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Allan from Fallbrook
ParticipantI grew up in the Mountain View/Los Altos (off San Antonio Road and Foothill Expressway) area, and can attest that there are huge differences in the quality of the various communities just in Santa Clara county.
There really is no comparison between parts of Los Altos, Los Altos Hills and Palo Alto to, say, Sunnyvale, San Jose or Milpitas. However, prices per square foot in even in some of the rattier parts of Sunnyvale and San Jose are holding steady at around $700/sf.
You get up into Marin County and the prices can climb upwards of $900/sf in Greenbrae, Larkspur and Millbrae. These towns are not upscale like Sausalito, but command very high prices due to the “Marin County” cachet.
While I agree that the SF/Bay Area is probably no different than LA, Orange County or San Diego, prices there have shown a surreal ability to defy gravity over the years. That is not to say they won’t come down, or haven’t come down in the past (they have), just that they are remarkably sticky on the way down.
ParticipantI grew up in the Mountain View/Los Altos (off San Antonio Road and Foothill Expressway) area, and can attest that there are huge differences in the quality of the various communities just in Santa Clara county.
There really is no comparison between parts of Los Altos, Los Altos Hills and Palo Alto to, say, Sunnyvale, San Jose or Milpitas. However, prices per square foot in even in some of the rattier parts of Sunnyvale and San Jose are holding steady at around $700/sf.
You get up into Marin County and the prices can climb upwards of $900/sf in Greenbrae, Larkspur and Millbrae. These towns are not upscale like Sausalito, but command very high prices due to the “Marin County” cachet.
While I agree that the SF/Bay Area is probably no different than LA, Orange County or San Diego, prices there have shown a surreal ability to defy gravity over the years. That is not to say they won’t come down, or haven’t come down in the past (they have), just that they are remarkably sticky on the way down.
ParticipantFLU: Why do Raiders fans riot (regardless of outcome)? Because they’re Raiders fans! Kind of a “cogito ergo sum” sorta thing.
I remember going to Raiders – Steelers games during the 1970s with my dad and they had Oakland PD outside of the Oakland Coliseum in riot gear, just in case.
Bear in mind, we also used to go to 49er games, too, and it was night and day. There were maybe a sum total 8,000 fans at Candlestick (no, it ain’t anything other than “the Stick” and never will be), and they were known as the “49er Faithful (pre- Bill Walsh and Joe Montana days). 49er fans are a lot like Charger fans (yeah, this is a dig here), in that they like to sport their colors when winning. Raider fans stay with The Nation through good times and bad (more of the latter lately).
ParticipantCDMA ENG: Hey, I’ve been to some great parties at ASU! Be proud of your alma mater. Hell, I went to SDSU, and constantly have to put up with my buddies who matriculated at Stanford and Bezerkley demeaning my fine CalState education.
As far as SD Sundevil goes: We are looking at the largest credit bubble in financial history. His (or her) referring to it as a housing bubble does indeed underscore his (or her) ignorance as the housing bubble is simply one component of the larger credit bubble driven by years of the Fed’s excessively loose monetary policy.
Anyone who lacks even a passing familiarity with basic Econ101 type principles shouldn’t be bloviating about this site’s inability to properly call the bust.
SD Sundevil: Next time you are at Barnes & Noble picking up your copy of the Utne Reader, add The Economist, The Financial Times and a Wall Street Journal to your reading selection. Bring a dictionary for the hard words and spend a weekend educating yourself.
Get back to us following.
Participantsjk: As a former CFO, I am a pretty decent hand with MS Excel, and have programmed with Visual Basic for Excel. I have seen some of these financial modeling spreadsheets that quant guys have put together and they are simply amazing. They blow anything I am capable of doing with that program clean out of the water.
The one thing every one of these models share is this, however: They have never been tested in the real world. All of the assumptions are exactly that: Assumptions.
What everyone who assesses risk right now is extremely nervous about is what happens when the real world intrudes on the assumptions. The general consensus is that, like LTCM back in 1998, it ain’t gonna be pretty.
ParticipantMichael: LTCM demonstrates what unbridled arrogance and a mistaken view of your own superiority gets you.
If my two choices are some schmoe who just read Robert Kiyosaki (a true schmoe in his own right) or some Ivy Leaguer, well, gee, I guess I’ll go with the Ivy Leaguer.
As far as LTCM demonstrating how complex capital markets are: Not really. The geniuses running LTCM were and are no different from the quants putting way too much faith in the alchemical nature of their precious computer models. The idea that these guys are somehow more attuned to the nature of risk and its proper dispersion is a joke.
All of this risk supposedly being better managed and better spread is about to blow up in credit markets throughout the world.
A good friend of mine is a Stanford MBA, and a two decade long veteran of the investment banking industry and he has been using words like “catastrophe” and “disaster” to describe the impending meltdown. These selfsame “sharp” Ivy League types that you place so much faith in are absolutely terrified right now. And for good reason. We’ve been playing a rigged con for the last 20 years, and the party is just about over.
Participantgreensd: Just started “Traders, Guns, and Money”. Have you read Lowenstein’s “When Genius Failed”? It is about the LTCM debacle, and a very good read.
