A record 0.99 percent of US home loans were entering the foreclosure process in the first three months of 2008, the Mortgage Bankers Association said Thursday. The rate of failing loans was led by a growing wave of subprime borrowers.

Following similar cuts by United Airlines, Continental Airlines said Thursday it will trim 3,000 jobs, or 6.5 percent of its workforce, in an effort to counteract record fuel costs. The Houston-based carrier also will reduce flight capacity by 11 percent.

The presidential campaigns of John McCain and Barack Obama said they've begun negotiations to hold 10 town hall-style debates suggested by McCain, who held 101 town hall meetings in New Hampshire in winning the state's GOP primary. Meanwhile, Obama instructed the Democratic National Committee Thursday to adopt his policy against accepting donations from federal lobbyists and political action committees.

Gov. Arnold Schwarzenegger (R) of California issued the first statewide drought declaration since 1991 and ordered water transfers to the driest areas. He also warned residents and water managers Wednesday that two years of below-average rain and snow should compel them to cut their water use.

Chicago businessman Antoin "Tony" Rezko, who once raised money for Sen. Barack Obama's Illinois campaigns and was involved in a real estate deal with him, was convicted Wednesday in Chicago of fraud and money laundering, among other charges. Sentencing was set for Sept. 3. Obama was not implicated in any wrongdoing and said the case shined a spotlight on needed reform."

As part of a "relentless" pursuit of the highest echelons of the Colombo crime family, authorities arrested acting mob boss Thomas "Tommy Shots" Gioeli Wednesday at his Long Island home. Eight associates, including three already in prison, were also arrested of suspected coast-to-coast Mafia crimes.

For the fourth time in 11 years, the Detroit Red Wings won the National Hockey League's Stanley Cup, closing out the Pittsburgh Penguins Wednesday night in Game 6 of a best-of-seven championship series. The Red Wings were led by the "Swedish Seven," including Nicklas Lidstrom, the first European to captain a Cup winner.

At a Games for Change conference in New York, retired Supreme Court Justice Sandra Day O'Connor introduced an educational video game about the judiciary. She helped develop "Our Courts" to teach children how the courts work and show that, despite partisan criticism of them, they are independent institutions.

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