CSBJ Daily

When Gov. Bill Ritter announced a likely freeze on hiring new state employees and ordered a halt to new construction last week, Colorado’s institutions of higher learning were suddenly put on high alert.

The move was precipitated by the state legislature’s Joint Budget Committee, which warned the governor’s office that the state could be facing a $100 million shortfall.

Two proposed education-related cuts included $30 million allocated to expand full-day kindergarten and another $50 million for capital construction projects in the state.

The University of Colorado Colorado Springs – like the school’s Boulder and Denver campuses – has at least one capital project underway that could be affected. The new science and engineering building was one of three construction projects in the CU system likely to be affected by a freeze.

Brian Burnett, UCCS chief operating officer, said the campus’ $56 million science and engineering building is already more than half way complete, and Chancellor Pamela Shockley-Zalabak has requested an exemption from the budget freeze.

“Here’s the issue – they’re talking about stopping work on capital projects that haven’t been started” Burnett said. “In our case, the state only contributed $20 million toward the project while the University funded $36 million.”

In the spirit of keeping good people on the job, the El Paso County Naturalist Docent organization raised $85,000, which it has donated to pay the salaries of full-time parks staff through the end of the year.

The volunteer group presented a check to the El Paso County Commissioners, citing a desire to keep the positions intact as the county deals with budget shortfalls. It also sponsored an art sale on Sept. 27 at the Fountain Creek Nature center to help keep both the Bear Creek and Fountain Creek nature centers open in light of likely budget reductions.

Since 1992, Colorado wineries have grown 1,085 percent.

No, that’s not a typo.

During 2008 alone, the state’s wine industry increased production by 11.44 percent and surpassed 1.84 percent market share by volume.

The 110,000 cases of wine reported to the Department of Revenue, from 72 wineries, during the 2008 fiscal year were not necessarily produced during the fiscal year.

Growth during the 2007 fiscal year was 9 percent.

Colorado boasts the nation’s highest vineyard at 6,417 feet above sea level in Paonia, where vintners grow Riesling, Gewurztraminer and Pinot Noir. And Viognier and Syrah thrive on the hot valley floor along the Colorado River near Palisade, as do Merlots, Cabernet Francs and Sauvignons.

The Colorado Wine Industry Development Board said the state’s wineries are in five wine regions, two of which are federally designated as American Viticultural Areas – the Grand Valley, between Palisade and Grand Junction, and the West Elks, between Paonia and Hotchkiss.

Wall Street’s worst fears came to pass today, when the government’s financial bailout plan failed in Congress and stocks plunged precipitously – hurtling the Dow Jones industrials down nearly 780 points in their largest one-day point drop ever.

Credit markets, whose turmoil helped feed the stock market’s angst, froze up further amid the growing belief that the country is headed into a spreading credit and economic crisis.

The blue chip index passed by far its previous record for a one-day drop, 684.81, set in the first trading day after the Sept. 11, 2001, terror attacks.

Locally, the financial meltdown caused Colorado Springs Utilities to cancel today’s proposed sale of $60 million in refunding bonds.

One of the issue’s proposed underwriters, Wachovia, was acquired by Citigroup this morning.

Utilities spokesman Dave Grossman said that the offering had been postponed indefinitely.

The $700 billion bailout plan’s failure means no one knows how the financial sector hobbled by hundreds of billions of dollars in bad mortgage bets will recover. While Wall Street didn’t believe that the plan was a panacea, understanding that it would take months for its effects to be felt, most investors and analysts believed it was a start toward setting the economy right after a credit crisis that began more than a year ago and that has spread overseas.

The plan’s defeat came amid more reminders of how troubled the nation’s financial system is – before trading began came word that Wachovia Corp., one of the biggest banks to struggle due to rising mortgage losses, was being rescued in a buyout by Citigroup Inc.

According to preliminary calculations, the Dow fell 777.68, or 6.98 percent, to 10,365.45. The decline also surpasses the 721.56-point intraday decline record also set during the first trading day after the terror attacks. Still, in percentage terms, the decline remained well below the more than 20 percent drops seen on Black Monday of October 1987 and the Depression.

Broader stock indicators also tumbled. The Standard & Poor’s 500 index declined 106.85, or 8.81 percent, to 1,106.42.

The technology-heavy Nasdaq composite index fell 199.61, or 9.14 percent, to 1,983.73.

Oil prices also plunged more than $10 a barrel as a U.S. financial bailout plan failed to win legislative approval, raising the specter of a prolonged economic downturn that could drastically erode global energy demand.

Light, sweet crude for November delivery sank $10.52, or 10.1 percent, to settle at $96.36 on the New York Mercantile Exchange, after earlier dropping as low as $95.04. It was crude’s lowest trading level since prices edged back below $100 earlier this month; crude previously hadn’t traded that low since February.

Colorado House members voted 4-3 against the bail out plan.

It was supported by Democrats Diana Degette and Ed Perlmutter, as well as Republican Tom Tancredo. Democrats Mark Udall and John Salazar joined Republicans Marilyn Musgrave and Doug Lamborn in opposition.

Lamborn said he supports legislation crafted by the Republican Study Committee that would allow Congress to help “Wall Street ’workout’ this crisis in a way that does not force the taxpayers to ’bailout’ Wall Street.”

