TODAY

– November 25, 2014

Jerry Brown will face Neel Kashkari for governor

(AP) — Gov. Jerry Brown easily advanced to the November general election to seek an unprecedented fourth term as governor, where he will face moderate first-time candidate Neel Kashkari, a former U.S. Treasury official who pulled ahead in a fight for the future of the GOP in California.

The GOP race between Kashkari and his Republican rival, conservative Assemblyman Tim Donnelly, became a proxy fight for the direction of the struggling party in California, which overwhelmingly leans Democratic and where Brown enjoys high approval ratings.

Establishment GOP leaders rallied around Kashkari's candidacy, and the 40-year-old former Goldman Sachs banker poured $2 million of his own money into the race in the final weeks as polls showed him trailing Donnelly, a tea party favorite.

"Beginning tonight, Republicans must come together, support one another and focus our energy on changing Sacramento," Kashkari said in a statement early Wednesday after Donnelly called to concede the race. "My commitment is to rebuilding California's middle class and re-energizing the Republican Party."

Brown finished first based on early returns Tuesday night, and told reporters outside the historic governor's mansion in Sacramento, "I take nothing for granted" in November.

"At this point, 40 years from the time I won my first primary for governor of California, I'm ready to tackle problems, not on a partisan basis, but on the long-term basis of building California and making sure we're ready for the future," said Brown, who is 76.

Brown has pursued a pragmatic approach since returning to the governor's office in 2011 after serving from 1975-1983. He won praise for helping to close a multibillion-dollar state budget deficit and persuading voters to approve temporary sales and income tax increases, allowing the Democratically controlled state Legislature to funnel more money to public schools.

Meanwhile, Donnelly and Kashkari offered competing visions for the struggling GOP. Donnelly is a social conservative who supports expanding gun rights, restricting immigration and worried some of the Republican establishment with his heated rhetoric; Kashkari, a son of Indian immigrants who is a social libertarian and fiscal conservative, has focused on rebuilding the middle-class.

The governor's race was the most high-profile on Tuesday's primary ballot. There were also opportunities for the GOP to make small gains in an overwhelmingly Democratic state.

The first statewide test for the prospects of a nonpartisan candidate yielded a typical primary outcome, though, with Republican Pete Peterson, an academic, and Sen. Alex Padilla, a Democrat, advancing in a crowded race for secretary of state, the office that oversees voting and campaign finance. Independent Dan Schnur, a University of Southern California lecturer, had hoped to make history.

Tuesday's primary also will set the stage for what is expected to be several fiercely contested congressional races in the fall.

Republicans are targeting four congressional Democrats this year: Reps. Ami Bera from the Sacramento area; Raul Ruiz from the Coachella Valley; Scott Peters from San Diego; and Julia Brownley of Ventura County. Democrats are focusing on ultimately winning the Inland Empire seat of retiring Republican Rep. Gary Miller and have targeted Republican Rep. David Valadao in the San Joaquin Valley.

In the heart of the Silicon Valley, seven-term Democratic Rep. Mike Honda faces a challenge from upstart Ro Khanna, a fellow Democrat who advanced Tuesday.

Honda and Republican Rep. Tom McClintock, who represents Sierra foothill communities in the northern and central parts of the state, could face strong challenges from within their own party in the general election.

Californians also approved two ballot measures: Proposition 41, which authorizes $600 million for affordable housing for veterans; and Proposition 42, which enshrines local government compliance with the state's open records and public meetings laws.

Voters in Del Norte and Tehama counties were showing only tepid support for joining four other counties pursuing a 51st state to be named Jefferson, while Lake County voters consider overturning county limitations on marijuana growing operations.

