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Private Equity Continues To Pour Money In At Unreasonable Valuation And Risk

A report from the Idaho Statesman. “Downtown Boise has become a popular residential neighborhood, with more than 300 new apartments, townhouses and condominiums opening in the past two years. Amid a virtual stampede of developers rushing to put up Downtown housing, there will soon be even more choices. More than 1,000 units are in the planning stages Downtown and just south of it across the Boise River.”

“Veteran Boise developer Clay Carley plans to join the frenzy. He wants to build a six-story apartment building with ground-floor retail stores at 5th and Grove streets. It’s too early to know what tenants will pay, he said. But here’s what ‘market rate’ means in other new apartment buildings: high enough to make even costly-to-build Downtown housing profitable in a hot market. Carley said he’s not worried about the fast-rising number of Downtown residences.”

“‘If we were more like other urban areas, Denver and Salt Lake City and others, I think we’d have almost twice as many apartments and condos Downtown as we do today,’ he said. ‘We’re still behind.'”

From Bisnow on New York. “New York’s multifamily investors are lamenting the upcoming rent regulation that has frozen sales this year, and the city’s condo developers are equally frustrated with the sluggish condo market. Money isn’t changing hands very often on any level in the residential sector. Even though prices are dropping marketwide, they have not yet reached the point where buyers have started taking advantage of opportunities.”

“Meridian Capital Group Senior Managing Director Morris Betesh pointed out that prices could be decreasing more, but developers of the tens of thousands of condo units on the market can only lower asking prices so much — they are legally required by lending agreements to get a certain price on their units. ‘There’s definitely a tension between developers, investors and lenders about what to do with these condos that are sitting on the market,’ Betesh said. ‘For developers, there’s tremendous liquidity in the market from the debt capital markets to delay that through inventory loans or other means. So their hands haven’t been forced yet to drop pricing.'”

“Instead, developers are increasingly offering buyers other incentives. Hornig Capital Partners Managing Partner Daren Hornig cited Tishman Speyer and Extell Development — which has offered to pay 10 years of common charges on one of its Lower Manhattan projects, he said — as some of the city’s biggest developers being the most aggressive with these tactics. ‘It’s the developers negotiating against other developers,’ he said. ‘Per-square-foot [price], that doesn’t matter. It’s these other incentives that are driving the market.'”

The Times Picayune in Louisiana. “Average rent in New Orleans fell in 2018 and the city saw the largest dip in rates for one- and two-bedroom apartments among major U.S. cities, according to a new online analysis. The city saw the sharpest decrease in one-bedroom rent in the nation, down 11.4 percent from the year before. Similarly, rent for local two-bedroom units fell at a nation-leading pace.”

“At the same time, New Orleans has seen an uptick in multifamily construction, including new apartment high-rises in the Warehouse District and developments in Mid-City and the Lower Garden District.”

From Senior Housing News. “Senior Living Communities CEO Donald Thompson foresees that current market pressures will last longer than many in the industry expect, and that there will be fruitful investment opportunities on the horizon. ‘I don’t think this overbuilding is going to go away as fast as people think,’ Thompson told Senior Housing News.”

“‘I had a bank the other day tell me, ‘We can help our developers live through this for a couple years, and it will be fine,’ Thompson said. ‘I’m thinking, ‘What if your move-in age moves a whole year in that phase? You’ve got three years to catch up, not two.'”

From McKnights Senior Living. “LTC Properties issued a notice of default to Thrive Senior Living on April 5, as well as a demand for payment of $2.6 million, the Westlake Village, CA-based real estate investment trust’s CEO Wendy Simpson, said. When asked why the company hasn’t paid 2019 rent, Clint Malin, executive vice president and chief investment officer, said, ‘It’s a function of cash flow at the communities.'”

“Thrive operates a total of 20 communities, according to its website. Simpson said LTC continues to build a pipeline and evaluate opportunities — mostly private-pay assets, Malin added — but that ‘closing transactions has been slower than we would like, as a pricing disconnect remains between buyers and sellers.’ ‘As long as private equity continues to pour money into the marketplace at what we believe are unreasonable valuation and risk, this discount is likely to continue,’ she added.”

The Real Deal on Florida. “Jorge Pérez’s effort to unload a four-bedroom penthouse he owns at One Ocean in Miami Beach may have just gotten more complicated. Miami’s condo king just chopped nearly 50 percent off his original three-year-old asking price of $20 million on the unit, in response to the oversupply of luxury condos.”