Highlights of H.R. 7223 include:

* Use privately-funded mortgage insurance to stabilize the market and eliminate taxes on profits earned by U.S. firms overseas, so they will not have incentives to move job overseas

* Schedule Fannie Mae and Freddie Mac for privatization

* Suspend mark-to-market regulatory rules until the SEC can issue new guidelines that will allow firms to mark assets to their true economic value

* Allow banks to treat losses on GSE stock as ordinary losses, not capital losses

* Crack down on fraud

The Federal Reserve Bank announced this morning that it would take “further coordinated actions” to expand U.S. dollar liquidity worldwide.

The actions include increasing currency swaps with foreign central banks from $330 billion to $450 billion and expanding the Fed’s emergency loan program by $150 billion.

The action was taken in concert with other central banks, including the European Central Bank, the Bank of England, and the Bank of Japan.

A Federal Reserve Bank statement said the moves are intended to maintain a stable flow of credit to the economy during this period of significant strain in global markets.

The Fed’s expansion of liquidity, the biggest since credit markets seized up last year, comes as Congress prepares to vote on a $700 billion bailout for the financial industry.

The crisis is reverberating through the global economy, causing stocks to plunge and forcing European governments to rescue four banks during the past two days.

The expanded El Paso County parking garage at the northwest corner of Costilla and Tejon streets will open Oct. 1

The building now has 781 parking spaces. The $6.2 million project, which added three levels to the building, started during May.

The garage is open to the public as well as county employees.

Hours are 5 a.m. to 8 p.m. Monday through Friday. Monthly parking passes can be purchased for $40. The daily parking rate is $5, and the hourly rate is 75 cents.

To purchase a pass, call 520-7741.

The Associated Press

NEW YORK – In the latest byproduct of the widening global financial crisis, Citigroup Inc. will acquire the banking operations of Wachovia Corp. in a deal facilitated by the Federal Deposit Insurance Corp.

Citigroup will absorb up to $42 billion of losses from Wachovia’s $312 billion loan portfolio, with the FDIC covering any remaining losses, the government agency said Monday.

Citigroup also will issue $12 billion in preferred stock and warrants to the FDIC.

The deal greatly expands Citigroup’s retail outlets and secures its place among the U.S. banking industry’s Big Three, along with Bank of America Corp. and J.P. Morgan Chase & Co. But it comes at a cost – Citigroup said Monday it will seek to sell $10 billion in common stock and slashed its quarterly dividend in half to 16 cents to shore up its capital position.

The agreement comes after a fevered weekend courtship in which Citigroup and Wells Fargo & Co. both were reportedly studying the books of Wachovia, which suffers from mounting losses linked to its ill-timed 2006 acquisition of mortgage lender Golden West Financial Corp.

The Associated Press

NEW YORK – TiVo Inc. and Nero AG of Germany were set to announce Monday that they will be launching a package that turns a Windows computer into a TV recorder, just like a TiVo set-top box.

The kit will cost $199 when it goes on sale Oct. 15, and includes a remote and a TV tuner that plugs into the PC. The interface on the computer screen looks just like the one on a TV equipped with a TiVo box.

It’s not the first software that allows TV recording on the PC. That’s been possible for years on computers equipped with TV tuners, and some versions of Microsoft Corp.’s Windows Vista operating system include the necessary software. But it will be the first time that both the TiVo interface and functions have been replicated on a PC.

The Nero LiquidTV/TiVo PC will go on sale initially in the U.S., Mexico and Canada, but it could open up some markets where TiVo does not yet sell its set-top boxes.

The Associated Press

NEW YORK – As the debate over a $700 billion bank bailout rages on in Washington, one of the nation’s largest banks – Washington Mutual Inc. – has collapsed under the weight of its enormous bad bets on the mortgage market.

The Federal Deposit Insurance Corp. seized WaMu on Thursday, and then sold the thrift’s banking assets to JPMorgan Chase & Co. for $1.9 billion.

Seattle-based WaMu, which was founded in 1889, is the largest bank to fail by far in the country’s history. Its $307 billion in assets eclipse the $40 billion of Continental Illinois National Bank, which failed in 1984, and the $32 billion of IndyMac, which the government seized in July.

One positive is that the sale of WaMu’s assets to JPMorgan Chase prevents the thrift’s collapse from depleting the FDIC’s insurance fund. But that detail is likely to give only marginal solace to Americans facing tighter lending and watching their stock portfolios plunge in the wake of the nation’s most momentous financial crisis since the Great Depression.

Because of WaMu’s souring mortgages and other risky debt, JPMorgan plans to write down WaMu’s loan portfolio by about $31 billion – a figure that could change if the government goes through with its bailout plan and JPMorgan decides to take advantage of it.

“We’re in favor of what the government is doing, but we’re not relying on what the government is doing. We would’ve done it anyway,” JPMorgan’s Chief Executive Jamie Dimon said in a conference call Thursday night, referring to the acquisition. Dimon said he does not know if JPMorgan will take advantage of the bailout.

Goodwill Industries of Colorado Springs has appointed Shawn Raintree as its new president and CEO effective Jan. 2.

Raintree will replace Robert G. Baker who will retire in December after leading the organization for 17 years.

Raintree is the interim president and CEO of the Colorado Springs Fine Arts Center and previously worked as executive director at Kaiser Permanente’s local office.

Raintree has also served as a member and chairman of Goodwill’s board of directors.

He’s a graduate of the United States Air Force Academy and the University of Colorado at Denver.