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Thread: Physical manifestation of our "new economy"

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    God/dess Deogol's Avatar
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    Default Physical manifestation of our "new economy"

    Decline of Silicon Valley as more of the computer industry moves over seas:



    Kind of reminds you of the manufacturing plants no?


    The last time I was in the valley there were at least three for sale or for lease signs on every block. Anyone know if it is getting better out there?

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    God/dess Casual Observer's Avatar
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    Default Re: Physical manifestation of our "new economy"

    Eh...their Santa Clara headquarters aren't exactly low-rent, dude.

    Sun's problem is what it's always been--the only thing they ever had to offer was Solaris (their processors were never that good next to HP).
    Idealism is fine, but as it approaches reality, the costs become prohibitive.

    William F. Buckley, Jr.

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    Banned Melonie's Avatar
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    Default Re: Physical manifestation of our "new economy"

    I hope that there aren't too many zero equity mortgages / ARMS in Silicon Valley ... NOT



    (snip)"Up north, in the Silicon Valley-San Francisco Bay Area area, the price drop likelihood is as much as five times higher -- 20.4 percent to 39.5 percent (for the San Jose/Silicon Valley area, the highest in the nation), according to the latest PMI Risk Index, tabulated by PMI Mortgage Insurance Co.

    The projected declines are alarming, but they shouldn't create any problems for those seeking loans to buy homes in the Silicon Valley area.

    "Basically, that is a 1 in 2.5 chance (of price declines in San Jose). It doesn't predict the magnitude of any decline. Given the strength of the local real estate market in the recent past and foreseeable future, I would anticipate the PMI companies continuing their writing of policies on high LTV (loan-to-value loans," said Mike Donohoe, president of the Santa Clara County Association of Realtors.

    "In fact, the market for 100 percent financing here in San Jose remains strong and I haven't seen any evidence of lenders tightening their underwriting in anticipation of a decline," said Donohoe, also broker owner of Silver Creek Financial in San Jose.

    Nevertheless, it's not surprising that the U.S. Census says for the first time since it began tracking the state, more people are leaving California than are moving in from other states. From 1995 to 2000, California lost a net 755,000 residents, many of them in recent years from Northern cities. That's due in part, to the state harboring some of the highest housing costs in the nation and, more recently, because of the shrinking number of jobs in the north.

    Silicon Valley lost jobs at a pace that outstripped any other metropolitan region in the nation from July 2002 to July 2003, according to the Bureau of Labor Statistics of the U.S. Department of Labor. Santa Clara County/Silicon Valley lost 43,300 jobs during the period. Only New York City lost a greater number of jobs -- 50,100 -- but Silicon Valley lost the largest share of jobs, 4.8 percent."(snip)


    I would also interject that those leaving California were primarily 'middle class' taxpayers, and those moving into California to take their place tend to use more gov't services than they pay for in state taxes !

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    God/dess Deogol's Avatar
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    Default Re: Physical manifestation of our "new economy"

    ^^^

    Yep!

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    Default Re: Physical manifestation of our "new economy"

    Interesting site.

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    God/dess Deogol's Avatar
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    Default Re: Physical manifestation of our "new economy"

    Quote Originally Posted by Casual Observer
    Eh...their Santa Clara headquarters aren't exactly low-rent, dude.

    Sun's problem is what it's always been--the only thing they ever had to offer was Solaris (their processors were never that good next to HP).
    Yep - but their Indian centers are a lot less expensive.

    Just google "sun microsystems layoff"

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    God/dess Deogol's Avatar
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    Default Re: Physical manifestation of our "new economy"

    Quote Originally Posted by lunchbox
    Interesting site.

    Yea, it's pretty cool.

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    Featured Member lunchbox's Avatar
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    Default Re: Physical manifestation of our "new economy"

    Quote Originally Posted by Casual Observer
    Sun's problem is what it's always been--the only thing they ever had to offer was Solaris (their processors were never that good next to HP).
    True, but dollar for dollar Sun ruled the data center.

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    God/dess FBR's Avatar
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    Default Re: Physical manifestation of our "new economy"

    I have to squint to see the pictures but maybe those with better vision than me can confirm quite a few imported cars sitting in the parking lot in the first picture. What goes around comes around, I guess.

    FBR
    Once again I have embraced my addiction and have put off the moral dilemma to another day.

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    Default Re: Physical manifestation of our "new economy"

    ^^^ while your comment about former Sun employees spending lots of money on imported luxury goods (and thus removing a good share of their US dollars from the US economy) is a valid one, I would argue that the following were much larger factors ...

    virtually every Sun employee was paying 25% fed tax + 8% Cal state tax + 7% SSI/medicare tax + 7% sales tax + thousands in property tax + 40 cents/gal gasoline tax ... such that they demanded and got a paycheck from Sun that could cover such a tax burden and still provide for an 'upper middle class' lifestyle

    Sun itself was paying 7% SSI/medicare tax + tens of thousands in workmen's comp + unemployment + health/life insurance per employee per year, paying hundreds of thousands in property tax, paying steep commercial/industrial utility bills (to subsidize underbilled residential customers), corporate taxes etc. on top of very high employee salaries.

    The only way that Sun could prosper under these conditions is if/when they were the 'only game in town' in regard to their hardware / software market niche ... thus allowing them to dictate a market price for their products that could cover their US 'mandated cost' structure with a profit margin ... which held true for a while. However, as soon as any sort of serious competition was able to get organized and offer any sort of credible competing product, the US / Silicon Valley 'mandated cost' structure doomed Sun's California operations to economic oblivion.

    This effectively left them two choices ... continue in business but change their cost structure such that their 'mandated costs' were closer to those of their competition (essentially meaning moving their software development and hardware manufacturing operations overseas, while leaving upper management and R&D and customer service in the USA), or selling off their 'intellectual property' to the competition and ceasing operations (with upper management pocketing the proceeds of the selloff and leaving US employees with a pink slip). Either way, the vast majority of 'high cost upper middle class' US employee jobs were doomed the minute that serious competition came onto the scene.

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    Default Re: Physical manifestation of our "new economy"

    True, but dollar for dollar Sun ruled the data center.
    Hehe...because they were cheaper than HP or IBM, mostly.

    They certainly aren't ruling the back offices anymore, not that their product was of poor quality, mind you, but they refused to get serious about their processors or take M$'s threat of invading the server space seriously (understandable given M$'s position with NT Server ten years ago...now they make $4 billion on server software annually) and they're reaping the whirlwind.
    Idealism is fine, but as it approaches reality, the costs become prohibitive.

    William F. Buckley, Jr.

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    Default Re: Physical manifestation of our "new economy"

    I used the past tense of rule for a reason.

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