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informative

Oil companies are facing a credit crunch as a result of the Pandemic:
https://wolfstreet.com/2020/11/01/what-us-oil-companies-face-the-wtf-collapse-of-consumption-of-gasoline-jet-fuel-from-long-term-weakness/#comment-296712

So as it occurs there will be less oil available than it would have been without the pandemic.

This will form an impetus for change.

Fatcat

While there are many problems with remote work it was possible even 20 years ago. I did some gigs in 2002 communicating mainly by email.

For what really bothers me today is that I don't have a stylus on the corporate vpn and it is a PITA to draw quickly something. It turns out, our team doen't use video often. Just voice and screen sharing.

So the barriers to remote working were mainly due the mindset and attitude. All the office work were the results have to be stored on a computer can be performed remotely (there might be some consideration for secret clearance certification and such) .

Now the pandemic has shown that remoting is a perfectly viable option. For me the biggest negative is that I have gained 20 lbs since it is to easy to skip the planned stroll and the fridge is not far...

Kartik Gada

fatcat,

So the barriers to remote working were mainly due the mindset and attitude.

This is almost always the case. This inertia prevents a critical mass of users going into the new paradigm. It breaks when there is either a disruptive event, or the cost delta becomes just too large.

To be fair, Cisco's telepresence in 2007 was something that still cost $300,000 to install, and $3000/month to run. They invested $6B into creating that market, and got almost nothing out. Now, Zoom is free (even if not of the highest quality). There were many other solutions, but Zoom won the 'winner take all' aspect of technology in this instance.

The same will eventually happen with college degrees. The necessary next step is for employers to say they don't require it.

Fatcat

In 2010 my job has some of those Cisco videoconference rooms . They were nice but didn't bring much more benefits than talking over the phone. And for sure the expensive setups were too expensive to justify. Of you are avoiding it reducing an executive flight that cold be huge savings. But too expensive for the majority of workers. A webcam even 10 years ago was pretty cheap, and is needed when you have to read facial expressions or body language. However, the moment you present something people have to look at the pretension not as at the face. There are some youtubers that take more than half of the screen and write something tiny on a board. In those cases I don't want to see the face.

Of course the workflow has to be adapted and be mobile first. Of you have 5 pertains in a room and somebody dials in and barely hears and doesn't see anything it is a failure.

Same applies for teaching. The lectures can be recorded and only questions and answers have to be real time.
There's a higher expectations recording and presentation quality. It is more effort for the teachers but once a be well done class is recorded it can viewed by millions. And video interactions can be limited only to refinements, be exercises and dialogues.

It is a different approach and mindset. I think that the main stream subjects should have the classes recorded as TV shows, where you invest a lot of effort in one episife5 but it gets amortized over many (millions of?) students .
For now we're are at an amateur level where ready school and professor are trying to setup something different.

Kartik Gada

fatcat,

The lectures can be recorded and only questions and answers have to be real time.

Of course. Particularly when the Q&A can be in message board format, where other students answer the question, on top of the 24/7 nature of such a moderated message board. There is thus no problem of scale where one class has 10,000 students.

Udemy classes, of the duration of a typical college full-semester class, often cost just $10-$12.

Of you are avoiding it reducing an executive flight that cold be huge savings.

This is where the critical mass aspect of Zoom was necessary. The typical corporate executive was flying 200,000 miles/year. At this level, this had to be business class or first class. This was extremely expensive and time-consuming. Every international flight killed two weekends.

Kartik Gada

Here is a chart for just US skyscraper completions, over 150m in height, since 2001 :

http://www.skyscrapercenter.com/compare-data/submit?type%5B%5D=building&base_region=0&base_country=163&base_city=0&base_height_range=3&base_company=All&base_min_year=2001&base_max_year=2022&comp_region=0&comp_country=0&comp_city=0&comp_height_range=4&comp_company=All&comp_min_year=0&comp_max_year=9999&skip_comparison=on&output%5B%5D=timeline&dataSubmit=Show+Results

Geoman

Add one more thought into the experiment - full self driving and integrated vehicular telecommunications. A 75 mile commute is nothing if you can sleep, eat, watch tv or work in complete comfort the whole way.

