WSJ: Optimism fades in Silicon Valley

The latest of several recent stories in the media about the impact of the economic downturn on Silicon Valley.

The venture capital field has “had its hat handed to it” after the boom years, says Bill Burnham, a partner at Mobius Capital in Mountain View, Calif. Even so, he notes, the atmosphere is strangely calm, in part because of the still-exuberant real-estate market, which remains heated and is behaving like it was the year 2000 despite the Nasdaq’s slide. “It’s like reading in the paper that there was a 7.0 [Richter scale] earthquake and walking outside and seeing everything normal,” Mr. Burnham says.

But he acknowledges that unbridled faith in high housing prices is specious at best. “When the housing market cracks in Silicon Valley, then the spirit will finally be broken,” he says. “That’s the one belief that’s left.”

John Markoff and Matt Richtel write about “Silcon Valley without the Trimmings” in this morning’s New York Times.

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