patrick.net

Question:

With all of the outsourcing of jobs overseas, and businesses moving to more tax-friendly locations such as Nevada and Texas, is Silicon Valley
doomed to revert back to it's pre high-tech boom status?

Say, as it was around the early late 60's & early 70's before it radically took off?

Or will the brain trust, university research centers, and desireable living conditions keep it as a high-tech hub?

I think theoretical physicist Michio Kaku said something to the effect that Moore's law, coupled with cheap computing capacity/chips will turn it
into a ghost town, or something along those lines.

Just wondering what people think the fate of the Valley is. I grew up in San Jose, late 60s to the late 90s, though I live in Phoenix now.

Oops, double post...

correction: "Say, as it was around the late 60’s & early 70’s before it radically took off?"

I guess it’s going to take a state of emergency declaration from the White House before anything is done. Maybe.
This is not a good thing to hear right now, this levy situation. There is a long storm track developing that has the potential to dump plenty more rain on SF & SCTO this week...could be some hydro issues.

(But of course even with the handful of computer models to choose from, >24 hr forecasts are still 50/50 :) )

Re: Ha Ha's post at 9:15 AM, I saw a similar article in CNN.com this morning, except cnn said that it got its data from the census bureau

http://money.cnn.com/2005/12/23/news/economy/newhomesales/index.htm?cnn=yes

Looking at the graph on the right side of the article made me think, were there similar declines in new home sales during the same period in 2003 and 2004? The article said its the largest decline in a decade, but are there declines every year from Oct-Nov? The number of new homes sold in Nov 2005 is really no less than Dec 2004, so what's the dif? I get a feeling it was an unusually large decline since Oct was abnormally strong. Not that I mind or anything. I'm really glad things are slowing down.

All y'all seem well educated and informed, so I wonder if anyone has kept track of the data for this preceding 2005? If there is a website that has the info, that would be great.

What I'm really hoping is that there are usually some declines in the late fall, but this one is so large it will precipitate less buying through the spring and summer of next year.

"so I wonder if anyone has kept track of the data for this preceding 2005?"

Here's a site that tracks MLS listing data:

http://www.benengebreth.org/housingtracker/

Scott J,
Yes, from what I've gathered, sales and even price declines in the fall are fairly typical. However, this year there was increasing inventory when it typically decreases in the fall, and some expect much greater inventory surges in winter/spring 2006.
Also, the CAR data for November shows a large declining YEAR OVER YEAR sales volume, so it can't be seasonal by definition.

As for slow sales & high inventories, here is a chart that shows what's happening to the inventory (I think the data is for east SFBA, not sure though):
www.realtyworldcal.com
So, the case for a huge spring inventory is getting stronger.

Scott J,
Oops, my mistake; I thought HaHa's link was for CA November 05 sales volume, which show >10% year over year sales volume decline:

www.car.org/index.php?id=MzU3MjI=

Wow look at the treasury yields:

.5 yr 4.11
2 yr 4.34
3 yr 4.32
5 yr 4.30
10 yr 4.36
30 yr 4.54

(source: finance.yahoo.com/bonds/composite_bond_rates)

errr...the yahoo chart for the yield curves is dated 14Dec05....?
I didn't remember this yield condition back then...anyone else?

Yahoo...becoming unreliable with some things lately, it seems.

Thanks for the links San Francisco RENTER and SJ_JIM!

Although the links were for existing home sales, I think the numbers from these links can translate to new home sales too.

I live in the bay area, so the realtyworldcal.com link is still relevant to me SJ_JIM.

Scott J.

Scott J,
You're welcome.
Well, I may as well empty some of my links on you:

Here you can get home sale data by zip code:
melissadata.com/lists/ezLists/ezHomeOwners.aspx

Here, someone has put together long-term house price charts for many areas based on government data. There are also very detailed charts for the SF bay area (but not updated too frequently, I think):
sonic.net/~jrmagers/re/

Here are nice charts for sacto/central valley RE sales:
golyon.com/pricingtrends_f.htm

Also, these folks have compiled DataQuick weekly housing data for bay area counties, including breakdown by resale/condo/new homes...but it is only for 2005:
viewfromsiliconvalley.com/id141.html

See "Weekly housing stats" at top right of the page.
They also have some interesting articles.

Enjoy!

SJ_JIM,

Thank you again for all your links, these will provide me with some very informative reading over the holidaze.

Scott J.

