patrick.net

Well lessee,
some portion of Californians, 20 M at the time, coveted Detroit in 1975. Even though I never did meet anyone here in the Bay Area like that in those days, though there was a girl in my high class who came here with her family a couple of years after that from Detroit.
The newly wealthy portion of 20 M Californians coveted Detroit in 1975? I am skeptical but OK If you say so.
Hardly the same numbers of the newly wealthy portion of the 2 B Asians who coveted the Left Coast Fortress communities.

sybrib says

Well lessee,

some portion of Californians, 20 M at the time, coveted Detroit in 1975. Even though I never did meet anyone here in the Bay Area like that in those days, though there was a girl in my high class who came here with her family a couple of years after that from Detroit.

The newly wealthy portion of 20 M Californians coveted Detroit in 1975? I am skeptical but OK If you say so.

Hardly the same numbers of the newly wealthy portion of the 2 B Asians who coveted the Left Coast Fortress communities.

There is actually more wealth going to Asia from California now, then coming from Asia. In fact several of my Chinese co-workers have already picked up their families and went back to China, because there are more opportunities to make money, there. Why would wealth want to come here, if Asia is where all the action is?

Could be.

Probably The Fortresses will do just fine if the net in the margins for the overall state is outbound.

Or maybe those are just the subset of ones who can't stomach Fortress Arithmetic, and heaven forbid living somewhere in our region outside of The Fortress Walls.

sybrib says

Could be.
Probably The Fortresses will do just fine if the net in the margins for the overall state is outbound.
Or maybe those are just the subset of ones who can’t stomach Fortress Arithmetic, and heaven forbid living somewhere in our region outside of The Fortress Walls.

So, why would they go back to Asia, if you say that arithmetic is even worse there?
I talked to some of those people who left, and they all say that Bay Area reputation as some kind of a "glamor" city is nothing but a big myth. The fact is, Bay Area no longer has a monopoly on tech jobs, or good education, or the Sun, or anything else, for that matter. The collapse of the Bay Area prestige, is really, not at all, unlike Detroit after the collapse of the auto industry. This is quite a turn-around from the denial folks like you who still think that Bay Area is really something "special".

dunnross says

if you say that arithmetic is even worse

Did I say that?

The Fortress communities are indeed bargains for wealthy people from crowded canyons of Shanghai and Mumbai and other such places all over the world.

But they are not bargains for the Petty Bourgeois folks from anywhere, not Petty Bourgeois from Asia nor Detroit nor Chicago nor even (like myself) the Bay Area, who are "not wealthy enough" for the Basic Arithmetic of The Fortress to make sense. But that's OK if you don't lose your face by renting (like you) or by living (like me) among the working class folks in a non-Fortress neighborhood like me.

sybrib says

dunnross says

if you say that arithmetic is even worse

Did I say that?
The Fortress communities are indeed bargains for wealthy people from crowded canyons of Shanghai and Mumbai and other such places all over the world.
But they are not bargains for the Petty Bourgeois folks from anywhere, not Petty Bourgeois from Asia nor Detroit nor Chicago nor even (like myself) the Bay Area, who are “not wealthy enough” for the Basic Arithmetic of The Fortress to make sense. But that’s OK if you don’t lose your face by renting (like you) or by living (like me) among the working class folks in a non-Fortress neighborhood like me.

The Fortress has nothing special to attract these wealthy people to come here. For weather and scenic beauty, they might as well go to the North Coast of Chile where it's warmer and much more scenic. The ocean is too cold for swimming. There aren't many cultural amenities. The business is no longer good here. This is basically a city on it's way out. Why would they like to come here, as opposed to hundreds of other places around the world?

I don't know about those places. Maybe they are going to those places too. They are also very much attracted to here.

Just go drive around The Fortress and see for yourself, or go to the public K-12 and look at the kids.

sybrib says

I don’t know about those places. Maybe they are going to those places too. They are also very much attracted to here.
Just go drive around The Fortress and see for yourself, or go to the public K-12 and look at the kids.

That's the point. In some areas like Cupertino, already 75% are from those areas. If only 10% of those people all decided to pick up and go somewhere else, prices would drop like a rock. All your point is making is that this place is already an "Overcrowded Trade", and it's time to dump this "Bay Area Fortress" stock for better pastures someplace else.

dunnross says

your point is making is that this place is already an “Overcrowded Trade”, and it’s time to dump this “Bay Area Fortress” stock for better pastures someplace else.

Yep.

Besides the Basic Household Arithmetic, there's the Basic School Arithmetic obsession with API.

API tracks how ALL the kids did in the school. It does not predict how YOUR kid will do. Funny how some Petty Bourgeois folks in fields like Finance, and engineering PhD's, ignore very basic statistic concepts like mean and distribution when it comes to assessing the Best Value for education.

The first order determinant of how their kids will do is who the parents are and the parents' Tiger-Parenting.

Even more hilarious is how teachers and school administrators will take all of the credit for the results of the Tiger-Parent ethic, like the Unclothed Emperor all are in awe of how "great" the "schools" and "teachers" are. The reality is that those kids would do just as well in an API index if they were homeschooled on the internet.

Like the pages who escorted the unclothed emperor around his village, Realtors pronounce the "awe" of those regal API score schools and the staff there.