One fascinating thing is the recent surge in relocations from New York to Philadelphia, where a beautiful home can be bought for a fraction of the price. Once a week commuting has become the norm from there.

My own company has been creating national and international teams to do work for about a decade now. I see my boss in person every year or two. I've managed projects in Canada and Japan. We do it all the time.

This is a critical juncture for cities. They can no longer count on people "putting up" with gross mismanagement. They need to work very hard to be safe, have lots to do, lots of culture. Allowing rioters "space to destroy" is simply not acceptable. Unending lockdowns are also are an issue. People only need to live in the big cities due to amenities. Absent those... I'd like to think that this situation will force better city government.

I also appreciate you nod toward the government getting out of the way and letting buildings reorient toward new markets. If an office building wants to convert to residential, why does the government think it should get a say, other than basic health and safety requirements? And having downtown core with more residents should be something desirable.

Geoman

One last thing to add - I have three kids in college, and I'd say the distance learning has been a mixed bag. Some professors excel at it, and other are simply terrible. Colleges REALLY need to start working with professors on their distance learning management skills. Just simple things like proper camera and sound management, using the screen to present correctly, and posting and updating course instructions.

These are things any business would get fixed immediately, but they are taking universities weeks to notice and correct.

Kartik Gada

Geoman,

full self driving and integrated vehicular telecommunications. A 75 mile commute is nothing if you can sleep, eat, watch tv or work

Yes, but I believe that is not fully mature and mass-adopted until 2032, or 12 more long years to go.

One fascinating thing is the recent surge in relocations from New York to Philadelphia, where a beautiful home can be bought for a fraction of the price.

Philadelphia is not even the nearest point. There are more rural parts of PA that are even nearer to NYC. But Philadelphia to NYC can be done via train. The key is more choice.

They can no longer count on people "putting up" with gross mismanagement.

Ideologically, they are going in the opposite direction. I can think of few ways to destroy a city faster than to 'defund the police'. All criminals from surrounding cities will go to where the police has been defunded. It is merely an ad for open season on marks.

Yet, both Seattle and Portland are going into full-on socialism. AOC was delighted that she deterred Amazon from bringing 40,000 jobs to NYC. Full and total bankruptcy of cities, leading to these entrenched socialists losing their jobs, it the only answer.

One fascinating thing is the recent surge in relocations from New York to Philadelphia, where a beautiful home can be bought for a fraction of the price.

Permitting restrictions are the problem. I completely foresee a San Francisco that still has an extreme housing shortage, while a huge amount of office and retail space is boarded up.

Some professors excel at it, and other are simply terrible.

Different skillsets for the new medium will sort this out. Remember that most professors dislike teaching, and are more concerned with research. They only teach because they are required to do a certain minimum.

If Udemy, Coursera, and others have mature video platforms, then the pressure for usage to migrate away from expensive institutions towards these solutions rises.

Geoman

Ask yourself - If you didn't have to work there, would you still live there?

Every city will face this existential crises. If the answer is "no" the city will die. If the answer is "yes", the city will thrive.

Every city desperately needs to get to "yes".

Kartik Gada

Geoman,

Every city desperately needs to get to "yes".

City government is running full speed in the opposite direction. I can think of few things that can destroy a city's economic core more than 'defund the police' and '$15/hr minimum wage' policies. Recovery could take years, even if such policies were immediately relented from (which isn't happening).

Cities going bankrupt is not a new thing, nor a very big deal. Each socialist should have to work in a real job after bankruptcy.

The question is, what if the biggest state, CA, goes bankrupt? How would that manifest?

Geoman

Not every city is following the same destructive path. Imagine every city realizing they need to be essentially resort destinations. Not really, but they need to *think* in those terms.