Had a quick conversation w/a friend who sells screenrooms/awnings/patio covers. He says people better buy 'em now before being priced out of the market.
Prices are going to shoot up next year due to increased costs of shipping the raw material (aluminum). Also, perhaps aluminum prices are up like copper, etc...not sure...haven't checked.
At any rate, this reflects my feeling that increased energy costs have been a little slow to creep into consumer prices.
I mean, seriously, aftera a 1 month small spike in CPI, than a decrease the next month, people were saying "oh look we shrugged off katrina-related oil price spike and now everything's hunky dory." I don't necessarily buy it.
I think there will be surprising (to some) inflation numbers throughout Q1 2006, and the Fed may have plenty of reason to continue "measured" increases. But then again I'm not good at predictions. :)
Any other opinions?

"...and made only to last until the very first wave of Interest-only NAAVLP’s EXPLODE into a seven-sigma palimset, setting off a “fantasmagorical resonance” of hallucinagetic color and light"

Jack-
LMAO!
So when are you going to paint that scene?

Nice confession Jack.

Not quite St. Augustine or Dostoyevski's Notes from the Underground
but coming out of denial is definitely a first step in recovery.

Too bad 99.99% of your Clintonesque generation still believe the Coke
commercials when they nostalgically-pimp Woodstock 1969 saying, "we changed the world for the better!" Actually the Boomers really screwed it up as they tuned in, turned on and dropped out (acid).

Given the direction places like Oregon, California, and Vermont are going, I think many Boomers may opt to end it all with one last collective middle finger to the establishment through assisted suicide and euthanasia. No doubt, some will choose to fasionably "check out" as they have lived--a la Hunter S. Thompson--on their own selfish terms.

Oh, sorry Jack. You were talking to Surfer-X, not me.

Anyway...

I can see it now:

"Jack Kinkade: Painter of the Apocalyptic Post-Bubble Lightâ„¢"

Eh?...Sorry! ;)

Selling my home in Southern California last year was the BEST decision I have made. I moved to Colorado Springs where my new mortgage is almost paid off. (Thank you California RE market)

Margie-
I can understand where your coming from: subsituting a little less income for a lot more life. A client of mine moved from the Bay Area, trading his small shitbox for a lovely hilltop home in Boulder. I think if you like the outdoors, the lifestyle tradeoff can be a net gain. Good luck out there!

well I just stockpiled as much cement as I can. my basement is now filled with sacks of cement. i will let you know when I get rich.

And you know, it's very hard to blow bubbles with cement; those increases are here to stay.

That is one flat yield curve. Interest rates aren't going to bring this bubble down--it's going to keep going untill there's not a single soul left who can afford to buy. We're basically there right now, and it ain't gonna be pretty.

Did you see the 10-yr yield action today? It’s fallen to 4.38%, the same level before the 10+ rate hikes since last year!

Yes. Joy to the world!

Marina is Prime

any one on this message board has experience and knowledge of the forex markets?

specifically want to know if going long on canadian loonie,swiss franc,
australian dollar are a hedge for the decline of usd
thanks

Jack, you will not sell me on the pink toilet no matter WHAT means of persuasion you think you have up your sleeve. Pink is for...other stuff...not toilets.

"I think pink toilets are very funny."

I will give you that. If you're going for a toilet with a sense of humor, pink is definitely THE color.

And BTW, flak, don't stop following the dreams. there IS no other way to live.

"any one on this message board has experience and knowledge of the forex markets? Specifically want to know if going long on canadian loonie,swiss franc, australian dollar are a hedge for the decline of usd"

I have zero experience but a good amount of knowledge of forex, and recommendation one is to leave it alone--too many variables in that game. Next, I doubt that going long on the loonie is going to hedge you against a falling dollar too much--reason for that is the US economy is the main consumer of Canadian export commodities. So when the dollar goes down it should drag the loonie down quite a bit too as our economies are very closely linked through NAFTA. Swiss and Aussie money have close to zero correlation with the US dollar, so again, not such a good hedge. Anway, if you want to play the forex game, it's YOUR money, but I couldn't sleep at it night in that casino!

"And BTW, flak, don’t stop following the dreams. there IS no other way to live. "

Oh crap, I've started sounding like a motivational calendar. The quote above will appear on the same month as the Jack Kinkaid, "painter of light-filled voids" winter scene.

Heh, nice x-mas card, Jack...you can remove tongue from cheek now :)
By the way a former co-worker of mine was at Altamont...maybe you guys shared a bong or 2???

Hmmm...where to park the proverbiel wad...faux paint business (is there a faux paint investment trust fund yet???)...cement...I dunno.

pink...LOL!

BTW I hate shopping; but it was nice that the stores (Target, Best Buy) were pretty empty today...I might even go back tomorrow LOL.

"Hmmm…where to park the proverbiel wad…"

Oh no, do we really need to have another parking the wad discussion? I thought we'd already settled on the inflatable doll.

