the usual lying photos of shopping carts bathing in the creek and resting against street signs and such.

3-8-08
Merced Sun-Star
Despite '03 law, shopping carts still clutter landscape...DOANE YAWGER...3-8-08
http://www.mercedsunstar.com/167/story/174311.html

But the people know the real story on those criminal shopping carts. You hear them cruising our sidewalks at night and you turn out the lights and cringe because here they are again to rob and steal with their big black garbage bags and rattle off down the alley.
People don't talk much about getting mugged by shopping carts for fear nobody would believe them. And that is the great advantage our predatory feral shopping carts enjoy in this town. They are highly organized into gangs, each with its own distinctive colors, easily identified by police if they wanted to look.
Feral shopping carts represent the largest threat to law and order Merced has ever seen.
In the end, they will pick us clean.

Item #17

Local casino in the offing?
The rumble close to the ground is that the Madera/Highway 99 casino is a catspaw. The rumor is that state Legislature, abused for more than a decade by bloviating local real estate special interests spouting hyper-inflated metaphors from "high-tech, bio-tech engine of growth" to a suckling baby, has been combing the vicinity for a Native American tribe -- any tribe -- to sell the campus to for a dollar. Meanwhile big supporters for the campus are rumored to be willing to step aside because they already cashed in on growth stimulated by the campus and because the whining brat has become a civic embarrassment.

3-7-08
Merced Sun-Star
UC Merced leaders plead for budget mercy
Assembly panel meets on the campus to hear university's stance on funding...VICTOR A. PATTON
http://www.mercedsunstar.com/167/story/172967.html
UC Merced Chancellor Steve Kang on Thursday likened the university to a "baby" -- one that still "needs milk" and tender loving care to survive.
Translation for state legislators: UC Merced "cannot afford any budget cuts"...

Item #18

Great big ATTAGIRLS to the staff of the East Merced Resource Conservation District for printing a brochure in which the inside is upsidedown from the outside. Is it a metaphor or just another sincere expression of incompetence?

From The Endangered Species Coalition:

You can help family farmers protect endangered plants and animals on their land. Please call your Member of Congress and ask them to support the Endangered Species Recovery Act and incentives for landowners to save endangered species.

Help support family farmers who protect endangered species habitat.

Congress has a great opportunity to help at-risk wildlife, with a new bill called the Endangered Species Recovery Act (S. 700/H.R. 1422). This legislation will provide farmers, ranchers, family forest owners and other landowners with the financial tools they need to protect the hundreds of endangered animal and plants.

The Senate has already passed the companion bill in the Senate Farm Bill tax package. This means that the time is ripe for the House of Representatives to move this important piece of legislation as quickly as possible.

Call your member of Congress and ask them to support the Endangered Species Recovery Act. The Capitol Switchboard is (202) 224-3121. Ask for your Representative's office.

Polls show that Americans overwhelmingly support the Endangered Species Act. However, the Act is chronically under-funded in regard to recovery planning and habitat restoration--especially on private lands. More funding is needed to save America's endangered wildlife.

For more information, visit www.stopextinction.org/farmers

Thanks for your help to protect endangered species,

Leda Huta
Executive Director, Endangered Species Coalition

The Endangered Species Coalition (ESC) is a national network of 380 conservation, scientific, sporting, religious, humane, business and community groups across the country. Through public education, scientific information and citizen participation, we work to protect our nation's wildlife and wild places. The ESC is a non-partisan coalition working with concerned citizens and decision makers from all parties to protect endangered species and habitat

Endangered Species Coalition
PO Box 65195
Washington, DC 20035
(202) 320-6467

www.stopextinction.org

Organizing / Planning Meeting in Tracy on MARCH 6

Public Hearing in Tracy on MARCH 18

STOP THE BOMBPLEX

Please circulate widely. Please come. It's crucially important.

An important invitation for you:

A TRACY ORGANIZING / MOBILIZING / PLANNING MEETING TO STOP THE "BOMBPLEX," NUCLEAR WEAPONS AND WAR

We've found the Weapons of Mass Destruction! Five years ago, the U.S. attacked Iraq based on flimsy allegations of non-existent WMDs. Now, the Department of Energy (DOE) National Nuclear Security Administration has released new plans to modernize and "revitalize" the U.S. nuclear weapons research and production complex at 8 locations across the country, including at the Livermore Lab's Site 300 in Tracy. The DOE calls the plan, "Complex Transformation."

We call it "Bombplex." Tri-Valley CAREs and allied organizations are calling on all anti-nuclear, anti-war, environmental, and peace and justice activists to turn the "Bombplex" public hearings into a national public referendum on the future of nuclear weapons.

Here is where you come in. We are holding a special organizing / mobilizing / planning meeting in Tracy and calling on key activists and organizations to participate. Our goal is to take action together to MOBILIZE a large and powerful turnout at upcoming public hearings in Tracy (March 18 - see below for hearing time and location) and Livermore (March 19 - the 5th anniversary of the Iraq war).