Bankruptcy happens slowly, then all at once. Let's see,

1) California finds it's ability to raise additional taxes to be decreasing. Whatever they do, no additional money come is.

2) You start to see negative migration from the state. Preferentially high income earners and retirees.

3) Housing prices start to fall, slowly at first, then precipitously. But starting at the high end.

4) Several major employers begin to bail, or fail to expand.

5) Bonds have a tough time finding buyers, even at competitive interest rates.

6) The state starts to cut costs, but finds too much of their budget is wound up in servicing debt, including pensions.

7) Services decline and keep going down.

One problem with states is they will limp along, financially crippled, for years, maybe decades. Everyone will keep hoping for a federal bailout, which will never come. It CAN'T come. because if you bail out one state, every other state will stick out their hand and say "hey, how about us?"

California and Michigan are in deep trouble, as is New York. But Illinois is the farthest down the hole of any state. I see no possible pathway to recovery unless they radically reduce debt.

I would predict that the path forward would be Federal money, but coupled with specific changes to the Illinois constitution. Likely something that gets rid of fixed benefit pensions, makes everything pay/go, and limits the government take to a certain % of the total state GDP. Maybe something that limits the public initiative process as well. If not enough money is produced via taxes, automatic cuts ensue. And the feds would negotiate a haircut for the bond and pension holders.

One of the best things our city ever did was institute a tax cap. Income to the city can only increase a certain small % each year. Amazing how that has clarified the situation with the city leaders. We also went to a defined contribution plan for city workers. very hard for the city to ever get too far down the debt hole using those two tools, and I think it would work well for states.

Palamas

Geo, much to your chagrin, you'll be amused to know that I grew up in the Land of Lincoln. Now you know for sure that I am what I say I am.

Yes, it is a joke. And what's going to happen? My buddy Chris Cole knows, maybe Kartik knows him too. The Fed is going to attempt to monetize this foolishness. It is, after all, a generational war. How else would idiots vote for a corpse, even halfway, with all the fraud. It's because (just like you treat me) people are not just stupid, they are easily manipulated. And the elites found out how to successfully do this in the 20th century; technology just sealed the deal.

I think we all agree politically. I actually really like you guys, and I know you are intelligent. But on many issues you lack wisdom. I know why this is, actually, but it's irrelevant to posting here.

I made my predictions. War and inflation within 13 years.

It's time to make some real predictions in that time period. I'm waiting. No excuses. No AI bullshit either, it's all crap. Radiologists will be out of a job right? Ha, just like Andrew Yang, Raoul Pal, and all the other "experts" who are really smart guys but like you all, dance in other fields you know nothing about. Reminds me of Lebron James talking about politics. Halo effect - smart people should be aware of it, and be humbled.

But that's why I'm here. You seem to gloss over these obvious things.

Geoman

Palamas - I can't follow what you are saying. Given I'm a reasonably smart guy, that should trouble you.

What "obvious things" are we glossing over?

What do you mean by "AI Bullshit"?

War? War with whom over what? Civil war, war with China, or war with AIs?

Why do you think I lack "wisdom"? You say you know "why" that is true. Ok, why?

The fed will monetize what exactly? You mean technological deflation or something else?

What political leaning do you suppose I have? If someone were to ask me who I vote for, I usually say "competence". Whether that is an R or a D, and I, or even an L doesn't overly concern me. Part of competence is knowing that the tools you have are inadequate for the job, say an electrician trying to do plumbing with a wire cutter.

Kartik Gada

Palamas,

I made my predictions. War and inflation within 13 years.

That is not a prediction. That is very vague and open-ended. Plus, you didn't provide detail about whether there would be QE or not, or what level of money-printing would or would not still exist. Fail.

It's time to make some real predictions in that time period. I'm waiting. No excuses.

This entire website has a ton of predictions by me, and others have made predictions in the comments. It is you who can't make a single one.

