Arizona Daily Sun from Flagstaff, Arizona • 7

Arizona Daily Sun www.alaitysun.fnm Friday, (VioLt 10, 200S A7 FROM THE FRONT PAGE DWINDLE from Page A1 To order this photo, go to http photos. a'dailysun com Rick WachaAnzona Daily Sun A BUNDLED UP ALAN 0RR, left, and his mother, Christine Orr, walk Waily the Lab on West Birch Avenue in the West Townsite neighborhood late Thursday afternoon. The chill in the air has changed some leaves to yellow as fall descends upon Flagstaff. FREEZE from Page A1 also an investor. Many economists say that actions taken so far do little to address what is at the heart of the spreading financial contagion: falling housing prices and rising foreclosures.

Former White House economist Glenn Hubbard proposes that the government refinance every U.S. mortgage held by Fannie Mae and Freddie Mac into 30-year loans fixed at 5.25 percent. He also suggests that putting in place a cleanup agency modeled on the Resolution Trust Corporation of the late 1980s and early 1990s could help. The RTC was set up to deal with the savings and loan crisis. The government actually took over more than a thousand failed and all their assets.

It wound up owning foreclosed homes and other property, eventually reselling them. i. It took six years to clean up that mess. The total cost to taxpayers: about $125 billion. Economist Rob Shapiro, of NDN, a think tank formerly known as the New Democratic Network, said that so far the Fed is putting as many fingers as it can in the dike without stemming the flood.

He said the government should consider direct government loans to homeowners facing foreclosure. There are a range of proposals out there. The focus of the administration and Congress on Wall Street to the exclusion of homeowners is very economically and politically myopic, said Shapiro, a former economic adviser to President Clinton. Republican presidential candidate John McCain has proposed a $300 billion program for the government to help financially troubled hpmeowners stay in their homes by taking over their mortgages and renegotiating the terms a step authorized by the $700 billion package signed last Friday by President Bush. 1 While that would be expensive, McCain said, until we stabilize home values in America, we are never going to start turning around and creating jobs and fixing our economy.

Critic of the McCain plan complained that many of the mortgages involved have been repackaged into com-1 plex investments that are now nearly impossible to value and that the government would be hard-pressed to unravel and buy frhem individually. THERES MORE TO THE STORY Visit www.azdailysun.com to read the full AP version of this story. MELTDOWN from Page A1 5,000 U.S.-based representing almost all stocks traded in America. It was the second straight day that Wall Street was rocked by a final-hour sell-off, but this one was particularly shocking. Most of the day was relatively calm, and the trading floor was quieter than usual because of the Jewish holiday of Yom Kippur.

Wall Street awoke to news the federal government was brandishing a new weapon against the financial crisis considering seeking an equity stake in banks in order to stabilize them. EQUITY STAKE INEFFECTUAL But that step appeared Jo be as ineffectual as the others Washington has rolled out in recent weeks, including a $700 billion bailout of the financial industry, a coordinated interest rate cut by central banks around the world and direct lending by the Federal Reserve to private companies to provide them with shortterm cash. Acquiring a stake in the banks would be yet another startling intervention by the government in the free market, but economists said President George W. Bush was left with little choice because of the credit markets, where tight lending has choked off the everyday cash that is the lifeblood of the economy. In normal times, this would be out of the question, but in the present dire situation, I think the government should be employing all the powers that it can, said Sung Won Sohn, an economics professor at California State University, Channel Islands.

After the closing bell, shellshocked traders and bankers gathered at Bobby Vans Steakhouse and downed beers and drinks to chase the ghastly numbers. One Wall Streeter joked things had gotten so bad that he should apply for a job as a waiter. It was an ugly day, theres no ways to put it," said another customer, Alan Valdes, director of floor operations for Hallard, Lyons. Guys were frustrated, just fed up. Were in an area no one has been in since 1930.

Wall Street has been teetering on the brink of panic for a month now, vulnerable to any bad news. Thursdays sell-off was triggered when a major credit rating agency put General Motors Corp. and its fi- nance affiliate under review to determine whether it should be downgraded. Stock in GM, one of the 30 components of the Dow Jones industrials, lost 31 percent of its value and closed at $4.76 its lowest in more than half a century, since the Korean War began. DOW IN FREE FALL For the Dow, it has been nothing short of a free fall: The average is down 2,338 points, or 21 percent, in the last four weeks, since the Lehman Brothers bankruptcy escalated a long-running credit crunch into a full-fledged crisis.

