Up, up, and away

With the opening of the Salesforce Tower looming in the next few weeks, there's a flurry of media attention.

Here are two very interesting articles, with lots of links to chase:

• Transbay Transformed

  As the blocks around the transit center fill up with towers, San Francisco is getting a crash course in what high-density urban living is all about.

• San Francisco’s Skyline, Now Inescapably Transformed by Tech

  While few were looking, tech ate San Francisco, a development encouraged by Mayor Ed Lee, who unexpectedly died this month. There are now 79,129 high-tech jobs in the city, about triple the number a decade ago, according to a new research report from the real estate firm CBRE.

  If you work in an office in the city, there is a 28 percent chance you work in tech. That level is exceeded only by Seattle, where the sharp growth of Amazon pushed the percentage of tech workers up to 38 percent, and by Silicon Valley itself, where it is 42 percent.

  “San Francisco has gone from being driven by multitudes of industries in 2007 to being now focused largely on tech,” said Colin Yasukochi, a CBRE analyst. “The growth feeds on itself. Tech workers are attracted to the great opportunities in the city, and the supply of workers means more tech companies come here.”

And no, I'm not moving into the new building.

And yes, it really does look like all the new office floors will be the dreadfully mistaken awfully horrible open seating arrangement.

Sigh.

Private Equity 401

Happily, I'm mostly out from under the thumb of Private Equity, at least for the time being.

But it's still quite interesting to me, to learn how it operates, and what influences it has on the world.

For example, why do shopping center owners set their rental rates at a level which leaves the shopping center 30%-50% empty? How can that make sense?

It's obviously quite interesting to others, as well:

• Retail’s Woes? Much More Than Online

  Private-equity funds have become involved in retail as developers and landlords. In an era of low interest rates, a business model predicated on higher, steady returns is an attractive use of capital.

  However, what works on a spreadsheet for distressed businesses doesn’t always translate into the commercial real estate space. Storefront businesses are limited to the rent they can afford based on the revenue they generate. Lease renewals with increases of as much as 100 percent from new private equity-funded landlords do not work. If the rent increase can’t be supported by the retailer’s revenues, they fold the tent up.

  It is too easy to blame retail’s woes on Amazon.com Inc. and other online merchants. The broader picture has to take in the enormous changes in how consumers behave. Retail has been very slow to adapt to this. The sooner the industry figures this out, the better.

• Putting on Developers’ Hard Hats, Private Equity Managers Break Risky New Ground

  Private-equity firms’ inexperience in construction and short investment horizons make them unnatural collaborators for contractors, he explained.

  In particular, Callahan said, private funds can run into trouble in negotiating the financial relationships that undergird large-scale construction. “A lot of the contracting world relies on surety credit, and the surety market space has been very suspicious of the private equity investor because [surety firms] build their relationships for the long term. The private-equity model is three to five years. That gives everyone a little cause for concern.”

  Pfeffer, the construction lawyer, also singled out financial arrangements with contractors as a source of risk for private equity.

  “Standard-form construction agreements benefit contractors and design professionals,” Pfeffer said. Typical contracts protect contractors against, for example, accountability for construction delays that could cost the developer tenants. “If there’s a waiver of construction damages on the agreement, the owner is out of luck collecting that big bucket of damages.”

• Real Estate Private Equity: Technology’s Next Victims? (Part 1)

  First and foremost, funds don’t have a strong incentive to invest in new capabilities and tools since things are not going too badly. In the short term, the glut of capital might even seem good: New money flows into the hands of the most established players and, for some, it feels like times have never been better.

  Second, funds do not respond because, strictly speaking, they aren’t allowed to. As you remember, private equity funds usually have a narrow mandate to invest in assets under a specific strategy and in a specific geographical area. What about investing in technology or acquiring new capabilities and expertise? That’s not part of the mandate. Keep in mind that the assets most funds currently manage were acquired 1–5 years ago with money that was raised from investors 2–7 years ago.

• Axios Pro Rata, Thu, Dec 21, 2017

  Private equity executives are largely pleased with the tax bill, but there are growing grumbles about how the change to interest deductibility isn't grandfathered in for existing loans.

  • This could be a particularly acute problem for highly-leveraged companies that are either unprofitable or barely profitable. In those cases, private equity sponsors may have to choose between pumping in new cash and crossing their fingers.
  • Going forward, expect leverage levels to decrease. Per one buyout big: "We use leverage as a tax shield, which is about to become much less relevant."
  • There is likely to be a decline in dividend recaps, at least in the short-term.
  • To be clear, private equity firms are still cheering these changes (at least from a portfolio perspective).
  • The longer-term hold period to qualify for carried interest is unlikely to prevent firms from selling before three years, in the rare cases when applicable. Just expect the funds to essentially defer the carry.