But dunross, API obsession probably is rooted in some kind of cultural norm. It is hard to undue centuries of genuflection to god of Civil Service Exam standardized tests in a generation or even in a century. Until that happens, they ain't dumpin the "stock".

sybrib says

But dunross, API obsession probably is rooted in some kind of cultural norm. It is hard to undue centuries of genuflection to god of Civil Service Exam standardized tests in a generation or even in a century. Until that happens, they ain’t dumpin the “stock”.

That didn't stop RE prices from crashing before in predominately asian cities like "Hong Kong", Singapour & Tokyo.

dunnross says

That didn’t stop RE prices from crashing before in predominately asian cities like “Hong Kong”, Singapour & Tokyo.

Actually, another deeply-rooted cultural trait of Asians is their attraction to gambling, and, like all gamblers, they start to panic at the first sign of weakness. When the ground starts to shake in these "Fortress" areas, there will be a stampede for the exits, like nothing you've seen.

ptiemann says

They won’t care about their credit as they leave the country.

Not so fast. Most of their kids have only ever lived The Fantasy Life in The Fortress; not in places like Communist China (nor in Taiwan with its military obligation).

Can the people in Detroit do something else besides the Auto?

The house is almost given away now.
Shouldn't the economy in Detroit booming because the living cost is low?

dunnross says

The collapse of the Bay Area prestige, is really, not at all, unlike Detroit after the collapse of the auto industry. This is quite a turn-around from the denial folks like you who still think that Bay Area is really something “special”.

When the Auto industry was hit with cheap imports from Japan, the same wave hit Silicon Valley Tech industry. We once produced 70% of world Semiconductors, which powers pretty much everthing these days. The Japanese in both cases dumped their supply below their own production costs to kill off US Auto and HT industries.

Detroit was widely publized but the Silicon Valleys outcome wasnt.

Why do we still call it "Silicon Wafer" Valley these days when we dont even make it anymore ?

The auto takes 10+ years for people to realize that Japanese cars are better and reliable.

The chips only take 2+ years to verify that Chinese electronics are reliable.

US got nothing this time. Great Recession #2 is coming.

xenogear3 says

The auto takes 10+ years for people to realize that Japanese cars are better and reliable.
The chips only take 2+ years to verify that Chinese electronics are reliable.
US got nothing this time. Great Recession #2 is coming.

No, I don't agree. There will not be another Recession for many years. That's because this one will be a Depression. A Greater Depression.

Though I have not yet "seen with my very own eyes" the decline in prices in the "prestige" areas, there are strong indicators from my own observations that prices are indeed dropping even in the so called "Fortress" and "Prestige" areas.
- For certain houses that come up for sale in these areas, a look at history on zillow or redfin will show that the prices are below or at the same levels as when some of these very same houses were sold previously in 2003-2004 year frame.
- In the past 3 weeks, I came across 2 houses (in 2 "prestige" neighborhoods) that were bought by "all cash purchasers" from mainland china in 09 and now they were dumping them because they found bigger properties to invest in (my take is that they are pulling their money out - the houses were listed slightly below or at the same level as their previous purchase price - that means a 6 figure loss if realtor commission is factored in)
- A lot of the old timers in the bay area (I mean the original house owners who are now in their 70s and 80s) are putting their houses on the market and moving out - seems that they fear a big price drop is coming up.
- A lot of Mandarin speaking bay area techies have moved to mainland china as the prospects for them over there are phenomenal. I see it in my workplace as well as my neighborhood. I tend to agree that there is more money moving out of here to China than there is coming in the form of real estate investments.

dunnross says

vapor wealth

Haha. I like that.

ptiemann says

Prices have a long way to drop, there is no real reason why an old 3/2 in a smelly place like Santa Clara costs $600k when you could get the same e.g. in beautiful Las Vegas for $80k.
Only temporary factors like high paying jobs and school district. The jobs disappear already as thomas.wong points out periodically (See his favorite link about the “shrinking silicon valley”) and the good schools .. will become mediocre once the tigermoms and families have packed and returned to their home country.
I strongly suggest renting, even though the monthly rent payment may be higher than a mortgage payment.
You have more security as a renter.

Just 500 years into its birth and development and you think USA will be like this forever? You need to learn history in terms longer time span(decades,centuries etc.). If there is going to be a downfall, at some point there must be a beginning way before it actually happens. :)

sybrib says

But not in The Fortresses along the Left Coast.

1975 was before they were minting new wealthy elites who coveted those Fortresses, in India and Communist China (thank you very much, outsourcers), and the purchasing power of our “nominal” currency was not going down in relation to theirs. Also there was no H-1 floodgates then.

The fortresses were different in the 1970s. Why would they stay constant now? If our economy takes a turn for the worse, why would Indians and Chinese continue to come here?

In addition, H-1 floodgates? Where are the floodgates? Last I checked, tech companies were lobbying to increase the quotas. Until the Great Recession, the number of applications was far exceeding the quota, even on the first day they took applications. If we are to continue to grow our economy, we should encourage more innovators to come here.

bubblesitter says

If there is going to be a downfall, at some point there must be a beginning way before it actually happens.

http://news.google.com/newspapers?id=vRAhAAAAIBAJ&sjid=oHIFAAAAIBAJ&pg=982,4924505&dq=japan+enter+semiconductor+industry&hl=en