A good buddy of mine is a former Montgomery Street Securities and Bear Stearns dude. I fell out when you opined about the hookers and blow. You nailed that one on the head!
Less funny is your assertion about the rest of us picking up the tab. Sad, but true.
Participantcsr_sd: You said it! Sharp, Ivy League types that have given us: RJR/Nabisco, Eastern Airlines, Long-Term Capital Management, Enron and Tyco. Uh, yeah, okay.
As to “Efficient Market Theory”, well that one has pretty much gone the way of the dodo.
Long-Term Capital Management (LTCM) probably represents the sharpest group of financiers going, back in their heyday. They employed Fischer Black and Myron Scholes (co-authors of the Black-Scholes Formula for options valuation, and Scholes went on to win the Swedish Central Bank’s prize for achievement in Economics – the finance world’s Nobel Prize). They were widely considered the “smartest guys in the room” by all of the major investment banking houses (Goldman Sachs, Bear Stearns and Lehman Bros) and went on to nearly blow up the bond world in 1998 due to an over-leveraged hedge position, necessitating a major bailout by the Federal Reserve Bank of New York, Sandy Weill and Citibank and others.
So, if you truly believe that these smart Ivy League types are helping ensure “efficient markets”, pick up a copy of “The Wall Street Journal” or “Financial Times” and read up on derivatives, options and “off book” instruments (QSPEs – Qualifying Special Purpose Entities – an old Enron standby).
Get back to me when you’re done.
ParticipantSDR: We studied Operation Market Garden (Holland, 1944) when I was in War College in my Army days. What an absolute disaster. Terrible plan, and all because Montgomery wanted in to Germany before Patton. The movie “A Bridge Too Far” chronicles this. Watch it if you have a chance, if for no other reason than it has pretty much every Hollywood star from the late ’70s in it.
As a Raider fan, I really don’t have anything against the Chargers. I reserve my hatred for the Chiefs and the Broncos. Some of my best football experiences were watching Chargers – Raiders games in the 70s with my dad at Oakland Coliseum. These were passing duels between Fouts and Stabler, and whoever got the ball last generally won. What the Spanos family and AJ Smith have done to this franchise is criminal. Of course, what Al Davis has done to the Raiders over the last decade is just as bad.
As far as the Padres go, look on the bright side: You could be a Giants fan (which I am). Boy, where is Dusty Baker when you need him most?
ParticipantRustico: Nice. Yup, lemme hitch up my rope belt (nod to Jethro Bodine) and go feed my pitbulls out on the back forty.
While I now own Labradors, there was actually a point where I did have a Rottweiler or two. That, however, was more of a nod to my Germanic heritage (I grew up with Rotties and Alsatians), than being involved with the gridiron thugocracy.
ParticipantRustico: Thank you for the compliment. Sincerely.
However, the “I can’t believe you like football” tagline makes me a little nervous. It sounds like somewhat of a left-handed compliment (I think). You’re not buying into the commonly held misperception that everyone involved with football is an idiot, are you?
Of course, I do live in Fallbrook…
Participantafx114: Bang on the money. Take about 5 minutes and (try to) have a conversation with your typical American teenager (if they’ll deign to speak with you), and the ignorance they display is terrifying.
Most of our high school students cannot identify various European countries on a map, let alone name American state capitols. Nice to see that the French appear to be sharing our ignorance.
What is truly sad is that American (and especially Californian schools) used to be the envy of the world. No more.
And I agree with your view on the “New Earthers”, who argue that the world is only 6,000 years old. Oy vey. Strict creationism and Intelligent Design advocates are unbelievable. Displaying that level of mendacity in this day and age make you long for the Middle Ages.
ParticipantSD Realtor: I might be drifting a little too much here, but your reference to WWII reminded me of a pair of pictures my uncle had on his credenza at work.
He was a Marine fighter pilot in the Pacific War and was invalided out in early 1945 with 20mm cannon fragments in his back and shoulder from a dogfight he was in.
He had two pictures of Pearl Harbor. The first was from December 8th, 1941, the day after the Japanese attack, when the navy base was in literal ruins. The second was from late 1945, when the various fleets had returned after war’s end and all you could see were carriers, battleships, etc from one end of the base to the other. Truly an awesome display of American power.
He said he kept the two photos close by to remind him of how things change, and the importance of perserverance, even when things look bleakest. That message has stuck with me to this day.
As for the Chargers: I would offer words of hope, but I honestly don’t think there are any. My only fear as a Raiders fan is that Cowher is really waiting in the wings.
ParticipantPatientlywaiting: Thanks, as well. Blame Catholic schooling and reading too many history books.
TG: For a guy that will use nearly any excuse to talk football, you sure ducked the Chargers question quickly! Or maybe it was just me…
Speaking of housing prices, I spoke with my buddy in Los Altos again this weekend (we were joyously celebrating a rare Raiders win) and he mentioned that prices in some areas of Mountain View, Sunnyvale, and Cupertino are pushing $700/sf and continuing to hold. I know Google is employing pretty much everybody up there right now, but this seems insane.
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