Show Me the Money

Just heard another one of our group members is defecting to New York. Two major departures in less than three months, both to major derivatives dealer firms in midtown Manhattan. First, Steven to BNP Paribas and now Mike to Credit Suisse First Boston. Times like these that I realize the derivatives world is comprised of a scant three cities: New York, London, and Tokyo. And that the real money and the bulk of opportunities are in New York. Sad to see Mike go. During a group dinner at Moose's in North Beach, his inebriated and comic attempt to speak Russian, apparently the native language of his maternal grandmother, to Katya, a colleague and daughter of a former Russian diplomat, had us in tears. Dosvidanya Mikhail and spasiba.

Get Real

Seattle-based Real Networks appears to be upping the anty in its battle with Apple and its hugely successful iTunes website for paid online music downloading supremacy. Just a week ago, they introduced a promotional "half-price sale", lowering the price per song from 99 cents to 49 cents. And this morning, they announced a pilot program with two universities allowing students to subscribe to the Rhapsody monthly service at a steep discount (link here); students would pay $2 to $3 per month for access to unlimited music downloading. Hmm. But don't they download songs for free already. Yes and no. While peer-to-peer "sharing" is still very common, universities have really cracked down on the practice, usually by limiting the bandwidth of dormitory broadband connections at night. And Real Networks is betting that students would opt to pay the nominal charge for the convenience of not having to hunt for songs via peer sharing networks, the assurance of a quality download, and the legitimacy of having legal ownership of the songs. The two pilot campuses? The University of Minnesota and my alma mater, the University of California, Berkeley. The execs at Real Networks are a crafty bunch. One can't dismiss the audacity of their latter choice. Berkeley is not far from Apple CEO Steve Jobs' "other" office at Pixar Studios in neighboring Emeryville (or from Apple headquarters in Cupertino, for that matter); and Jobs' close friend and Apple co-founder, Steve Wozniack, is a Berkeley alum and continues to have strong ties to the campus. It's getting ugly.

The Big Rivalry in Athens

Both the Berkeley and Stanford athletic departments are tracking the success of their respective Olympians at the Games in Athens (Berkeley link and Stanford link). As of today, Stanford collectively has six medals, all silver, and has yet to garner a gold. This is surprising given the large contingent of Stanfordites in Athens. Comparatively, Berkeley grad Natalie Coughlin alone has already earned two gold, two silver, and a bronze. Bears rule. On the topic of Cal athletics, there was yet another glowing article about the football program, this time in the most recent USA Today (link here). The bit about Jeff Tedford as the Godfather had me rolling. The mention of Heisman and Aaron Rodgers in the same sentence may be taking it too far though... even for us die-hard alums.

Shift to a Buyers Market

Alexis McGee, president of Foreclosures.com, was quoted in today's San Francisco Business Times: "McGee warns that defaults would probably rise again as rising interest rates put pressure on hyper-inflated west coast housing markets. 'We think a long overdue price correction has already begun. Over-leveraged homeowners that have abused home equity lines will find themselves with negative equity. If they get in a bind, they'll just mail their keys to the lender and walk.'" This is what I surmised in my prior weblog Bursting of the Bubble?. I can only hope a meaningful "correction" hits the Peninsula by graduation time. Two of the guys at the semimonthly and unofficial Wells Fargo / Johnson & Johnson poker night were sharing information about prospective homes and real estate agents in Arizona. They both work in regional sales with the option of locating anywhere within a three hour flight range of San Francisco. Apparently, Arizona is a very popular haven for those fed up with the Bay Area housing market; no doubt because a half million actually buys you something down there. How sobering.

Proof Positive

For those of you who are mathematically-inclined, here is a simple proof to show that "0.999... = 1" (link here): (1) Let x = 0.999..., (2) then 10x = 9.999..., (3) now subtract x from both sides, (4) we get 9x = 9, (5) which reduces to x = 1, (6) thus, x = 0.999... = 1. Hmm. Intriguing. Yes, it's been a slow morning.