I thought we’d already settled on the inflatable doll
LOL I think I may have missed that one...sounds good to me...(now to find a prime doll...Marina is Prime, no?

iceman's "park the wad in an inflatable doll" post was so funny it really should be at the top of the "Best of the Blog" posts list, if we ever do a compilation. I would go back and find it, if i weren't so lazy...

Marina Prime may actually BE an inflatable sex doll, for all we know.

That would explain why he is so full of hot air...

That would explain why he is so full of hot air…

But when the air cools, it will lose rigidity.

"But when the air cools, it will lose rigidity."

Peter P! LOL. I didn't know you could be so lewd....you've been holding out on us!

Hey, I've been lobbying for that thread for months! We NEED a parking the wad thread.

Peter P! LOL. I didn’t know you could be so lewd….you’ve been holding out on us!

Huh?

Oh stop it Peter P. Don't think you can get away with an innocent little "Huh?" now. After the Huh thread, we all know the word has various lewd layers of meaning, anyway.

Hehe...PeterP invoked "Huh?"
Speaking of "Huh?": I am copying files to CD Rom because my 5-YO Dell is dying...hard drive finds bad sectors everytime I startup . I think it was the "Huh?" thread that did it. Not saying the "Huh?" thread was a bad thing or anything...I'm just saying.... :)

wow, this blog moves fast. I'll try to catch up quick:

1. DiNor, thank you for your thoughtful response.

2. Baby boomers: Check out the theory of "The turn of four". It defines every generation as 20 years, and says basically that each generation goes from most responsible to least in a series of four. It is the "Kondratief" cycle that influences the character of generations. Guess where the Baby Boomers fall? It explains why they are such hypocrites (present company excluded, of course).

3. Peter P: RE Chaos theory: it's not really that complicated. The turn of 4 and the Kondratieff cycle are two examples of patterns that arise in chaotic systems without a point of control. I studied Kondratieff cycles in my Political Economy class in school over 10 years ago. At the time, the cold war was just ending, and we used it to understand the rise and fall of empires in the context of "balance of power political/economic systems". The BoP system is also a pattern that repeats from the Peloponesian war, through the cycles of European hegemony. It is ***enlightening** when you take these very sophisticated (yet really uncomplicated) tools and apply it to domestic politics. ever wonder why the electoral map of 2004 looked like the electoral map of 1860? If you're still reading, my point is the "Invisible hand" and market efficiency is best understood in the context of patterns. The Buddhist concept of impermanance(sp?) is also very illustrative. "The universe is in a state of everlasting becomming". To ask if a market is efficient is to murder the market and stop it in its tracks. Markets are in an ever changing state moving from efficiency to inefficiency and back. To stop the market to measure it denies its organic nature. As a participant in the market, you are helping to either move it towards efiicieny or away from it based on the soundness of your decision. In aggregate, all investors combined move the market back and forth between efficiency and inefficiency. This aggregate is the pattern called "The invisible hand". Over time, capital is allocated efficiently, despite no single point of control. You can make money because you are both trying to beat the market, and at the same time, you ARE (at least in small part) the market (invisible hand). Part-whole, fractal relationship (and what not). Esoteric as hell, yet powerful.

4. Peter P: I haven't read the misbehaviour of Markets, but I am reading Ron Insana's book on how to identfy a bubble. It is enlightening so far.

5. Re Renting/Selling too soon: I sold a house by the beach in 2003 just b4 it really went up. How do I feel? Blessed. I made money, the buyers will give back their "Gains" and then some. It is already happening. RE renting, remember that except for the very rich, no one is a homeowner, just a homedebtor. As the market continues to turn, they will get what they have coming to them. Just take the high road. BTW, homeownership isn't as glamorous as you think.

6. Parking the wad of cash? Check out the thread on Ben Jone's blog. Great ideas? Buy some classic muscle cars, CHEAP.

7.FOREX: I'm no expert (I have friends who are). I own Axel Merk's fund (a little bit). It is better to have a professional give you diversified and manged exposure than to just buy Loonies. Note: This not investment advice. DO NOT speculate. You can insure dollars that you own by buying gold and foreign currency to make a win-win no matter what the dollar does. That is the "Proper" use of options and futures and such. It's called hedging.

My brain is now spent, and the voices in my head are at it again. That's it for now.

--Deo Vindice.

Reverse outsourcing is happening in the form of THIRD WORLD companies buying American/European companies and paying American/European wages. This might cause house prices to appreciate, realtors might say!

You know what will cause housing prices to appreciate? Global warming.

Everything expands with heat. Housing price is no exception.

Global warming or not, may everyone have a warm holidays with family and friends. :)