Radiologists will be out of a job right?

A CTRL+F of this website does not reveal a single instance of the word 'radiologist' in any main article. So this, too, is an untruth insinuated by you.

AI will certainly increase radiology efficiency, which means lower cost and more frequent testing, leading to more early detections. That does not mean 'radiologists will not have jobs'. Too bad you can't even grasp the difference between the two.

But that's why I'm here.

Not anymore, you're not.

Geoman

I assume Palamas has been banned? Probably for the best. I have enormous patience, but at some point talking in cutesy riddles becomes tiresome.

Back to the topic at hand - I think California has decades of mismanagement ahead of it before bankruptcy. They just aren't far enough down the hole, not for lack of digging. There is a lot of ruin in a state - it takes time to break a money machine that has taken a century to build. It also has a wealth of natural resources, things like good weather, ports and harbors, hydropower, farmland, etc. Things very hard to completely destroy.

And there is cultural inertia. Too much total wealth is tied up in *believing*. A lot like a Ponzi scheme - it only fails when the dream dies with the new suckers.

The process of California failing has been going on for the last 30 years or so, and they have another generation at least till they hit rock bottom. And technological innovation (which California is a leader) will continue fixing the problems California stupidity creates. Can they fix it faster than they break it? Maybe. Normally I'd say no, but..? for example, they have not been investing in infrastructure. But EVs and the boring company may make such investment irrelevant.

And people don't count lost growth - lost potential. They can't visualize it. They won't ever realize that California, a rich state, could easily be twice as wealthy in 20 years - it'll just stay as wealthy as it is now, and rapidly decline respective to other areas. They won't realize what a terrible backslide that is from what could have been.

Kartik Gada

Geoman,

I assume Palamas has been banned? Probably for the best. I have enormous patience, but at some point talking in cutesy riddles becomes tiresome.

Yes. No one has been banned from this blog since 2012, and even that was Imran banning people from his far more controversial articles. The technology-oriented articles have never had someone who needed to be banned before.

_________________________________________


Back to the topic at hand - I think California has decades of mismanagement ahead of it before bankruptcy.

You are probably right. But their craziness seems to be exponential. The state tax rate in CA was not truly excessive until 2012. Up to that point, the top bracket was 9.3%, which is high, but not an outlier relative to other high-tax states. In 2012, they ratcheted it up to 13.3% and now want to go to 16.3%, even as Zoom has accelerated the exodus. Hence, the squeeze from both ends has been increased.

Ironically, a budget bankruptcy might make the private sector of the state (still the envy of the world) do better just from the relief effect.

And people don't count lost growth - lost potential. They can't visualize it.

Yes. And now that the gradient of progress is so steep, underperformance can still mean minimal growth, which keeps people placated.

CA voters are not as crazy as the rest of the country thinks, since Prop 16 was defeated 60:40 despite the proponents outspending the opponents 16:1. The good thing about the Prop system is that it is party-less, so works well within Asian voter cognitive dissonance.


Geoman

For every success of the prop system, there is a dismal failure as well. I used to be a fan of propositions. Then I realized how the system has been hijacked by really terrible people. Now I vote "no" on almost all of them, and the better funded the "yes" campaign, the more likely my "no" vote is.

Prop 16 was a classic example of a terrible idea - they had a proposition to allow more racial discrimination. And they promise, promise, not to abuse it. You can't make up a more insane concept to put on the ballot in 2020.

Kartik Gada

On skyscraper construction, tons of pipeline projects that have not been kicked off yet, or are in the early stages, are being postponed or cancelled.

This is a mistake, since it is an attempt to constrain supply in the face of technological disruption. This has never worked in any other sector.

They should keep building, but focus on fighting for a mix adjustment (more residential in the place of commercial). Let people's apartments be 20% bigger.

Geoman

https://fee.org/articles/new-yorkers-are-abandoning-the-big-apple-in-droves-despite-cheaper-rent-report-shows/

Well worth a read, and very relevant.

