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Hotels in Tucson, Ariz., and Hilton Head, S.C., also are about to default on their mortgages. That pace is expected to quicken. The number of late payments and defaults will double, if not triple, by the end of next year, according to analysts from Fitch Ratings Ltd., which evaluates companies’ credit. “We’re probably in the first inning of the commercial mortgage problem,” said Scott Tross, a real estate lawyer with Herrick Feinstein in New Jersey. That’s bad news for more than just property owners. When businesses go dark, employees lose jobs. Towns lose tax revenue. School budgets and social services feel the pinch.

Companies have survived plenty of downturns, but economists see this one playing out like never before. In the past, when businesses hit rough patches, owners negotiated with banks or refinanced their loans. But many banks no longer hold the loans they made. Over the past decade, banks have increasingly bundled mortgages and sold them to investors. Pension funds, insurance companies, and hedge funds bought the seemingly safe securities and are now bracing for losses that could ripple through the financial system. More

JENNIFER STEINHAUER
Facing Deficits, States Get Out Sharper Knives
Some governors, including Arnold Schwarzenegger in California and David A. Paterson in New York, have called special legislative sessions to deal with the crisis. Others are demanding hiring freezes and across-the-board cuts. A few states are finding their unemployment insurance funds running dry, just as the ranks of out-of-work residents spike. In Michigan, to reduce overtime costs, fewer streets will be salted this winter. In Ohio, where the unemployment rate is above 7 percent, the state may need a federal loan for the first time in 26 years to cover unemployment costs. In Nevada, which is almost totally dependent on sales taxes and gambling revenues, a health administrator said the state may be unable to pay claims in a few months. In Oregon, moreover, Gov. Ted Kulongoski, a Democrat, has proposed a $1 billion economic stimulus plan centered on infrastructure improvements, which he envisions would be paid for by raising the state’s gas tax by 2 cents per gallon and increasing a host of vehicle fees. More

This from Bloomberg:

“As many as 27 states face deficits totaling $26 billion, according to a letter distributed to Congress last month by the National Governors Association. ‘The numbers are astounding in terms of lost revenue,’ says Leonard Santow, a former Federal Reserve economist who is now a managing director at Griggs & Santow in New York.”

The small town of Harper Woods, Michigan is at the center of an international scandal involving allegations of bribery, the Saudi royal family, and a $100 billion dollar fighter jet contract. Harper Woods is suing a British defense contracting firm, BAE Systems, alleging that the company engaged in illegal behavior, including paying over $2 billion in bribes and kickbacks to the former Saudi ambassador to the U.S., in connection to a large fighter jet contract BAE had with Saudi Arabia stemming back to the 1980s. Why is this small town of less than 15,000 residents involved? Because the town invested part of its public employees’ retirement fund, about $135,000, in BAE Systems and now the town says it wants to make sure the company is spending shareholder money properly. More

Salon
Ickes — deputy chief of staff in the Clinton White House and one of the great rules mavens of the Democratic Party since the 1960s — had come back from the three-hour break looking distraught as he silently paced back and forth before the committee reconvened. Confronted with the apostasy of the Clinton defectors, Ickes thundered before the Michigan vote, “This motion will hijack, remove, four delegates won by Hillary Clinton. This body of 30 individuals has decided that they’re going to substitute their judgment for 600,000 [Michigan] voters.”

After the committee adjourned, Steed, a former DNC official, explained the logic behind the compromise in an interview, saying, “Our goal was what could be done to unify the party. The only unity proposal on the table was the Michigan proposal, so we accepted it.” Kamarck, a former top Gore aide, put it simply, “It was the only answer.” More

CNN
MEMBERS of a Democratic rules committee voted on Saturday to seat all of Florida’s and Michigan’s delegation to the party’s national convention and give their delegates a half vote each. A first vote, which would have seated all of Florida’s delegation with full voting privileges, failed.

After the results were announced, spectators started to boo and his and some started chanting, “Denver! Denver!” the site of the party’s convention in August. Democrats fear that a protracted battle over the issue all the way to the convention could split the party and weaken it’s chances of winning the White House in November. The panel must now vote on how to address Michigan’s disputed delegates. The Democratic National Committee’s Rules and Bylaws Committee is hearing the two states’ appeals on its decision to strip all of their delegates because they moved their primary contests earlier on the calendar. More

Hillary Clinton supporters are gathering for what could be her last big stand Saturday, as the Democratic Party’s rules committee meets to decide how to resolve a dispute over Florida’s and Michigan’s 368 delegates to the Democratic National Convention.

With only three primaries remaining, in Puerto Rico on Sunday and Montana and South Dakota next Tuesday, the Saturday meeting could be Clinton’s final major effort to overtake Obama. She needs a big victory from the 30-member panel, which is expected to meet all day, and her supporters plan a rally to help press her case.

The math and the process confronting the rules committee are complex, but it boils down to this:

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Nedra Pickler/Ap
A Democratic Party rules committee has the authority to seat some delegates from Michigan and Florida but not fully restore the two states as Hillary Rodham Clinton wants, according to party lawyers. Democratic National Committee rules require that the two states lose at least half of their convention delegates for holding elections too early, the party’s legal experts wrote in a 38-page memo.

The memo was sent late Tuesday to the 30 members of the party’s Rules and Bylaws Committee, which plans to meet Saturday at a Washington hotel. The committee is considering ways to include the two important general election battlegrounds at the nominating convention in August, and the staff analysis says seating half the delegates is “as far as it legally can” go. Saturday’s meeting is expected to draw a large crowd, with Clinton supporters among those encouraging a protest outside demanding that all the states’ delegates be seated. More

The Associated Press
Tuesday May 13, 2008, 10:39 AM
MIDLAND, Mich. — The state has extended advisories for consuming wild game from the Tittabawassee River and Saginaw River flood plains because of dioxin contamination from Dow Chemical Co. The state announced Monday that samples confirm high levels of dioxin and dioxin-like compounds in animals. Dioxins previously found in game along the Tittabawassee River had prompted a 2004 advisory. Officials say their advisories now include whitetail deer, turkey, squirrel, wood duck and Canada goose.
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