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Written on 11/25/2014, 1:34 pm by Business Journal staff
Distressed home sales in the San Joaquin Valley were on their way down in October, but remained almost double the statewide figures. According to the California Association of Realtors, distressed sales, which include short sales, sales of bank-owned properties and other foreclosure sales, stood at 15 percent of all home sales in Fresno County in October. That's the same as in September but down from 27 percent in October 2013.Distressed sales were down to 21 percent in Tulare County in the month compared to 26 percent in September and 32 percent a year ago.Madera County saw its distressed sales fall from 33 percent in September to 22 percent in the latest month, still up from 19 percent in October 2013.Distressed sales in Kings County fell to 19 percent compared to 21 percent the prior month and 32 percent a year ago.Statewide, distressed sales made up 8.9 percent of all homes sales in October, down from 9.1 percent in September and 14.5 percent a year ago.The share of real estate-owned sales, including bank-owned homes, went down to 3.9 percent compared to 4 percent in September and 4.7 percent in October 2013.Short sales remained flat at 4.6 percent in the month, down from  9.3 percent a year ago.
Equity sales, or non-distressed home sales, stood at 91.9 percent in October compared to 90.9 percent the prior month and 85.5 percent last year.Housing inventory remained lackluster throughout the state in October. The unsold inventory index for real estate-owned homes, or number of months to deplete the supply of homes at the current sales rate, went from 3.1 months in September to 3.2 months in September.The index for short sales fell from 6.2 months in September to 5.7 months in October, while the index for equity sales went from 4.1 months to 3.8 months.
Written on 11/25/2014, 1:11 pm by JONATHAN FAHEY, AP Energy Writer
(AP) — Does Saudi Arabia have it out for frackers in the U.S.? Or Iran? Or Russia? Will low oil prices make it easier to fight the Islamic State? Or harder? Trying to guess what OPEC members are thinking in the run-up to Thursday's meeting in Vienna is a high stakes parlor game for energy analysts, political scientists and armchair geo-politicians. This year the game is more complex than it has been in years. There is political upheaval across the Middle East, Iran is suffering under Western sanctions, and surprising growth in oil production outside of OPEC is sapping OPEC nations of badly-needed revenue. After four years of high and steady global oil prices, crude has fallen 32 percent in 5 months, reducing OPEC revenues by nearly $1 billion a day. Saudi Arabia is adding to the intrigue. OPEC's biggest and most important member has been uncharacteristically quiet in recent weeks about its intentions. In theory, OPEC can push prices back up by cutting the amount of oil it sells. In reality, OPEC member countries have different, often conflicting priorities and don't adhere to the cartel's official sales targets. Here are some theories experts are raising about what OPEC members want to happen, and why: — Saudi Arabia and other relatively well-off OPEC countries, such as the United Arab Emirates and Kuwait, want to let prices fall to slow or stop production growth in the U.S. and Canada, where drillers require higher prices to make money. That way, OPEC can increase its market share. — Saudi Arabia and its allies want to force prices lower to increase pressure on fellow OPEC member Iran during international negotiations over its nuclear program. Saudi Arabia does not want Iran to have a nuclear weapon. Iran's economy suffers if prices stay low, and its leaders could be more willing to limit nuclear development in exchange for a relaxation of sanctions. — Saudi Arabia wants to punish Russia for its support of Iran's nuclear program. Russia is not an OPEC member but is among the world's top three producers. It needs high oil prices to fund its government. — Venezuela, Iran and Iraq — countries in difficult financial shape — want OPEC to cut production quickly and sharply to force prices higher. They are unlikely, however, to offer to cut their own production. Saudi Arabia increased its production in recent years to help replace supplies lost out of Iran, Syria and elsewhere. Many OPEC members feel Saudi Arabia should therefore be the country to cut now. — Saudi Arabia fears that the battle to defeat the Islamic State group will at some point disrupt oil supplies or infrastructure in Syria and possibly Iraq. If oil prices are low when the disruption occurs, the global economy would be better able to absorb a price spike. — Saudi Arabia sees no need to tamper with what it says is the normal oil cycle. A period of high prices inspired drillers to develop new oil projects around the world. They were successful, so supplies rose and prices fell. Investment will now slow, supply will tail off, and prices will naturally rise again in the coming years.
Written on 11/25/2014, 1:09 pm by MARTIN CRUTSINGER, AP Economics Writer