The point decline Thursday was the third-worst in Dow history. The worst, 778 points, came less than two weeks ago. Of the last 19 trading days, there have been 11 triple-digit losses including the unprecedented six straight. The six gains have all been triple-digits, and only one of them was enough to make up the losses of the day before. The Dow now stands only about 1,300 points above its lowest close of the bear market that followed 911.

In a market as volatile as this, that gap can be closed in a couple of trading days, or less. In fact, triple-digit declines can happen almost in an instant. On Thursday, the Dow was above 9,200 after 1:30 p.m. and still above 9,000 after 3 p.m. The pressure to sell was so intense that the Dow kept dropping precipitously for 10 minutes after the 4 p.m.

closing bell as the days losses were tabulated. In percentage terms, the drop in the Dow exceeded the day the markets reopened after the Sept. 11, 2001, terrorist attacks. It was not close to the 22.6-percent decline on Black Monday in 1987, the last stock market crash. Still, it is becoming increasingly clear that Washington has ever fewer places to reach in its toolbox to stop, or perhaps even slow, the crisis.

Among the options still left are buying up foreclosed properties and making direct loans to homeowners, both of them hard for free-market supporters to swallow. A THERE'S MORE TO THE STORY Visit www.azdailysun.com to read the full AP version of this story. north. Depending on the track of the low, that really good moisture could track east, down over the White Mountains and down into the New Mexico areas. FROZEN VEGETABLES Clemmons said the dip in temperatures is not that extreme, but gardeners should take a warning, especially going into Sunday.

The temperatures are cold enough that weve seen a lot of local vegetable crops get frozen," he said. If you havent been affected yet, the low around 20 Sunday will put you into that. As of Thursday evening, the NWS Web site issued a wind advisory. Winds Friday evening have the potential to become stronger, with sustained winds of 20 to 40 mph and gusts from 50 to 65 mph into Saturday. Winds this strong can make driving difficult.

Latest updates are available at www.weather.gov. Betsey Bruner can be reached at 556-2255 or by e-mail at bbmneiazdailysun.com. and generally involve partly taking over private companies, an idea thats anathema to economic conservatives and others in America. Even as policymakers counsel patience in waiting for the medicine already prescribed to fully kick in, they are searching hard for other approaches. So long as financial conditions warrant, we will continue to look for ways to reduce funding pressures in key markets, says Federal Reserve Chairman Ben Bernanke.

The' Feds primary tools are lowering interest rates and flooding the system with money. Its already done plenty of both. It could further lower interest rates and probably will if the downturn continues. But after this weeks half-percent-age-point cut, coordinated with other nations central banks, there isnt a whole lot lower for the U.S. to go.

Since September 2007, the Federal Reserve has pushed its benchmark short-term rate down to 1.5 percent from 5.25 percent. The Fed presided over by Alan Greenspan kept interest rates at 1 percent for a full year earlier in the decade and many economists suggest that was one of the root causes of the' housing bubble, making it too easy for people to take out loans they couldnt afford. And besides, in Japan holding rates near zero for years did little to help a deeply troubled economy. The Fed could inject more money. But it has already flooded the financial system with hundreds of billions of dollars.

And bold action by the central bank can have unintended consequences, signaling to investors that things may be worse than they thought, contributing to the downward spiral in markets. Apart from the Fed, Congress last week enacted a bailout package backed by up to $700 billion in taxpayer money, on top of a $300 billion housing package passed in the summer. Treasury Secretary Henry Paulson says it will be weeks before the government actually starts using the bailout money to buy up soured mortgage-based securities. The Treasury is now considering using some of the money to take part ownership in certain U.S. banks.

But that could put the government in the uncomfortable position of regulating banks in which it is this point that they are not ready to issue a wind warning. Given what were starting to see, were trying to highlight that as part of this significant event, he said. Winds could be pretty bad, especially Saturday morning. Id put the garbage cans on the east side of the house, just to shelter them, otherwise you might find them at the neighbors house." High winds may reach up into the Four Corners region, from the Mogollon Rim and to the northeast. Highs on Saturday may hit 48 degrees in Flagstaff and up into the 60s at lower elevations, such as Sedona, Cottonwood and St.