Planning Meeting in Tracy:
Thursday, March 6th, 7 PM to 8:30 PM, Tracy Community Center, 300 East 10th
Street, Tracy. To RSVP or obtain details, call Marylia at (925) 443-7148 or email marylia@earthlink.net.

Note: Also at the Tracy Community Center on March 6, beginning at 6 PM, there will be a Dept. of Energy (DOE) workshop on the Superfund cleanup of toxic contaminants at the Building 850 "Firing Table" at Site 300. This Firing Table is one of four highly polluted locations where open-air bomb blasts have been (and still are) detonated at Site 300. The DOE workshop will feature posters about the cleanup (not speakers), so you can pop in and see the displays before the "Bombplex" organizing meeting at 7 PM. (And, if you think that pollution from bomb tests is relevant to why we must stop the "Bombplex," you are correct.)

Planning Meeting in Livermore, too:
Thursday, February 21, 5:30 PM to 7:30 PM, at Tri-Valley CAREs, 2582 Old
First Street, Livermore, CA. To RSVP or obtain details, call Marylia at (925) 443-7148.

Elements for each organizing meeting will include:
* What is Bombplex? A primer on nuclear weapons programs embedded in this plan, followed by a discussion on what YOU want to emphasize at the Tracy hearing.
* How do we stop it? Ideas to make the hearings successful, powerful and effective.
* Who can we mobilize? A structured outreach brainstorm to accomplish our goals.
* What's next? A broader discussion on nuclear disarmament action beyond the hearings.

"Bombplex" Action Alert for Newsletters, etc.

Public Hearings on the Future of the U.S. Nuclear Weapons Complex!

The Dept. of Energy (DOE) National Nuclear Security Administration has released its draft plan to revitalize the nuclear weapons complex at 8 locations across the country, including Livermore Lab. The DOE calls the plan "Complex Transformation" (formerly known as "Complex 2030"). We call it "Bombplex."

The draft plan is in the form of a Programmatic Environmental Impact Statement (PEIS). The most important thing to know is that the plan is fundamentally about the future of the U.S. nuclear weapons research and production complex. Do you want to see a revitalized weapons complex with added capabilities to research, develop, test and produce new and militarily modified nuclear bombs? Or, do you want to see the U.S. fully comply with its legal obligations under the nuclear Non-Proliferation Treaty?

Don't be silent at this critical juncture. Your voice is needed now. Make the hearings a public referendum on nuclear weapons. At the hearings, you can speak on the changes you want to see at Livermore Lab, or on U.S. nuclear weapons policy writ large. You can speak out to stop polluting nuclear weapons activities at the Livermore Lab main site and its Site 300 in Tracy. You can tell the government to stop new nuclear weapons, like the Reliable Replacement Warhead, which the DOE is still pushing for with $40 million in its latest budget request. You can call on the government to end ALL bomb testing at Site 300. Tell DOE not to detonate depleted uranium, high explosives and other toxic and radioactive materials on open-air Firing Tables that are already polluted from past use. Tell DOE that plans to conduct even bigger bomb blasts under a "for hire" program for the Department of Homeland Security is unacceptable. You may also wish to point to the U.S. hypocrisy in planning to produce new weapons of nuclear mass destruction on the 5th anniversary of the U.S. invasion of Iraq.

Come and speak your truth to power. Choose the peace issues that are most meaningful to you. There will also be a 90-day period for written public comments. Public hearings are:

Tuesday March 18, 2008 -- Tracy, California
Holiday Inn Express, 3751 N. Tracy Blvd. One session only: 6 p.m.-10 p.m.

Wednesday March 19, 2008 - Livermore, California
Robert Livermore Community Center, 4444 East Ave. 2 sessions: 11 a.m.-3p.m. and 6 p.m. -10 p.m.

Comments may be submitted by mail to:
Mr. Theodore Wyka, Complex Transformation SPEIS Document Manager, Office of
Transformation, NA-10.1, U.S. Department of Energy/NNSA, 1000 Independence
Avenue, SW. Washington, D.C. 20585
Or by fax: (703) 931-9222 (request confirmation of receipt)
Or by e-mail: ComplexTransformation@nnsa.doe.gov (request confirmation of receipt)

More info at -- www.trivalleycares.org o www.wslfweb.org o www.peaceactionwest.org

Marylia Kelley,
Executive Director

Tri-Valley CAREs
2582 Old First Street
Livermore, CA 94551

Ph: (925) 443-7148
Fx: (925) 443-0177
Web: www.trivalleycares.org
Email: marylia@trivalleycares.org or marylia@earthlink.net

A lesson certain to be unlearned in California: When finance, insurance, real estate, large landowners and politicians create a housing bubble like the one we have been through, the only form of economic growth permitted to survive is construction. Thefore, when the bubble bursts, so may the economy itself. The Invisible Middle Finger of the Market has flipped off California.