(AP) — The U.S. economy grew even faster in the third quarter than initially thought, posting the strongest six months of growth in more than a decade and pulling further ahead of other big economies of the world. The gross domestic product, the country's total output of goods and services, expanded at a healthy 3.9 percent annual rate in the July-September period, the Commerce Department reported Tuesday. That's a notable jump from its first estimate of 3.5 percent. The revision was propelled higher by more robust consumer and business spending. Together with a 4.6 percent surge in the spring, the country has recorded its biggest back-to-back quarterly performance since 2003. "The question of whether the economy is accelerating or will accelerate is no longer a question; we can say somewhat definitively that the economy has already accelerated," said Dan Greenhaus, chief strategist at BTIG, in a research note. In contrast, other advanced economies are struggling. The eurozone economy barely grew in the third quarter, and inflation is a mere 0.4 percent, raising concerns of deflation. Japan unexpectedly found itself back in recession in the July-September period. And momentum in emerging economies like China and Brazil is also shaky. Tuesday's data further pushes the world's biggest economy "onto a different page than Europe and Japan," said Jennifer Lee, senior economist at BMO Capital Markets. Fueling third-quarter growth was consumer spending, which accounts for 70 percent of economic activity. That climbed at a 2.2 percent rate in the three-month period, an improvement from an initial estimate of 1.8 percent. Business investment in equipment shot up at a 10.7 percent rate, revised up from 7.2 percent. GDP has been on a roller coaster this year. It started with a steep slide in activity in the first three months of the year when the economy contracted at a 2.1 percent rate, largely due to a severe winter. Analysts believe momentum could decelerate to around 2.5 percent in the current quarter but then pick up again in 2015. They expect growth of around 3 percent, representing a sustained acceleration in activity six years after the Great Recession. Since the recession ended in June 2009, growth in the U.S. has averaged at subpar rates just above 2 percent. The lackluster recovery has been blamed on the financial crisis and the severity of the recession. Such downturns are usually harder to recover from because it requires repairs to the banking system to get credit flowing again. But economists believe 2015 will be the year when the recovery shifts into a higher gear, in part because they expect the government itself to help. Government spending grew at a 4.2 percent rate in the third quarter, the strongest performance since the spring of 2009. The gain was bolstered by a 16 percent surge in defense spending. The optimism is being fueled by modifications in government budget and tax policies. Across-the-board cuts in government spending and tax increases approved to control huge budget deficits had been holding back growth. By next year, economists believe a better budget picture will begin to pay off and fuel growth. Meanwhile, an improving job market is expected to provide households with more income, boosting consumer spending. The sharp drop in oil prices should also put more money in Americans' pocketbooks as they spend less at the pump. To be sure, weakness overseas and another possible recession in Europe may still hamstring U.S. growth. Those concerns rattled financial markets earlier this fall. But stocks have since rebounded to new highs amid signs that central banks in Europe, Japan and China will take action to bolster growth. The U.S. economy is also relatively insulated from overseas weakness since exports account for less than 14 percent of U.S. activity, one of the lowest such shares in the world. The Federal Reserve in October ended purchases of bonds aimed at pushing long-term interest rates down, though language used by the Fed shows that it does not expect to begin raising short-term interest rates for a "considerable time." Many economists believe the Fed's benchmark short-term rate, which has been at a record lows near zero for six years, won't start rising until the middle of next year.
Written on 11/25/2014, 1:06 pm by ANNE FLAHERTY, Associated Press
(AP) — Most people can recognize Microsoft founder Bill Gates and know that hashtags belong in tweets, but are confused about whether having a privacy policy means that a company actually keeps consumer information confidential, according to a new Pew Research study released Tuesday. The results underscore what many techies say is a growing problem for the U.S.: a generation reliant on the convenience that technology brings, but with little understanding of the risks of conducting nearly every transaction using zeroes and ones. Aaron Smith, senior researcher at Pew and author of the report, said he thought it would be interesting for policy makers and tech designers to find what knowledge gaps existed in modern life. "Just because people use these gadgets a lot doesn't necessarily mean they know everything about how they work and where they came from," he said. The 17-question quiz is available online at www.pewinternet.org/quiz/web-iq-quiz/ . Not surprisingly, people under 30 seemed to do better on some of the questions than older Internet users, such as knowing what a "Wiki" or "captcha" is. But young or old, only about 6 in 10 Internet users understood that "net neutrality" refers to the equal treatment of digital content by service providers. The Federal Communications Commission is considering whether it should regulate the broadband industry more aggressively to prevent providers from playing favorites among content sites like Google, YouTube, Amazon or Netflix. Another area where age didn't seem to matter was the false assumption that the existence of a privacy policy means that a company keeps the data it collects on consumers confidential. More than half — 52 percent — of Internet users thought that was the case, whereas privacy policies often explain that a company reserves the right to sell a person's information to advertisers or other third parties. Three-fourths of people surveyed thought the "Internet" was the same thing as the "World Wide Web." The Internet refers to the infrastructure that uses specific protocols to connect various networks; the web is one application that uses that architecture to share information using web pages. The online survey was conducted Sept. 12-18 among a sample of 1,066 adult Internet users 18 years of age or older. The survey was conducted by the GfK Group using KnowledgePanel. Sampling error was plus or minus 3.2 percentage points at the 95 percent level of confidence.