Viewed from their perspective, they are doing what makes sense: making a profit as effectively as they can.

But reread this quote, and think about it:

funds don’t have a strong incentive to invest in new capabilities and tools since things are not going too badly. In the short term, the glut of capital might even seem good: New money flows into the hands of the most established players and, for some, it feels like times have never been better.

This is not a good way for a society to organize its productive resources, even if "for some, it feels like times have never been better."

And the tax reforms passed this month did almost nothing to change the deep systemic incentives in the American tax code which encourage exactly this sort of destructive activity.

Sigh.

Stuff I'm reading, holiday 2017 edition

This was a busy year, and I didn't get to blog as much.

Sorry about that.

• Just watch this

  It’s a good, no, great talk about principles of leadership by Bryan Cantrill. At turns hilarious, angry, and poignant, it is quite simply one of the best talks I have ever seen about what we’re building in tech and why and how to do better. We need to move forward, take responsibility and begin to tear down a culture in which "always be hustlin'" is a leadership principle. A frank, harsh look at Amazon, Uber, and techbro thinking, with some eulogy to Sun baked in. It’s a great talk. Please watch it.

• Google Maps's Moat

  But "buildings" is the wrong word to describe what Google’s been adding; it’s more like "structures". Because not only has Google been adding houses, it’s been adding garages and tool sheds

• We Are Running Out of Time to Make Algorithms Fair

  It’s tempting to presume that technology changes more quickly than society and that software can reinforce social progress by rapidly encoding new norms and insulating them from regressive or malicious actors. A sentencing algorithm can do less harm than a blatantly bigoted judge. But it can also obscure the history and context of bias and hinder, or even preclude, progress. Infrastructure is sticky and the window of opportunity is narrowing: Technology can improve in the future, but we’re making decisions about what tradeoffs to make now. It’s not clear how often, or even whether, we’ll get the opportunity to revisit those tradeoffs.

• Dozens of Companies Are Using Facebook to Exclude Older Workers From Job Ads

  The ability of advertisers to deliver their message to the precise audience most likely to respond is the cornerstone of Facebook’s business model. But using the system to expose job opportunities only to certain age groups has raised concerns about fairness to older workers.

• The 2017 Stratechery Year in Review

  the most popular and most important posts of the year: tech and society figure prominently.

• https://randomascii.wordpress.com/2017/12/10/analyzing-a-confusing-crash/

  It turns out that a common trick when displaying an x86/x64 call stack is to subtract one from return addresses before looking them up in the symbol tables. The return address is the instruction after the function call which could be from an arbitrarily different line of code (thanks to optimizers), but subtracting one from the return address gets an address that is guaranteed to be inside the call instruction, and therefore will let the debugger show the line number of the call instead of the return. This is such a clever and seamless trick that we normally don’t even notice it is happening - until it fails.

• Secret Link Uncovered Between Pure Math and Physics

  Over the past decade Kim has described a very new way of looking for patterns in the seemingly patternless world of rational numbers. He’s described this method in papers and conference talks and passed it along to students who now carry on the work themselves. Yet he has always held something back. He has a vision that animates his ideas, one based not in the pure world of numbers, but in concepts borrowed from physics. To Kim, rational solutions are somehow like the trajectory of light.

• When You Can’t Afford Not to Have Power Redundancy

  It seems sensible for the operators of the biggest airport in the world and the airlines that fly through that facility to collectively pay $21M for 10 years of protection and have power redundancy. Considering this from a regulatory perspective and looking at the value of keeping the largest of the nation’s airports operating, a good argument can be made that it shouldn’t be possible for a single power event to take out such a facility and it should be a requirement to have reasonable redundancy through all the infrastructure of any airport of medium or larger size.

• Only Verify State-Changing Method Calls

  Instead of verifying that they are called, use non-state-changing methods to simulate different conditions in tests

• Motel Living and Slowly Dying

  The particular rhythms of what I do - track the pig in its journey beneath the prairies, hand off the job to my counterpart on the other shift, find a hotel near where I’ll rejoin the line, sleep, lather, rinse, repeat - have made me something of an unintentional expert on hotel living and on the America nobody dreams about seeing on vacation.

  I travel by secondary and tertiary roads, skulking around the pipeline on 12-hour shifts, either midnight to noon or noon to midnight. I work alone, mostly. And when the shift is done, I catch my rest in places like Harrisonville, Missouri, and Iola, Kansas. Lapeer, Michigan, and Amherst, New York. Toledo, Ohio, and Thief River Falls, Minnesota.