“Now, One Ocean’s condominium association is alleging Pérez’s firm, the Related Group, along with seven companies involved in the project’s construction, did a defective job building the 50-unit project at 1 Collins Avenue in Miami Beach’s South-of-Fifth neighborhood.”

“According to a Douglas Elliman’s first quarter sales report, 70 luxury condos sold in Miami Beach and the barrier islands, a 2.8 percent drop from the same period last year. Listings averaged 195 days on the market, a 41 percent increase compared to 2018’s first quarter.”

From CBS News on Florida. “If your memories of the past accept a ‘Jetsons’ vision of the future, your concept of flying cars is not very accurate. But after decades of promises, it looks like flying cars are finally becoming real. The cost: $400,000 to $600,000. But coming up with the money won’t be the only hurdle to driving (or flying) one off the lot. If you buy one, you’ll need training in a gyrocopter, and a license to fly. And the cars will need runways, albeit very short runways – about 300 feet long to get airborne, according to pilot Bob Snyder.”

“Of course, before anyone gets on board, all these flying taxis need space, like helipads, to take off and land. And developers on the ground have started paying attention to developments in the air. An ultra-luxurious condo building under construction in Miami advertises that its rooftop is ready to accept flying cars. ‘We just don’t have room to grow on our roads anymore,’ said developer Dan Kodsi. ‘And so, it’s inevitable that we’re gonna start seeing this Jetson-style lifestyle.'”

“Because it’s Miami, there’s a swimming pool on the roof now, but prospective buyers know their building could have its own so-called ‘skyport’ if and when flying cars become common. ‘Some question it,’ Kodsi laughed. ‘I don’t think people understand it enough.'”

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This Post Has 101 Comments

  1. ‘a pricing disconnect remains between buyers and sellers…As long as private equity continues to pour money into the marketplace at what we believe are unreasonable valuation and risk, this discount is likely to continue’

    This sums up why quantitative easing is deflationary. It goes out, seeking a return, any return, drives down yields and ultimately flies off to money heaven.

    1. ‘There’s definitely a tension between developers, investors and lenders about what to do with these condos that are sitting on the market…For developers, there’s tremendous liquidity in the market from the debt capital markets to delay that through inventory loans or other means’

      Tremendous liquidity, to warehouse airboxes and postpone the inevitable. Jeebus what a bunch of fools these people are.

      ‘I had a bank the other day tell me, ‘We can help our developers live through this for a couple years, and it will be fine…I’m thinking, ‘What if your move-in age moves a whole year in that phase? You’ve got three years to catch up, not two’

      1. Living in Boise in an Apt? Where do I park my boat, jeep and kayaks? Just move to Dallas if you like apt dwelling.

    2. “As long as private equity continues to pour money into the marketplace at what we believe are unreasonable valuation and risk…”

      Aren’t the investors in the firms that are pouring money down the senior living center development rathole of the same class of citizens who can reasonably expect to be on the receiving end of bailouts when the eventual crash arrives?

      It looks like yet another version of heads wreckless gamblers win, tails wreckless gamblers get bailouts.

  2. Meridian Capital Group Senior Managing Director Morris Betesh pointed out that prices could be decreasing more, but developers of the tens of thousands of condo units on the market can only lower asking prices so much — they are legally required by lending agreements to get a certain price on their units.

    The thing is, Mitch, Mr. Market doesn’t give a rats ass about developer lending agreements. Prices will keep tanking because those units are overpriced and unaffordable. So developers will end up going bankrupt en masse, but true price discovery will emerge victorious from the foreclosure auctions. O happy day 🙂

  3. “It’s a function of cash flow at the communities.”

    If these places struggle to remain solvent on boomer income, God help them when they’re no longer with us.

    1. Like apartments, costs have never been higher. And they can’t pay their bills. There’s an odd arrangement in senior living that separates owners and operators who rent. But if the cash flow ain’t there, they are both toast.

      1. I’m fairly certain that there’s enough cash flow to make this work — there’s simply too much of it flowing to the wrong places.

        Pedestrian accommodations at luxury prices. The people who, finance, build and run these places all need to be put up against a wall and shot.

  4. Boise Facebook group bans comments bashing Californians, other …
    Idaho Statesman-May 18, 2019
    “Wages, housing and everything else is way out of equilibrium to what it … Cunningham sees the anger at newcomers from California and other states as bigotry.