Written on 11/25/2014, 1:04 pm by 
DAVID PITT, Associated Press
(AP) — The egg is on a roll. It has never been more popular as a fast-food restaurant breakfast staple, and its appeal has broadened far beyond the day's first meal. High demand has kept egg prices at record levels, even as production soars. "A lot of it has to do with quick service restaurants offering breakfast now and many of them include egg whites and some whole eggs in their breakfasts," said Maro Ibarburu, associate scientist and business analyst at the Egg Industry Center at Iowa State University. The center researches egg production, processing and product development. McDonald's, long the fast-food breakfast leader, added the Egg White Delight to its menu last year as part of the trend toward high-protein, lower-cholesterol egg whites. Adopting similar strategies have been Dunkin' Donuts, with its egg-white flatbread sandwiches, and Jack in the Box, with its egg-white & turkey breakfast sandwich. Convenience store chain 7-Eleven also began offering a low-calorie egg-white breakfast sandwich in January. Eggs have gotten an additional boost from chefs increasingly using them in menu items not normally associated with eggs. The industry website restaurant.com predicted in January that 2014 would be the year of the egg when it surveyed menus across the U.S. and found egg-topped burgers and pizza. Chefs also worked them into salads and stir-fry dishes. "At the end of 2013 we started seeing it on the burger — the fried egg or the juicy egg over cheeseburgers," said Tania German, director of marketing for the website. "As this year went on we noticed it on pizza and more Mediterranean dishes." Cold weather drives more egg demand as more families choose a hot breakfast, said Rick Brown, senior vice president at Urner Barry, which provides analysis and information for the protein commodity markets. Egg purchases peak just before the holidays as baking and home cooking boost demand even further, Brown said. U.S. Department of Agriculture figures showed in a Nov. 17 report that use has grown to 261 eggs per capita, up 4 percent from 250 in 2011. The figure is expected to grow to nearly 266 eggs per capita next year. The demand spike comes as producers are beginning to prepare for the implementation of a new California law that requires chickens to have more space in which to move. Producers selling eggs in the shell to California must comply with the law which for many means reducing flocks so each chicken has more room. Increasing demand and potentially smaller flocks are helping drive record prices, Brown said. Egg prices have broken records each day for the past 10 days, Brown said. The Midwest price reached $2.18 a dozen on Monday, a new high. The USDA reported Friday that Iowa, the nation's leading egg supplier, produced a record 1.41 billion eggs in October, a 4 percent increase from a year ago. Iowa also had more laying hens on hand than ever before at 59.2 million, a 3 percent increase. Ohio was second in egg production with 731 million eggs in October. Iowa excels at egg production because corn and soybean meal, the primary ingredients in chicken feed, costs less in the state that also is the leading corn producer and the second leading soybean grower behind Illinois. Feed is 65 to 70 percent of the total cost of egg production, Ibarburu said. Exports also were increasing with shipments of eggs and egg products up 19.2 percent in September from the year before. Canada was the largest importer followed by Mexico.
Written on 11/25/2014, 12:15 pm by Hannah Esqueda
The Fresno Area Hispanic Foundation held a press conference today denouncing the delay in drought legislation until 2015.  The group was joined by representatives from the Downtown Business Hub, Fresno County Farm Bureau, California Farm Water Coalition, California Water Alliance and several concerned community members. "We're entering a very critical time for [Fresno County]," said Ryan Jacobsen, CEO of the Fresno County Farm Bureau. "If we don't get our act together and do something now we're going to be in the same situation as this year or a worse situation." Many of the speakers denounced Senator Dianne Feinstein (D-Calif.) for her recent decision to delay any drought legislation until next year. The legislation would have helped ease restrictions on movement of water in the Central Valley and relieve some of the strain Fresno County and its farming communities are facing.  That strain has become too much and Fresno County families cannot afford to wait any longer, local leaders said. Already, long lines have been seen at local food banks, farmland lies fallow and whole communities are having to rely on portable showers as their wells run dry.  "This choice of inaction is flying directly in the face of those individuals and organizations who are here today," said Aubrey Bettencourt, executive director of the California Water Alliance.  This year, farmers on both the east and west side received a 0 percent water allocation and little is expected to change in 2015, Jacobsen said. The three-year drought has already had a profound impact on the local economy and is expected to get worse as the area experiences an unprecedented fourth year of drought, said Javier Guzman, member of the Water for Land Committee. "The economic stability of our rural towns is being threatened," he said. "Children and families are being dislocated every day as people move in search of jobs." What legislators like Feinstein fail to realize, Guzman said, is that even if the area receives better rainfall this year, it will still not be enough to cure the effects of the drought.  "The drought has already lasted for three years, but we'll be feeling its effects for the next 10 to 15," he said. 
Written on 11/25/2014, 12:09 pm by Associated Press