Johns. Depending on how this storm tracks, precipitation may or may not reach the Flagstaff area. 1 would say this is still an unfolding weather event for us here, Clemmons said. As it gets ingested into the westerly, moisture is going to be transported WATER from Page A1 meters, cold air will get around the water pipes. One very important caution: Homeowners should not attempt to unthaw frozen pipes themselves by using blow torches or other methods.

Its really dangerous to try to unthaw the piping yourself, said Mortensen, who is a third- generation Arizona plumber. The water will boil and turn to steam, with no place to escape, and cause an explosion. Plumbers have special equipment to unthaw the pipes. For more information, visit www.mortensencustomplumbing. com.

Betsey Bruner, Sun reporter closed, otherwise they may let in blasts of cold air, which will collect under the house where there are water pipes. 4.) Make sure water heating systems are inspected and in good working order. Cold bursts of air may blow down vent pipes for water heaters and turn heaters off. If a water heater goes out, the pipes around the system will most likely freeze. 5.) Make sure water meters outside are properly covered.

If tops have not been put back on STANCE from Page A1 ENERGY from Page A1 oil. Money to come from auctioning pollution permits under a program to address climate change. Mandatory reductions of carbon dioxide and other greenhouse gases by 80 percent from 1990 levels by 2050, using a market-based, cap-and-trade system that would increase energy costs. Increase federal fuel economy requirements from 35- mpg to 40 mpg. Now would consider limited expansion of offshore oil and gas drilling.

Opposes drilling in Arctic National Wildlife Refuge. Proposes windfall-profits tax on largest oil companies to pay for energy rebate of up to $1,000. Expand federal requirements for ethanol from 36 gallons to 60 million gallons a year with increase coming from non-corn sources, and require utilities to produce 25 percent of power from renewable energy such as wind, solar and biomass by 2025. $7,000 tax credit for the purchase of advance-technology vehicles; put 1 million plug-in hybrid cars on road by gas costs $4 a gallon than when it costs $2. But widespread use of some alternative energy sources still is years away, and many Americans say they need energy relief now.

A look at what some are doing to combat rising energy costs and protect the planet: DANA BOLYARD, 36, Murphy, N.C. Bolyard knows she cant change the countrys policies on offshore drilling or spur on the development of alternative fuels. But at her home in rural North Carolina, Bolyard does what she can. Glass, cardboard and plastics are sorted into recycling bins; clothes dry on a line, not in the dryer; and produce is either grown in her organic garden or bought locally. It takes a commitment, but its not any harder, Bolyard said.

It doesnt take any more of your time. Bolyard wasnt always an environmentalist; her world view changed after having two daughters. Tve got to leave the planet in good hands for my children, she said. We have to be good stewards of the earth. A former prosecutor who now runs a small business that makes soap and other natural products, Bolyard said energy and the environment are her top issues in the presidential election.

She plans to vote for Obama. I feel like hes thought about it, Bolyard said. Hes not just giving it lip service. LISA ROSSLAND, 49, Republic, Mich. Its a 45-mile commute from Rosslands home in the Upper Peninsula of Michigan to the Wal-Mart where she works in the cosmetics department.

When gas prices started to rise last year, Rossland started carpooling to work with her husband, Andy Rossland, who works at a nearby prison. Gas continues to hover near $4 a gallon in the Upper Peninsula. At that price, Rossland said even carpooling can ohly help so much. Lately, shes started driving slower never faster than 60 miles an hour in hopes of stretching a tank of gas even farther. This winter, shell heat her home wifh a wood-pellet stove to save on energy costs.

We have maybe $250 to make it through two weeks," and we still have to buy the gas, she said. Financially, its tight. Rossland, a registered Democrat, is undecided in the presidential race. For the first time in her life, Rossland said, she may go to the polls and not know who shell pull the lever for. I just hope that someone that does take over can bring us back at least to where we were a few years ago, she said.

I know there will be rough times. But I think these are rough times. economy ranked significantly higher. Up until the past year, the issue of' energy and energy prices wasnt very high on the radar of the American consumer, said David Conover, counsel to the private National Commission on Energy Policy, a bipartisan group of leading energy experts. But today, if you talk to a member of Congress, when they go back home and they have town hall meetings, everyone is talking about gas prices.

