The only problem with this line of thinking is that what was true about Boston and the nearby towns was true 10 years ago before the colossal explosion in prices happened here. Fidelity has been here all along, as has State Street, etc. Why did prices suddenly grow far far faster than incomes? Could it have had something to do with the gigantic amount of cash that was sloshing around the money centers of the world (Boston, New York, London) due to the unprecedented expansion of credit?

And now that all this is beginning to unwind, what effect will it have on a place like Boston, so dependent on the kinds of money that are now evaporating?

I don't know. Boston has arguably been built out for quite some time and yet it went through a real estate bust before. Maybe we'll pull through fine. I don't have any answers.

Oh, for pity's sake.

If Bank of America wanted to relocate its Boston operations to a cheaper locale, it would've shuttered the local offices after it acquired FleetBoston Financial. State Street, Putnam and Fidelity are free to pick up and leave at any point.

What you're missing is that Boston, like other prospering cities, tends to deliver benefits commensurate with its costs. If you're in the businesses of institutional asset management, hedge funds, or mutual funds, there really isn't any better place to be than Boston. Sure, you can relocate some of the back-office work to other states, the way Fidelity is now doing in Rhode Island. But at the end of the day, you want to hire good people. To do that, you need to be around a concentration of other firms, and you need to offer them a good quality of life. And Boston offers those things in abundance. It is our intellectual capital that makes us an intellectual capitol.

It's not a strange immunity. The worst of the lending practices took place in states experiencing rapid development. As people around here never tire of reminding us, Boston has not experienced rapid development of any sort. There was no glut of new construction, left to stand vacant. No massive new developments, built on spec. Take a look at the loan data - almost no state had as low a percentage of subprime lending; and our local financial institutions are in great shape. And it wasn't because we're virtuous; it's because most of our communities were already relatively fully built-out, so there wasn't much affordable housing being generated. Our biggest problem - the highly developed economy that leads to enormously expensive cost of living - turns out to be our salvation in the present crisis.

Look, we're by no means immune. The outlying communities are particularly hard-hit, as are the aging mill-towns that remain concentrations of poverty and despair. But the towns lying close to Boston are going to pull through this real estate bust with relatively little damage. And if you look closely, that shouldn't be surprising.