• How AlphaZero Wins

  To evaluate a position, it simply plays hundreds of random games from that position. To you or me this may seem like a crazy idea, but actually it makes a certain amount of sense. In some positions there may be only one "correct" way for White to win - but often in these positions Black is visibly in trouble anyway. If you give the position to two grandmasters, they might play the correct line and White would win. If you give it to two 2200 players, they may play almost correctly and White will still win. If you give the position to two 1400 players, they will make mistakes right and left - but White will still win. So the point is that even incorrect play will still give you a sense of who is winning, as long as the mistakes are equally distributed on both sides.

• Truth From Zero?

  The Dec. 5 paper is sketchy and only 10 of the 100 games against Stockfish have been released, all hand-picked wins. I share some general scientific caveats voiced by AI researcher and chess master Jose Camacho-Collados. I agree that two moves by AlphaZero (21. Bg5!! and 30.Bxg6!! followed by 32.f5!! as featured here) were ethereal. There are, however, several other possible ways to tell how close AlphaZero comes to perfection.

• From Automata to Zelda, These Are the Best Games of 2017

  2017 was an incredible year for videogames-a mixed bag of genre, style, and mood. The best titles ranged from sweeping adventures to tense shooters to meditations on the existential burden of life. Some of the games released this year will go on to be lauded as the most important, profound videogames of this generation. If you don't know how to dive into videogames in the coming days, here is where to start.

• The Best Games You Might Have Missed in 2017

  More than 400 videogames were released this year. Four. Hundred. With a firehose like that, it's all too easy to miss some of the gems that become available, so we pored through our played list to pull together our favorite under-the-radar titles.

• 16 Best Gifts for Gamers, According to Gamers

  For our latest installment, we found ten gamers to tell us what they want for the holidays, from wireless earbuds to vintage-ish Tamagotchis.

• Table-top generals

  A board-game café sounds like the sort of niche business that appeals only to hip millennials with a fondness for ironic nostalgia. But, on a Friday afternoon, the crowd is more diverse than that, with families and 50-somethings alongside the youngsters. Draughts is doing so well that its owners are now pondering opening another branch. It is just one beneficiary of a new golden age in board games.

• The Best Jazz Albums of 2017

  Even as the world goes up in smoke, artists still make art, and this very much includes jazz musicians, whose best work this year (at least the best that I managed to hear amid the noise) plumbed old and new, tradition and innovation, structure and freedom, with - under the circumstances - heroic strivings.

• Chicago's underground city that’s becoming a design star

  Mazing for five miles under 40 blocks of The Loop (Chicago’s business district), this network of tunnels connects some of the city’s most famous buildings, including Macy’s, City Hall and the Chicago Cultural Center.

  Construction began in 1951 to provide safe, weatherproof passage between the buildings, and the hotchpotch of corridors has been built piecemeal ever since. Each section is independently owned and maintained by the corresponding building above, so each section has different lights, even different air temperatures.

• The Most 2017 Photos Ever

  Not necessarily the top photos of the year, nor the most heart-wrenching or emotional images, but a collection of photographs that are just so 2017.

Yes

Yes.

Yes, yes, yes.

And particularly yes to:

The consequences of these trends weren’t clear to most for a long time. It was just new, and exciting, and oh-my-god-look-at-that-kitty!!! The distraction worked until it didn’t. More and more people are waking up to a world driven by Silicon Valley software companies and thinking: is this really better?

Sure, it’s better in some ways. And those ways have gotten the lion’s share of the press and focus over the past decade. But in all the many, many ways it is not, well, we’re just starting to look at that critically as a society. It’s beyond overdue.

Thank you, DHH (not the first time I've thought that, and undoubtedly won't be the last).

Drawing the line

There are now, according to local news reports, nearly 1,500 fire engines deployed in the Santa Barbara/Montecito area.

Drawing the line, trying to send the raging Thomas Fire away. Somewhere else. Somewhere, not here.

The power is apparently out, from Ventura, nearly up to Lompoc.

So news reports tonight will probably be scarce.

The wind this weekend, here, nearly 400 miles away, was astonishing. Trees blew down everywhere, you could barely stand at times.

I'm sure in Santa Barbara County it was far, far worse.

From what I understand, schools are canceled, even hundreds of miles away, and everyone is just staying in their homes, trying to avoid the smoke and ash.

Everyone, that is, except those brave souls in those 1,500 fire engines.

Drawing the line.

