Location, Location, Location

Yale economist Robert Shiller, whose best-selling work "Irrational Exuberance" called the top of the "bubble" market almost to the day, has a piece in today's Wall Street Journal that looks at the housing market "bubble." Shiller argues that the housing market is largely stable across the country, except in places like New York, Boston, Los Angeles, Silicon Valley, Denver and Seattle. In those areas, Shiller contends, a sharp correction (if not a crash) in home values is possible (and maybe probable).

At dinner last night, Reed Hastings, the chief executive officer of Netflix, said that the real estate correction in Silicon Valley (particularly on the commercial side) is gathering steam. "We pay $5 a foot right now (for Netflix warehouse space)," said Hastings. "When the contract expires, the price will probably be $2 a foot."

Ch-Ch-Ch-Changes

Given the press of other business, I've decided to remodel this blog along the lines of Just One Thing, which is published by another Fast Company contributing editor, Dan Pink. The self-evident idea is to post one item every day, usually a link with some commentary attached. And that's what I'm going to do, beginning tomorrow.

Gore Gone

I was amazed when I flipped on my homepage and read the news. Gore seemed to me a lock to win the Democratic presidential nomination in 2004, which left him with a less than 50-50 but better than 46-54 chance to win the general election. Yes, Democratic insiders and their soulmates in the media were down on Gore, but so what? In places like New Hampshire and South Carolina, such enemies are assets.

With Gore gone, two front-runners emerge: Rep. Richard Gephardt and Senator Joe Lieberman. Gephardt will have the full-throated backing of Labor, Lieberman has national name recognition (and a good network of support) from the 2000 campaign. One problem for Lieberman is that the calendar sets up badly for him. He's a Connecticut Senator in Iowa with no labor support. He's probably blocked out in New Hamshire by Massachusetts Sen. John Kerry. And South Carolina is not Lieberman country. Let's just say.

One thing to remember is that the 2004 primary season will be exceptionally short. The whole thing begins and ends inside of 8 weeks. Once the winnowing process (Iowa and New Hampshire) weeds out the Howard Deans and General Clarks, South Carolina will be the state where the race goes from 3 candidates to a two-man race (the TV networks can only afford to cover two candidates once the Super Tuesdays begin).

Had he run, Gore would have been one of the two, post-South Carolina. Now it appears that Gephardt will be one of the two, post-South Carolina. Given the make-up of caucus attenders/primary voters in Iowa and New Hampshire, the opening (post-Gore) is on the left, not the right. Which is good news for Senator John Kerry. Which is good news for George W. Bush.

Well Said

The President sharply rebuked Senator Trent Lott today. It's a speech worth reading, which you can do by clicking here.

A Great Letter

Following is a copy of a letter written by Michael Thomas to The New York Times regarding the latest outrage from Bear Stearns:


The Editor
The New York Times
229 West 43rd St.
New York, NY 10036


Sir:

While I defer to no one in my enthusiasm for tradition, it is disturbing to see the firm of Bear Stearns & Co. acting so in character by demanding, under the threat of relocating 1000+ jobs from the city to New Jersey, a $40 million subsidy at a time when New York is in financial crisis.

As this firm’s action makes perfectly clear, the only thing Wall Street understands, or values, is money. QED: the only way to deal with blackmail is with a healthy return dose of the same.

Bear Stearns, and any other firm undertaking this ploy (and you can be sure, if one gets away with it, others will follow,) should be put on notice that that such a course of action will be grounds for a permanent or term disqualification from doing business with the city and the state. No pension fund business, no advisory business, no state and city agency underwriting or brokering, no commission business, no clearing business on city/state-related accounts – and so on. The nimble minds at Bear Stearns are capable of weighing the discounted present value of the loss of city and state business for, say, 10 years against the $40 million “or else” subsidy the firm is seeking.

Ancillary measures might also be considered. A single traffic officer stationed outside Bear Stearns’ fancy East Side headquarters with the sole mission of ticketing limousines for moving and standing violations could represent a potential for single employee-productivity that will have our Mayor’s eyes spinning with delight! A word might also be had with Bear Stearns’ banks of fiduciary account and clearance.

This city is in a state of emergency. I grew up during a comparable if less physically immediate crisis, namely World War II, when about the worst crime, patriotically and every other which way, was what was called “war profiteering.” This is what Bear Stearns is up to. They should not be allowed to get away with it, not as long as the city and state have the means to squeeze back: hard.

With every best wish,



Michael M. Thomas


UPDATE: A reader emails with the following: "FYI: In case you didn't know, the NYT company made a similar demand from City Hall and got financial incentives to keep its headquarters in NYC and not move them to NJ a few years ago. "

The Values of The New York Times

It's not often that they are so perfectly captured. Click here.

Hooah

If someone in the military responds to something you said or wrote by saying "Hooah," what does he or she mean, exactly? This question, which I know has been vexing you for years, has now been answered authoritatively. And the answer is: here.

Two Good Columns

Tom Friedman and William Safire both wrote excellent columns this week. You can read Safire's wise and well-reported view of Billy Bulger's choice by clicking here. You can read Friedman's take on what he calls the most important political trial in the world by clicking here.

http://www.nytimes.com/2002/12/04/opinion/04FRIE.html

Good News on Wi-Fi

The solution to the "last mile" issue of telecommunications may well be wireless fidelity, known in techie circles as "Wi-Fi," which enables high speed access without cables or 3G networks. The problem with Wi-Fi has been that it's sort of like ham radio; a hobbyist's deal. No longer. Yesterday, IBM, AT&T and Intel announced that they had formed a company to build out a national network of Wi-Fi "hot spots." The announcement was simply great news.

Truth and Leadership

Read this story and ask yourself this question: What will it take for Cardinal Law to do the honorable thing and step down? What further revelations are necessary?