(AP) — The U.S. Department of Education will be sending a team to work with the Los Angeles Unified School District on tech issues. Interim Superintendent Ramon Cortines spoke with Education Secretary Arne Duncan last week. According to a district spokeswoman, Duncan agreed to send a team to assess and advise on technology matters in December. LAUSD has been struggling with implementing new technology. Glitches with a new computerized scheduling system left some students unable to register for classes they needed to graduate. A $1 billion plan to give each student an iPad was also fraught with problems. The tech troubles were among the struggles leading former Superintendent John Deasy to resign as head of the nation's second largest school system in October.
Written on 11/25/2014, 10:42 am by 
SCOTT SMITH, Associated Press
(AP) — When it comes to controlling California's flashy Las Vegas-style casinos, the stakes are enormous for tribes who own the gambling operations that collectively generate billions of dollars a year to sustain Native Americans up and down the state. With this backdrop, several tribes in the past two years have fallen into nasty, sometimes violent, power struggles pitting factions and families against one another. The most recent case, involving the Picayune Rancheria of Chukchansi Indians near Yosemite National Park, climaxed in an armed raid on Oct. 9 by one faction that caused gamblers to flee, leaving their chips on the table. The National Indian Gaming Commission, which regulates Indian casinos, and a federal judge shut down the Chukchansi Gold Resort and Casino, citing safety concerns. Charges have been filed against 15 men — two tribal council members, the tribal police chief and a hired security team that included a former sheriff's deputy and onetime Marine, and a former Navy Seal. The casino remains closed — with estimated losses in the millions each week — because rivals have yet to diffuse what U.S. District Judge J. Lawrence O'Neill of Fresno called an "explosive keg" of emotions. "It's a classic struggle over money and tribal rights and control for what everybody recognizes is a very lucrative enterprise," said Denise Runge, a gambling industry researcher at Helena College University of Montana. Congress passed the Indian Gaming Regulation Act in 1988, setting the stage for sovereign Native American governments to open full-blown casinos. Indian casinos generated $28 billion last year from 449 casino operations in 28 states, according to the National Indian Gaming Commission. About 65 Indian casinos in California took in one-quarter of those earnings at nearly $7 billion. California outperformed the Las Vegas Strip, which drew $6.5 billion last year, says a University of Nevada, Las Vegas, Center for Gaming Research report. Experts say this influx of money, which provides, jobs, housing and benefits to many tribal members, has helped spark friction. "All of a sudden, you've got a government with a lot of responsibility and a lot of clout that didn't develop over decades like a lot of our other government institutions," said Phil Hogen, former chair of the National Indian Gaming Commission. Simmering tensions erupted last month at Chukchansi when a security team led by former tribal leader Tex McDonald stormed the casino. They were armed with firearms and stun guns and detained security officers. Madera County Sheriff's deputies intervened. Prosecutors filed charges, including kidnapping, false imprisonment and assault against the men. Most have been arrested or have surrendered. McDonald is in jail with bail set at $2.4 million. His attorney did not respond to requests for comment. Meanwhile, Chukchansi's financial losses are unclear because Indian casinos are not required to disclose earnings. But its 1,800 slot machines could generate over $130 million annually, not including table games, hotel stays, food and drink sales, estimated Cheryl Schmit, director of Stand Up for California, which pushes for gambling laws to be properly followed. Chukchansi's turmoil isn't unique. Sheriff's deputies earlier this year headed off a standoff among armed and masked members of the Paskenta Band of Nomlaki Indians and their hired security forces. The confrontation at the Rolling Hills Casino, north of Sacramento, emerged in a struggle for control of the business and the tribe's assets, including a $3 million jet, 162 ounces of gold and $3,300 monthly payments to adult tribal members. One faction accused the other of launching a cyberattack. In Oroville last year, a group at the Berry Creek Rancheria protesting their disenrollment barricaded themselves inside tribal headquarters next to the Gold Country Casino & Hotel. An 11-hour standoff ended when sheriff's deputies threw in a grenade and arrested 20 people. Both Northern California casinos remained opened. Tribal clashes are rooted in history, Schmit said. The U.S. government broke its promises to give Indians land, she said, and sanctioned tribal groups with members who were not affiliated. Schmit said the government sowed the seeds of conflict and hasn't helped resolve modern disputes. "Certainly, tribes in California have suffered generational trauma for it," Schmit said. O'Neill, citing concern for the casino's out-of-work employees, expressed exasperation with the leadership vacuum of the Chukchansi tribe, the Indian Gaming Commission and his court, which has limited jurisdiction over tribal affairs. The federal Bureau of Indian Affairs and the Indian Gaming Commission did not respond to requests seeking comment. Tribal affairs attorney Gabriel Galanda said some lawyers are exploiting casinos to run up fees. "It's all by design, lawyers and lobbyists taking advantage of a void of law and order in Indian country," said Galanda, who represented an ousted faction of the Paskenta tribe. "This is happening in too many places, too frequently. I guarantee you that Chukchansi is not the last of them."

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