Yes

Yes, yes, yes, yes, yes, yes.

YES.

Yes, yes, yes.

And, at the very end, the very last line, most definitely: yes.

The Likeness: a very short review

The Likeness is the second in Tana French's Dublin Murder Squad series of mystery novels.

Although The Likeness is not quite as great as French's thoroughly superb first book, it is still quite good indeed, and I devoured it apace.

The characters are fascinating; the scenario is very intriguing; the pacing and reveal is just right.

But perhaps most importantly, French's wonderfully lyrical touch again does not fail her.

Here we are, mid-story, just as our hero is learning something new about a crucial character:

The garden dumbstruck, in the fading gold light. The birds hushed, the branches caught in midsway; the house, a great silence poised over us, listening. I had stopped breathing. Lexie blew down the grass like a silver shower of wind, she rocked in the hawthorn trees and balanced light as a leaf on the wall beside me, she slipped along my shoulder and blazed down my back like fox fire.

I love the way this passage depicts how "time stops" sometimes, when you suddenly realize something new.

I love the way this passage depicts the way that evidence can have a voice of its own, making inanimate artifacts come to life.

I love the way this passage evokes the spirit of a departed human soul, simultaneously here and not here.

And I love the beautiful way she makes us feel our own spine tingle.

There's plenty of good solid policework, of course. And plenty of action, and plenty of evidence, and plenty of mystery.

But there's a wonderful amount of this, too:

I listened to the static echoing in my ear and thought of those herds of horses you get in the vast wild spaces of America and Australia, the ones running free, fighting off bobcats or dingoes and living lean on what they find, gold and tangled in the fierce sun. My friend Alan from when I was a kid, he worked on a ranch in Wyoming one summer, on a J1 visa. He watched guys breaking those horses. He told me that every now and then there was one that couldn't be broken, one wild to the bone. Those horses fought the bridle and the fence till they were ripped up and streaming blood, till they smashed their legs or their necks to splinters, till they died of fighting to run.

Of course, she isn't really talking about horses at all.

I can't wait to read more of her books.

A winter adventure in Zion

It was time to go, so we got up and went. We packed our bags, with as much warm clothing as we could reasonably carry, flew to Las Vegas, picked up a nice new rental car (what a nice car the new Toyota Camry is!), and drove northeast on interstate 15.

About 45 minutes out of Vegas, we took a back road recommended by my wife's colleague, which took us about 15 miles off the freeway, into a Nevada State Park named Valley of Fire. After a short stop at the Visitor Center to get our bearings, we found the picnic area named Mouse's Tank, populated by the boldest little ground squirrels you could imagine, practicing their cutest poses to try to convince us to donate some of our lunch to them.

After lunch, we took a short walk to admire the Valley of Fire petroglyphs, which are nothing short of astounding.

Then we were back in the car again, and soon back on I-15, and not long after that we were through Nevada, and had sliced a corner off of Arizona, and were solidly into Utah, before we left the freeway to take Utah State Route 9 east into Zion National Park.

The days are short, this time of year, so even though we got to the park gates at about 5:45 PM, it was already pitch dark, and we crept along the park road quite slowly, peeking around every corner for deer, trying to figure out where our turn was. Zion Lodge is located most of the way up the canyon road, deep in the main canyon, enjoying a location that can stand toe-to-toe with any hotel on the planet for claim to "Most Beautiful Lodge Location".

But, as I say, it was completely dark out, and we were exhausted, so we simply checked into our room (which was wonderful: spacious and elegant), had dinner at the lodge restaurant, and collapsed into bed.

Deep in the main canyon, sunset comes early and sunrise late, particularly this time of year. But up we got, the next morning, and bravely we set out to explore Zion National Park. Lo and behold, as the sun started to crawl slowly down the western walls of the canyon toward the valley floor, we found ourselves nearly alone in a place of tremendous beauty, with nearly as many mule deer as human visitors keeping us company on our explorations.

At the very end of the canyon road, one of the most famous trails is the Riverside Walk, which leads into the section of the Virgin River canyon known as The Narrows, launching spot for those interested in the sport of Canyoneering. We could barely imagine this, for at the time we walked the trail the temperature was 34 degrees, and a steady breeze was blowing, so we were fully encased in every shred of clothing we could layer upon ourselves, but at the trail's end there were nearly a dozen people, of all ages, clad in little more than long-sleeved swimsuits, waterproof hiking boots, and gaiters, setting off confidently into the rapidly-flowing, near-freezing waters of the Virgin River, headed upstream for adventure.

