- Commercial real-estate's looming collapse: Highly leveraged REITs and extinction-level events don't mix.
- Test-proctoring software worsens systemic bias: Also pedagogically bankrupt and run by corrupt, petty shitheads.
- This day in history: 2019
- Colophon: Recent publications, upcoming appearances, current writing projects, current reading
Commercial real-estate's looming collapse (permalink)
Commercial real estate is in biiiig trouble. Malls – already under threat before the plague – will be full of empty storefronts. Offices, oy. They'll lose tenants when their businesses collapse. Surviving tenants will take advantage of higher vacancies to negotiate lower rates.
Those tenants won't need as much space anyway: between layoffs and mass, permanent work-from-home (which will let employers seek the cheapest labor, anywhere in the world), demand is gonna fall off a cliff.
That's really really bad news, because commercial real-estate is super leveraged thanks to Real Estate Investment Trusts (REITs), the favored vehicle of overseas money-launderers seeking to clean their corrupt gains, as CZ Edwards explained last year.
The REITs borrowed titanic sums on grossly overinflated valuations based on absurdly optimistic occupancy projections. As Randall Head explains in a post on Dave Farber's Interesting People list, this leaves their creditors – the banks – vastly exposed.
Here's the bottom line: "A middling-sized bank which in Jan had twenty billion dollars of commercial loans, secured by liens against $25B of office towers and shopping malls now has twenty billion dollars of commercial loans secured by liens against $18B of real property."
That $25b valuation was based on the assumption of 80% occupancy. After the Comet Covid's extinction-level event (exacerbated by gross mishandling, from epidemiological ineptitude to deficitphobic austerity), $18b is generous.
Banks that loaned to plutes cleaning money for crooks? Dead. They'll need bailouts, nationalization, or wreaths.
Head: "If you thought it was fun bailing out the FSLIC, you're gonna LOVE bailing out the FDIC, especially when every other economy is bailing out its banks."
Test-proctoring software worsens systemic bias (permalink)
On the one hand, high-stakes testing is pedagogically bankrupt, but on the other hand, it sure produces numbers that universities can focus on increasing, and then trumpet when those numbers are higher than they used to be. I guess that's important?
The problems with high-stakes testing were magnified by lockdown, with universities demanding that students infect their computers – often shared with family members – with spyware that claimed to perform "invigilation" (anti-cheating surveillance).
Having decided that invigilation software was easier than finding a way to evaluate students without useless high-stakes tests, universites began a campaign of cruel bullying to crush student opposition.
At Wilfrid Laurier in Ontario, computer science students were required to purchase webcams that were not available to sale, on pain of flunking.
And when students around the world complained about the problems with invigilation tools, the CEOs of these massively profitable ed-tech profiteers did what any responsible exec would do: they doxxed their underaged critics.
Writing in MIT Tech Review, Shea Swauger describes the disproportionate impact that invigilation software has on marginalized students, especially Black and trans students and students who are parenting young kids from home.
For starters, the facial recognition software has the well-understood algorithmic racial bias thanks to deficits in training data.
That means that when Black students sit their exams, the tools demand that they increase the lighting to aid in facial verification, and often reject them outright, so they can't sit the exam at all.
Similar problems occur for trans students who are transitioning, whose faces are no longer recognizable by the facial recognition system.
Meanwhile, the systems' unblinking eyes are incapable of distinguishing between students who are cheating by having a confederate in the room and students with young kids being interrupted as they sit their exams.
Likewise, they can't tell the difference between someone who gets up to cheat and someone who gets up because they have a medical condition that requires them to take frequent toilet breaks.
Creepily, the tools require students to pan the camera around their living spaces for "room checks," and then let their profs download and view these images of intimate living quarters, including any family members who have nowhere else to go.
These are important considerations, and there's an equally important principle lurking behind the surface, which is that the problem isn't merely that the algorithm is racist or that the tool discriminates against marginalized students.
The fact that facial recognition struggles with Black faces is the result of a training data deficit, which can be easily fixed, by feeding the algorithm LOTS of Black faces to chew through.
That's what Chinese quasi-state surveillance companies did, using Zimbabwe's driver's license database to perfect its ability to recognize Black faces.
That means that China – and repressive regimes elsewhere that buy Chinese surveillance tools – can spy on Black people really accurately.
This is not an improvement.
And as to high-stakes testing: it's a fool's errand, completely uncoupled from real-world knowledge work and any pretense of rigorous pedagogical assessment.
Even if we found a way to do high-stakes testing without victimizing Black, trans, poor, and parenting students, it would still be garbage.
This day in history (permalink)
#1yrago Facebook has filed a laughable patent-application for the well-known practice of "shadow banning" http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2;=HITOFF&d;=PALL&p;=1&u;=%2Fnetahtml%2FPTO%2Fsrchnum.htm&r;=1&f;=G&l;=50&s1;=10,356,024.PN.&OS;=PN/10,356,024&RS;=PN/10,356,024
#1yrago The NRA spent $70,000 on a consultant to help Wayne LaPierre choose which mansion to purchase https://www.propublica.org/article/documents-show-nra-money-helped-chief-wayne-lapierre-search-personal-mansion
#1yrago RIP, Linux Journal https://www.linuxjournal.com/content/linux-journal-ceases-publication-awkward-goodbye
#1yrago Billions on the line as Facebook loses appeal over violating Illinois facial recognition law https://www.theverge.com/2019/8/8/20792326/facebook-facial-recognition-appeals-decision-damages-payment-court
Today's top sources: Naked Capitalism (https://www.nakedcapitalism.com/).
- My next novel, "The Lost Cause," a post-GND novel about truth and reconciliation. Friday's progress: 517 words (41820 total).
Currently reading: The Deficit Myth, Stephanie Kelton
Someone Comes to Town, Someone Leaves Town (part 12), https://craphound.com/podcast/2020/08/03/someone-comes-to-town-someone-leaves-town-part-12/
- Virtual event with Christopher Brown for his novel "Failed State," Aug 12, https://www.bookpeople.com/event/virtual-event-christopher-brown-failed-state
Induction into the CSFFA Hall of Fame, Aug 15, https://www.whenwordscollide.org/canvention.php
- "Little Brother/Homeland": A reissue omnibus edition with a new introduction by Edward Snowden: https://us.macmillan.com/books/9781250774583; personalized/signed copies here: https://www.darkdel.com/store/p1750/July%3A__Little_Brother_%26_Homeland.html
"Poesy the Monster Slayer" a picture book about monsters, bedtime, gender, and kicking ass. Order here: https://us.macmillan.com/books/9781626723627. Get a personalized, signed copy here: https://www.darkdel.com/store/p1562/_Poesy_the_Monster_Slayer.html.
- "Attack Surface": The third Little Brother book, Oct 20, 2020. https://us.macmillan.com/books/9781250757531
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When life gives you SARS, you make sarsaparilla -Joey "Accordion Guy" DeVilla