3-1-08
San Diego Union-Tribune
Carlsbad for-profit You Walk Away assists those facing foreclosure...Emmet Pierce
http://www.signonsandiego.com/uniontrib/20080301/news_1b1mortgage.html
You Walk Away LLC has found a way to profit from the ongoing mortgage crisis, but co-founder Jon Maddux says the Carlsbad-based company also is providing a valuable service to borrowers who took out risky adjustable-rate loans during the fevered housing boom.
Launched in January, the business helps distressed homeowners navigate their way through the foreclosure process for a fee of $995. Although it has served about 200 clients so far, Maddux says the potential market is largely untapped. An estimated 1.8 million adjustable subprime loans are scheduled to reset to sharply higher interest rates nationwide over the next two years...“The contract goes both ways,” Maddux said. “The mortgage has a clause that says if they don't pay, the bank gets the house back. When they made the loan, it was risky. It allows for Plan B if (borrowers) can't afford the home anymore or they have to make a decision whether to put food on the table or make the mortgage payment. . . . We try to help protect the homeowner.”
Economist Edward Leamer, director of the UCLA Anderson Forecast, said the creation of a company that helps borrowers go into foreclosure reflects “a collective erosion in borrowers' commitment to service their loans"...“People are walking away just because it was a bad investment.”
Martin McGuinn, a San Diego attorney who represents lenders and loan servicers in foreclosures, called the trend disturbing. “From a lender's standpoint, the worst thing in the world that could happen is for people to simply walk away from their property,” McGuinn said.
January foreclosures in San Diego County totaled 1,305, up 32 percent from December and up nearly 257 percent from January 2007. Notices of default, the first step in reclaiming mortgaged properties, totaled 3,109, up 21 percent from December and up 145 percent from a year earlier...Gabe del Rio, president of the Housing Opportunities Collaborative, a nonprofit consortium of homeownership and housing counseling agencies, said distressed borrowers have other alternatives besides harming their credit through foreclosure.
Information on foreclosures is available at no cost online or from the nonprofit groups he works with, he said. “A foreclosure is the worst outcome that could happen,” del Rio said. “There are other steps you can take.”
As loan defaults have surged, lenders have become more willing to negotiate, he said. In some cases, they will take back homes and forgive the remaining debt to avoid the expense of the foreclosure process. “You are basically settling with the lender,” del Rio said. “You are saying, 'I will give you back the collateral if you release me with from my debt.' You are not just skipping out.”
Another option is a short sale, in which a lender agrees to allow the borrower to sell the home for less money than the amount that is due on the loan... “All the critics out there, what do they recommend?” Maddux asked. “If they can't sell and they can't refinance and a loan modification puts them in a similar situation, what is their option?”
You Walk Away offers reliable foreclosure information, he added. If borrowers “did it themselves, they could save some money, but there are too many mistakes that could cost you well over $1,000.” The company operates in California and six other states where Maddux and co-founder Chad Ruyle have agreements with attorneys who address local foreclosure laws...

Los Angeles Times
California job growth slows to a crawl
The state added just under 15,000 positions in 2007 and January saw another shrink in employers' payrolls. Training programs and other initiatives will be pursued, officials say...Lisa Girion and Ken Bensinger
http://www.latimes.com/business/la-fi-jobs1mar01,1,2772012.story?ctrack=2&cset=true
Here's more evidence that California is losing its struggle against recession: The state shed 20,300 jobs in January, more than the other 49 states combined for the month, a government report showed Friday.
That comes on top of more bad news. California's job engine sputtered nearly to a halt last year, adding just under 15,000 positions, or 0.1%, to the state's payrolls, according to the Employment Development Department's revised annual figures, also released Friday.The state's job losses in the first month of the year swept across several sectors, with construction, information and financial services among the hardest hit...In all, 15.2 million people were employed in California in January. The state's unemployment rate held at 5.9%, unchanged from December's revised rate and up from 5% in January 2007.
The figures show California's hard-hit home-construction sector was a drag not only on the state economy but also figured prominently in the U.S., posting its first job losses in more than four years in January.The U.S. economy as a whole dropped a net 17,000 jobs during the month -- fewer than California alone, meaning that California's losses were offset by gains elsewhere. The nation's unemployment rate edged lower to 4.9% in January from December's 5%.Economists said the latest figures showed that the state economy was sluggish at best and might be headed toward recession...

Press-Enterprise
Inland construction jobs in freefall, state employment records show...JOSH BROWN...2-2908
http://www.pe.com/localnews/rivcounty/stories/PE_News_Local_D_jobs01.39ad942.htm
The crippled housing market sent the Inland region last year into the biggest jobs freefall on record, state figures released Friday show. Riverside and San Bernardino counties lost 7,300 jobs in the past year, the vast majority of losses in home construction-related fields.
The new state figures represent a dramatic revision to the state's estimates in December that showed the Inland region had gained 32,400 jobs during the previous 12 months. Regional economists long had expected a downward revision to the numbers after reports were heard of the construction industry hemorrhaging jobs...