I think converting commercial into residential means flexibility in who you rent to - it opens the market to lots of players.

Instead of tele commuting, imagine working from home, but if you have an important meeting, zipping downstairs to a rented meeting room. or having a business center in the building for printing, work supplies...and companies could subsidize your rent, for people working from home, in lieu of providing office space. Most office building could then be a mix of offices and residential, and move back and forth as the market dictates. And just think about how much of the housing shortage that would alleviate.

But it begs the question - why zone skyscrapers at all? Let them rent to anyone they want for any purpose. What is the value of government saying this building is commercial, and this is residential?

Kartik Gada

But it begs the question - why zone skyscrapers at all? Let them rent to anyone they want for any purpose. What is the value of government saying this building is commercial, and this is residential?

In California, this sort of zoning is very strict, mainly to create artificial scarcity of residential property.

To be fair, it is not easy to convert an office building into residential since the piping and bathrooms are all different.

Chinese buyers just force past this, though, starting 'tech accelerators' where their Chinese workers just live on site.

In the 1970s, Chinatown had 7x the population density of the rest of San Francisco, so this format is normal.

Dr. P

Are you really going to not allow my predictions?

-CPI goes over 4% by the end of next year.

-Government backed loans increase in order to create more money and velocity, unlike that attempts with QE which have failed at that

-BTC continues to climb, network effects will push it beyond 50k along with institutions, adoption, excitement, and the impending loss of control governments have over confidence in their fiats

-Pensions also have to go to the Fed well more and more, which will continue the degradation in trust in US treasuries (more confidence game issues).

Is that enough? What are yours?

Kartik Gada

Heh. Palamas changed his IP Address and his handle to get around the ban.


At least he finally made predictions (partly), and that too only after being banned. He had dodged a dozen prior requests to actually make predictions.

The one prediction of sufficient detail he has made is :

-CPI goes over 4% by the end of next year.

This will be wrong, but we will see. A brief single-month blip does not count. It has to be above 4% for an extended period.

This prediction also does not tie to any specific amount of World QE. There is a level of QE at which this CPI increase can happen, but as Palamas did not specify this, this prediction is not sufficient to quantify (let alone disprove) the technological deflation effect.

The other partial prediction he made is :

-BTC continues to climb, network effects will push it beyond 50k along with institutions, adoption, excitement, and the impending loss of control governments have over confidence in their fiats

This one has *some* chance of happening, but as there is no timeframe, it is not a sufficiently specific prediction. I am not a fan of Bitcoin as the various Bitcoin enthusiasts are unable to explain why it is better than a composite of all cryptos, even though it is the most technologically obsolete of all cryptos (its ledger does not even allow smart contracts).

But as there is no timeframe, it does not meet the standard of a prediction. I can say that 'the S&P500 will reach 10,000', but without a year given, that is meaningless. Of course it reaches that someday.

The other two are not predictions by any definition as there is no number or timeframe associated with them.

What are yours?

LOL! As if this entire website doesn't have tons of my predictions, with considerable specificity (unlike yours).

This type of haughty pretense in every comment contributed to Palamas being banned.

We will revisit his ONE real quasi-prediction next year, at which time his ban will be temporarily lifted so he can make a statement.

Dr. P

Kartik,

Why can't I just make the CPI prediction? Ok, at least you are ok with that standing.

As for the BTC prediction, I'm saying $50k by the end of 2021.

The other prediction I had before that you ignored was China starting a war within 12 years, or through 2032. My best guess is it involving Japan or Taiwan (or both) to draw in the USA.

What are your top 3 predictions that are standing for the decade or at most 15 years? We don't be around for the Kurzweil stuff.

Geoman

I hear a faint buzzing sound...Palamas? Is that you dear doctor? nah.

"To be fair, it is not easy to convert an office building into residential since the piping and bathrooms are all different."

BP built a very large building in Alaska, each office with a private bathroom. So when they leave it could be converted to a hotel or apartments.