    1. What good is the First Amendment if any speech or expression that offends someone can be banned as bigoted, extremist, offensive, etc.? It’s looking more and more like the Constitution is a dead letter, if we have “rights” that can’t be exercised without being censored or worse.

      1. The left does not believe in the constitution. They will use it to get what they want, when it is convenient, but the left does not support it. The constitution was written by people who believed in limited government. The left believes in statism. Only conservative judges are constrained by the constitution. Liberal judges rule the way they want the world to go.

          1. Agreed – the ladies running the FB site didn’t want to be overwhelmed by moderating duties and flame wars, which is understandable. But my point still stands. Look at the creepy tech giants and their zealous “de-platforming” of an ever-widening list of citizen journalists and commentators for an ever-growing list of “offensive” content violations. I can see where this is headed: since the Oligopoly lost its monopoly on news and information when the Internet allowed truth-tellers to challenge the globalist media outlets and their Narrative, they have to systematically silence such people because they literally can’t handle the truth. Imagine the calamity for the elites who have been robbing us blind if the sheeple were to become awake and aware because alternative media opened their eyes and exposed the lies and propaganda they were being fed by the globalists’ media-entertainment complex.

          2. ‘de-platforming’

            How about shadow banning? What is the justification for that? Those people don’t even know about it.

        2. trump is no fan of the 1st, 8th 14th and Separation of Powers. This is new for America. Mitch follows.

          1. Despite your pathological need to drag Trump into every thread topic, it is the globalists who are driving the assault on the Constitution, not Trump.

            Hillary lost, brah. DJT is now your president. Hug your support poodle if you must, but move on. If you want to vent incessantly about Trump, the future cat ladies over at HuffoPo would welcome your contributions to their hysterical caterwauling and pearl clutching. Here at the HBB, not so much.

      2. ‘the anger at newcomers from California and other states as bigotry’

        big·ot·ry
        /ˈbiɡətrē/
        noun
        noun: bigotry; plural noun: bigotries

        -intolerance toward those who hold different opinions from oneself.

          1. Yes. And I agree with your point above. Look the media is in meltdown because Trump used the word treason. But is it not treason to promote world government when government officials have taken an oath to the United States? We lose our sovereignty in world government. I think the globalists are growing quite fearful that the sheeple will learn what has been really going on for decades and call it treason and attempt to hold them accountable. It is more than money involved although their treason was motivated by greed. The full truth could send them to prison.

    2. Here are your options Boise residents:

      1) Move to CA and embrace the tent lifestyle
      2) Drive ’till you qualify (e.g. embrace long commutes where builders can find affordable land to build on
      3) Accept that you will pay an ever larger share of your income on rent, or worse, on a mortgage. In the case of a mortgage, you will probably destroy your financial lives when the bubble fully pops.
      4) Join some labor movement and lobby for increased minimum wage
      5) Become an equity locust yourself and flee farther inland to a lower cost of living locale.

      I’m sure I missed some options. Not a lot of great options out there for the average Joe/Jane that is living through the repercussions of a massive distortion of the market.

      1. I’m just holding on until the market inevitably corrects. I haven’t purchased anything yet. All of my immediate family lives in Boise and I have a good job, so I’ll play the waiting game.

    3. If the crashing of the bubble reaches terminal velocity, NAR and their consorts will be lobbying to have this blog shutdown.

  5. Far be it from me to question the omniscience of our globalist overlords, but maybe off-shoring our manufacturing base to an increasingly hostile and jingoistic adversary wasn’t such a hot idea. Giving them unlimited access to our housing market might come back to bite us as well if a full-blown conflict breaks out between the U.S. and China.

    https://www.zerohedge.com/news/2019-05-19/china-state-run-media-broadcasts-anti-american-movies-millions-amid-deepening-trade

    1. The globalists want one world government. A strong U.S does not promote that goal, it is an impediment. The PTB globalists learned from 2008 but not the lesson we wanted them to learn.
      They learned never to allow a bubble to deflate. At first the 2008 recession actually promoted one world government because Obama was the ultimate globalist. His policies promoted world wide consumption and the US helped lift the rest of the world out of recession while the average American grew poorer and the National debt grew by 9 trillion with virtually nothing to show for it. However, the recession promoted populism throughout the world and increased opposition to globalism. Thus, as much as the globalists hate Trump when it became apparent that their policies to cause economic problems in the United States were actually causing more problems in the rest of the world and deflating bubbles, they backed off. China is offsetting the trade war by spending money like crazy. Yes it only inflates its bubble but the PTB use bubbles to promote globalism. Once they have what they want they can deflate them and we will be powerless to stop them. Yes, people like Romney are frighten that China collapsing will deflate the bubbles elsewhere, but China is already inflating its bubble more which will maintain demand for coal, iron ore etc, and thus keep the global bubbles maintained.