Presidential candidates John McCain and Barack Obama, in have responded with plenty of proposals to ease the high costs of energy, promote energy independence and protect the environment. If you look at the platforms of the candidates, youll see very few differences, Conover said. The differences that exist are important, but youll see very few differences on some of the fundamental While high energy costs have certainly hurt consumers, Conover said the price increases also provide an opportunity for the proliferation of cleaner technologies, like wind and solar, which become more attractive options when with climate change. Favors increased offshore drilling and increased production as primary means to break dependence on foreign oil; opposes drilling in Alaskas Arctic National Wildlife Refuge. Mandatory reductions of carbon dioxide and other greenhouse gases by 66 percent from 1990 levels by 2050, using a market-based cap-and-trade system that would increase energy costs.

Supports $2 billion program to develop carbon capture and other clean coal research and development. $5,000 tax credit for the purchase of zero carbon emission cars; $300 million prize for improved batteries for hybrid vehicles. Democrat Barack Obama: Ten-year, $150 billion fund for biofuels, wind, solar, plug-iri hybrids, clean-coal technology and other climate-friendly measures as prime means to break dependence on foreign But if 1 the city chose to create a new channel it would be limited by its franchise agreement with NPG Cable to adding just a 25-cent charge to the monthly bills of cable subscribers. That would raise roughly $42,000 a year for the channel. Swanson said the community wants a variety of sources to get local news and sports, and local law enforcement needs to have various outlets to reach the community about important breaking news like wildfires.

After the meeting, Swanson con- ceded that during his two years on the city council, KNAZ rarely covered the council meetings or broke into local programming to issue breaking news to the community. Burke is expected to report the results of those meetings to the council in a few months. 1 lic and USA Today. Closing the station was a decision that we did not come to lightly, he said. Xhe station was for sale for three years without a serious buyer.

Misner also pointed out that the station was never able to convince satellite television carriers, Dish Network and DirecTV, to, carry Channel 2 to the region. He said satellite TV subscriptions, are popular in northern Arizona and that only a portion of the community truly had access to his station. Misner told the council the station is still for sale and that Channel 12 has established a Northern Arizona bureau after Channel 2 closed its doors. But most of those news reports produced by the new bureau are posted online, noted Presler. NAU APPROACHED Misner also noted he has had discus controlled public education and government (PEG) channel with the local cable provider, NPG Cable.

The city already had two public access channels several years ago but turned control over to NAU. Benefits of such a channel would allow for local coverage to be easily produced and uploaded to the channel by community members. GOOD NEWS ONLY Flag News, an independent news operation in Flagstaff that posts online and on NAUs public access channel, might be one of the groups to benefit from the establishment of a public access channeL 1 Tyrus Coursey, who established Flag News two years ago, said he prefers to cover the good news in northern Arizona. Our idea of news isnt shared with what the Arizona Daily Sun and Channel 2 think is news, he said. sions about the station with NAUs School of Communication.

The dean of the school, Michael Stevenson, downplayed the talks between the school and KNAZ, saying the school is primarily interested in partnering with news agencies that will provide professional experiences for communication students. Recently, the school expanded its student-produced newscast, NAZ Today, to a four days-a-week format broadcasting at 6 p.m. and 10 p.m. NAU students primarily write, produce and present campus and local news as well as sports and weather. KNAZ alums Jan Petrie and Lee Born have been contributing to the show since late September.

Presler said she was impressed to see the college step up and try to fill the void left by KNAZ. Several other community members suggested the city mirror other larger communities and establish a new, city- TV from Page A1 city should, at the very least, get interested parties together to discuss possible scenarios. -Im not sure it is our job to be a TV station, but we might be able to be a catalyst to get it started, said Vice Mayor A1 White. STATION NEVER PROFITABLE Among those Who waited more than 90 minutes to address the council on the issue was John Misner, the president and general manager of both Channel 2 and its sister station, Channel 12 in Phoenix. He cautioned the city that the local station was never profitable during the decade it was owned by the media giant, Gannett.

In addition to Channel 12, Gannett owns the Arizona Repub J. Ferguson can be reached at 556-2253 or jfergusonazdailysun.com. I.