Kartik Gada

Geoman,

BP built a very large building in Alaska, each office with a private bathroom. So when they leave it could be converted to a hotel or apartments.

But that was already built that way. The problem is that existing skyscrapers in NYC and other big cities are overwhelmingly office space, and cannot be converted easily. The tallest West Coast buildings such as the Salesforce Tower or AON Center aren't remotely fitted for conversion to apartments.

Maybe each floor becomes 2-3 huge loft-style conversions for very wealthy tenants, given the low bathroom ratio. But still.

Chinese tenants might be the only factor that enables normalization.

Geoman

Oh, my point was you COULD build that way, and some buildings have done already it.

Buildings currently under construction might want to add that additional flexibility. During construction of a large building the cost might be a fairly negligible add on, and it reduces the risk that large parts of the building might sit empty for extended periods. I guess I'm saying there are no barrier to why future buildings couldn't be constructed this way.

It would be fascinating to see a major city lift all zoning restrictions on what can go into a major commercial development. Just to see what happens. The retrofit of older buildings might be difficult - but nothing is impossible, and some might be converted easier than others.

Geoman

Palamas,

My prediction is you will get banned from this site for a second time.


{Right! - KG}

Kartik Gada

Palamas,

You can keep changing your handle and your IP address (you are now up to four), but you have been banned. As I said, in a year, we will note if your one, incomplete prediction about the CPI happens. Then, if you return, a comment will be allowed.

But otherwise, no more comments from you will be published. This multiple-IP address trick won't work.

If you are baffled as to why you have been banned, well, look at your past comments, which have been nothing but haughtiness, condescension, and a complete disrespect for knowledge that others contribute (while contributing none yourself). Perhaps some self-awareness is in order.

If you truly believe you are so much smarter than everyone else here, then it makes no sense for you to grant us this unearned privilege. You should find a website more compatible with your vast intellect.

Geoman

Breaks my heart, since I prefer people to grow, change, and improve, but not enough to want him back.

No worries - Perhaps there is a chat bot somewhere he can argue with.

Dr. P

Ok, see you in a year.

Joe Blow

And right on cue:

"These Algorithms Could Bring an End to the World’s Deadliest Killer
In rural India and other places where tuberculosis is rampant, A.I. that scans lung X-rays might eliminate the scourge."

https://www.nytimes.com/2020/11/20/health/tuberculosis-ai-apps.html

Kartik Gada

More data about the exodus from San Francisco :

https://www.sfchronicle.com/business/article/Yes-people-are-leaving-San-Francisco-After-15635160.php

Geoman

The macro trend is for big cites that don't provide a clean, safe, and healthy environment, to die. Some will die slowly, others much faster. One day, people will look around and wonder, how did this city become such a ruin?

I grew up loving S.F. I dreamed of living there someday. I would routinely visit there in the late 1970s, to early 1990s. One of the most beautiful cities in the world. Terrific food. Great history. And just...fun.

Now, if money were no object, would I live there? Nope. For one, I object to overpaying for things to such a disgusting degree. Secondly, I don't want to deal with rampant homelessness, drug abuse, dirty streets, crazy rules, etc. If I can't get out and enjoy the city, what's the point? Do I want to live there, locked up like the prisoner of Zenda? Why would I agree to that? SF is lovely, but so are many cities. Why not chose one that is safe and clean? I can telecommute anywhere. Technology makes that easier every day.

If I live more remote, I can have a large home, and get free power from solar cells on the roof. SpaceX star link promises I can get full internet anywhere. I'll miss the food and culture, but in exchange I get to feel safe, clean, and free. Plus the internet means, well, I get a certain amount of culture anyway. And I'm more safe from things like COVID19.

Jenny

I we spin this Zoom evolution further we will be in fully virtual reality some day. Much like the holodeck I wonder whether people will still be motivated to work. Or we will see holodeck addicts (imagine what a loner would do there).

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