        1. Have you ever tried to read it? Not the original one, the current one. I did, and it’s a complete mess.

  7. Hi. I was formally known as Housing Wizard, if anyone remembered my posts years ago. Yes, I’m still alive. Thinking of posting again.

    2. Welcome back Wiz … The recent new late $pring listing$ of u$ed.$helter.$hacks is putting a world of hurtin’ into Mr. Ben’s hou$ing $hortage prognostication$!

      1. My new name reflects my current view. Back years ago when the market crashed the opportunity was there to correct what had gone awry. Since I posted before (about 10 years ago), the World is even more crazy. This is what happens when you have false solutions. No doubt this is a new housing bubble. As I said years ago the housing prices have to track with middle working class wages, or the price is built on a house of cards. Actually all prices must track with wages and that includes health care, food , cars, etc.

    4. Good to hear from you. I enjoyed your posts from days of yore, and look forward to seeing what you say under your new name.

      1. My good old friend Professor Bear. I think the housing bubble is back and that sucks.

  9. How about shadow banning? What is the justification for that?

    YouTube also systematically deletes views from videos that are anti-globalist or otherwise challenge The Narrative. A French yellow vest sympathizer made a song video, “The Good Guys, The Bad Guys” that went viral, and would probably have 40 million views or more given its popularity in Europe and the U.S. However, sharp-eyed viewers have called out YouTube for stealthily deleting tens of thousands of views a day – something I noticed myself after it first went viral, and the viewer count would rise rapidly, then mysteriously drop. So it’s clear the tech giants and their globalist owners are deeply hostile to such non-approved content, and use all kinds of underhanded means to suppress it.

    https://www.youtube.com/watch?v=cBiHJxGxz1g&feature=youtu.be

    1. Yeah, that’s like the shadow banning. These people made a video, put it up and it’s basically blocked without their knowledge. They just think no one is watching the video. That’s a really low move.

      1. It must infuriate the globalists when their approved media outlets like Salon and HuffPo are being forced to reduce headcount and may go bankrupt due to dwindling subscribers or viewership, while citizen journalists who gained popularity and large followings on YouTube due to their truth-telling and credibility were making out pretty well until YouTube de-monetized them. The globalists cannot stand the thought of competition, because they and their MSM minions will always lose out to the truth. So any justification will suffice to ban the truth-tellers and cut off their ability to earn a living or disseminate their content. ‘Murica, land of the free, home of the brave!

      2. Ben,

        I am curious about your current venture with the foreclosure data. Specifically in reference to the hidden “shadow” inventory in discussion on this post. In my town I can check the county records website such as Santacruzrecord.com and it will list properties that have been foreclosed on and ready to go to auction at the county building like one at 3054 Elda Lane Santa Cruz 95062 which is going to auction 5/29 but searching that elsewhere on the internet provided no results ie realtytrack. These are county auctions which I’m guessing are foreclosed due to non payment of property tax. Are these considered “shadow” inventory or is it just ones the banks hold onto? Is there anyway to find the inventory for all the shadow inventory held by banks or is it hidden on purpose and basically why it’s called “shadow” inventory… I am very intrigued but have little knowledge in this dept. one more question. If a bank holds onto these foreclosed properties, wouldn’t they be paying the property taxes or do they get some special pardon?

        1. If they own it, they pay. The problem is slow-rolling pre-foreclosures. Postponing again and again.

          I’m in the process of evaluating some websites. Anyone can track foreclosure notices through the county sites, even by trekking down to the courthouse. But these are very time consuming and in some cases impractical. Once I decide on a best course, I’ll put it out here or in videos.

          ‘searching that elsewhere on the internet provided no results ie realtytrack’

          The biggest problem: holes in the data.