We had decided to work our way, slowly, back down the main canyon, and so we did, stopping to hike the Weeping Rock trail, the Emerald Pools trail, and the Watchman trail, among others, as well as stopping along the road for half an hour or so to watch people hiking up Walter's Wiggles (as well as rock climbing the cliff face below the Angels Landing trail).

No, we didn't do the Angels Landing trail. Yes, it's true: I ruled it out from the start. Uh, here's the reason why.

By the end of our first day, we were well and thoroughly exhausted, but also extremely pleased with the day.

There's just nothing like the experience of spending an entire day in a National Park: waking up in the park, spending all day in and around the park, and then remaining in the park when all the daily visitors go home, and it's just you lucky few. And the mule deer.

Once again we woke up the next morning in complete darkness, and made our way over to the lodge for breakfast, with aching muscles yet still aching for more.

Zion National Park is fairly large, even though compared to some national parks it's not gigantic, and I was hungry to see as much of the park as I could.

So we popped into the car and drove up Kolob Terrace Road, which in barely a dozen miles took us up from the 3,500 foot river elevation to the 7,000 foot elevation of Upper Kolob Terrace.

We were well-prepared: we had brought our lunch, and, as it turns out, we had brought the right clothing, for by the time we reached the Northgate Peaks trail it was already in the low 50's, and by the time we reached trail's end it was in the low 60's. Sunny skies, perfect temperatures, no bugs, and a nearly-level 2 mile hike to an amazing canyon viewpoint: is there any better way to spend a day in the mountains?

On our way back down, we stopped at Hoodoo City and tried to follow the trail over to see the peculiar rock formations, but it was slow, sandy going, and the closer we got to the rocks, the more they seemed to fade into the distance. Our decision was made for us when we met a couple returning from the trail who told us they were pretty sure they'd heard a mountain lion growling just a few dozen yards from the trail.

So back down the hill we went, and decided to settle for a yummy dinner at the local brewpub.

All good things must come to an end, and it was time to return to civilization, so we got a good early start on our final day in the mountains and made a short stop at the third part of Zion National Park which is easily accessible: Kolob Canyons. Happily, we had just enough time to drive up to the end of the road to take in the truly remarkable views. The views from the roadside parking lot are superb; the views from the end of the Timber Creek Overlook trail are even better.

Back down I-15 to Las Vegas we went. My mother, who knows a lot about this part of the world, swears that U.S. 395 along the Eastern Sierra is the most beautiful road in the 48 states, and she's got a fine case, but I think that the stretch of I-15 from Las Vegas, Nevada to Cedar City, Utah is a serious contender, particularly on a clear winter's day when the view goes on forever (well, at least 50 miles).

It was as nice a way as one could ask to end as nice a weekend as one could hope for.

If you ever get a chance to visit Zion National Park in winter, take it.

In the Valley of Gods

Oh boy!

Oh boy oh boy oh boy oh boy oh boy!!!

Campo Santo return!

Campo Santo, makers of the astonishingly great Firewatch (you know, the game with that ending), have started to reveal some of the information about their next game: In the Valley of Gods.

In the Valley of Gods is a single-player first person video game set in Egypt in the 1920s. You play as an explorer and filmmaker who, along with your old partner, has traveled to the middle of the desert in the hopes of making a seemingly-impossible discovery and an incredible film.

Here's the In the Valley of Gods "reveal trailer".

Looking forward to 2019 already!

Another milestone in computer chess

This just in from the Deep Mind team: Mastering Chess and Shogi by Self-Play with a General Reinforcement Learning Algorithm

The AlphaZero algorithm is a more generic version of the AlphaGo Zero algorithm that was first introduced in the context of Go (29). It replaces the handcrafted knowledge and domain-specific augmentations used in traditional game-playing programs with deep neural networks and a tabula rasa reinforcement learning algorithm.

...

AlphaZero convincingly defeated all opponents, losing zero games to Stockfish and eight games to Elmo (see Supplementary Material for several example games), as well as defeating the previous version of AlphaGo Zero.

...

we analysed the chess knowledge discovered by AlphaZero. Table 2 analyses the most common human openings (those played more than 100,000 times in an online database of human chess games (1)). Each of these openings is independently discovered and played frequently by AlphaZero during self-play training. When starting from each human opening, AlphaZero convincingly defeated Stockfish, suggesting that it has indeed mastered a wide spectrum of chess play.

As for myself, I seem to hang pieces more frequently than I did a decade ago.

But I still love chess.

And, in that part of the world not (yet) inhabited solely by deep neural networks, That Norwegian Genius is going to play again, in London, next November: London Will Host FIDE World Chess Championship Match 2018.