          1. Ok glad to know that even if the banks keep them secret they still pay the taxes. Pre foreclosures are obviously a big problem and hoping to see something change where they stop delaying them but that’s just me and my wishful thinking.

  12. ‘after decades of promises, it looks like flying cars are finally becoming real. The cost: $400,000 to $600,000. But coming up with the money won’t be the only hurdle to driving (or flying) one off the lot. If you buy one, you’ll need training in a gyrocopter, and a license to fly. And the cars will need runways, albeit very short runways – about 300 feet long to get airborne’

    Hands up all those who want even one of these things.

    ‘An ultra-luxurious condo building under construction in Miami advertises that its rooftop is ready to accept flying cars…‘And so, it’s inevitable that we’re gonna start seeing this Jetson-style lifestyle’

    Once again, proof that drug use is still prevalent in Miami.

    ‘Some question it,’ Kodsi laughed. ‘I don’t think people understand it enough’

    You couldn’t get me to sit in one of those death traps.

    1. Imagine the billions of Yellen Bux that are going to make the ultimate sacrifice once those “ultra-luxurious” condo towers go under the auctioneer’s hammer in every formerly “super-heated” housing market. We should start a go fund me site to commission a proper memorial. Any ideas, HBB miscreants? Be respectful now….

    2. “You couldn’t get me to sit in one of those death traps.”

      I cringe at the thought of the horrendous middair collisions we will read about in the future if these things ever get off the ground.

      That said, it doesn’t seem like they will pencil out for anyone except for a few 1%ers at a sticker price north of $400,000.

      2. it doesn’t seem like they will pencil out

        It’s a broad net to catch some living in the mania. It’s not a helipad, or even a 300 ft runway. Look, it’s actually a swimming pool.

    3. Cross wind landings 34 stories up should yield interesting results. It is, as much as I would like to see this future, just a gimmick to sell air boxes.

    4. after decades of promises, it looks like flying cars are finally becoming real. The cost: $400,000 to $600,000.

      Watch them get immediately undercut by unlicensed overgrown drones.

  13. I saw this for a house built in 1969 in ABQ. “Electric wiring has also been pig tailed.” Does this mean it has aluminum wiring throughout and copper at the ends?

  14. Who are the biggest “globalist?” Exxon, Boeing, Walmart, Nike, Apple…? What party support do they get?

  15. Personally, I am intrigued by the vertical take-off landing vehicles (VTOL). I’m watching Lilium. We often rag on the self-driving car projects on this forum, but it seems like the new Boeing jets have killed way more people than self-driving cars have.

    1. The new Boeing jets were the product of a corporate culture of cutting costs and corners, with the connivance of captured or criminally negligent regulators and enforcers, to maximize “shareholder value” (stock prices) at the expense of safety and the long-term viability of the Boeing company. Sure, a few hundred air travelers died, but don’t lose sight of what’s really important here – the CEO and top corporate officers made bank on their stock options! And none of the company brass who pushed the engineers to meet unreasonable deadlines and who cut corners on safety and quality control, or the regulators who let them get away with it, will ever be held accountable in our crony capitalist wonderland.

      1. That’s a shame, given that they are competing on an international playing field.

    2. “…the new Boeing jets have killed way more people than self-driving cars have.”

      Not if the comparison is on a death per transit mile basis.

      1. While human driven cars have a death rate in the U.S. of about 1 per 100 million vehicle miles, my impression is that self-driving cars are silently being tested on U.S. roadways despite a current death rate several times higher. While the exact numbers are hard to find, it appears that multiple fatal accidents have occurred over far below 100 million miles of testing. I don’t know how this compares to teenage driving experience.

        If anyone can find an estimate of fatalities per 100 million self-driving miles, please post.

        1. Agreed, we are talking about apples vs. oranges. L5 self-driving doesn’t exist, so all we have right now is driver assist solutions, like an advanced cruise control. We shouldn’t call it “auto-pilot” because that is confusing and misleading.

          My larger point was that there were massive causalities from a heavily regulated industry and the US government was basically like, “It’s fine, nothing to see here. Don’t want to jeopardize those trade dollars with other countries and the order book of Boeing planes.” Seems a little cavalier when you have faulty software forcing a nosedive on these jumbo jets.

          By the way, last quarter Tesla’s accidents per autopilot was 1 accident per 2.91 million miles driven. The accident rate for normal gas cars is 1 accident per 436,000 miles, so it does seem like autopilot is safer. More data is needed though.

          1. But we should assume that what’s being tested currently is believed safer than L5 driving. Otherwise why wouldn’t they be testing only L5?

          2. Waymo seems to be in the lead from what I’ve read, though there are lots of players who are testing various solutions around the world. I’ve heard GM’s Cruise Automation is making good progress. Waymo has a fleet active in Arizona.

            Tesla is doing things completely different than Waymo as explained in their autonomy day. Their autopilot stats on accidents are not self-driving, rather more like an L2 or L3 driver assist.

        1. If this information is correct, there have been five fatalities so far in self-driving tests. If the total number of test miles is conservatively estimated at 33 million, that comes out to 15 fatalities per 100 million miles, or 15X the rate for U.S. human drivers.

          The comparison would look far worse with inebriated drivers and occupants failing to wear seat belts omitted from the human driver data.

          2. Those numbers are useful in some regards, but way off in others. If you are counting Tesla fatalities as self-driving then it doesn’t make sense. That would be like trying to count the number of fatalities for cruise control.

            Also, autopilot has been driven well over a billion miles, so you’d need to revisit that math. It would be like:

            5/1,000,000,000, or about 1 fatality for every 200 million miles, or twice as safe as normal vehicle driving.

          3. ‘twice as safe as normal vehicle driving’

            They have two guys sitting there in case it needs to be taken over.

          4. “Also, autopilot has been driven well over a billion miles, so you’d need to revisit that math.”

            Seems like you’re totally ignoring the statistics I posted to document that no more than about 30 million self-driving miles have been tested in actual driving conditions.

            “…autopilot has been driven well over a billion miles…”

            If you are claiming that this occurred in actual public traffic conditions, then I’m wondering why none of the sources I posted mentioned that. Could you please site your sources (but don’t bother if this is just something Elon claimed…).

          5. Could you please site your sources

            OAM will probably cite this electrek.co article. Electrek might as well be Tesla PR. A month ago, the author of the article, Frederic Lambert, and Elon got in a Twitter spat about bias:
            “Anti Tesla? You haven’t been following my coverage closely. I’m still extremely positive on Tesla. I wrote about 3,000 articles on Tesla over the past 4 years. Maybe 100 have been somewhat negative, yet that’s enough to make me ‘anti Tesla’?”

            Another possible source for information regarding autonomous vehicles might be Edward Niedermeyer at The Drive and his new “Merge Now” podcast. OAM will likely disagree.

          6. Could you please site your sources

            This may be a double post. My first one is showing.

            OAM will likely cite this electrek.co article. Electrek might as well be Tesla PR. The author, Frederic Lambert, and Elon got in a Twitter spat last month about bias:
            “Anti Tesla? You haven’t been following my coverage closely. I’m still extremely positive on Tesla. I wrote about 3,000 articles on Tesla over the past 4 years. Maybe 100 have been somewhat negative, yet that’s enough to make me ‘anti Tesla’?”

            For more information about autonomous vehicles, you might want to consider Edward Niedermeyer at The Drive.

          7. If you are claiming that this occurred in actual public traffic conditions, then I’m wondering why none of the sources I posted mentioned that. Could you please site your sources (but don’t bother if this is just something Elon claimed…).

            For validation, see this post from MIT’s human-centered Autonomy:

            https://hcai.mit.edu/tesla-autopilot-miles-and-vehicles/

            I personally have already logged about 2000 autopilot miles. Like I said, conflating self-driving with autopilot doesn’t make sense because current versions of autopilot don’t claim to be fully autonomous. In fact when I actually purchased my model 3, the showroom staff went out of the way to use TACC (traffic aware cruise control) and auto-steer instead of “autopilot”. Now Elon has thrown “full self-driving” into the mix as a new term to grapple with, but that doesn’t mean that humans don’t have to pay attention. It is basically something along the lines of what the Waymo safety drivers do: they just sit in the driver’s seat and be alert to take over if/when the self-driving fails. It’s the mushy middle on the way towards autonomy. It gets dangerous when people think it is so good that they can watch Harry Potter (which happened) and then they run into a semi driving across a highway.

            The autopilot miles that are definitely over a billion now. These are some combination of traffic aware cruise control and autosteer, or both. I can go most of my 300 mile drive without my hands on the wheel or feet on the pedal (but of course I don’t, because I’m not an idiot).

          9. Could you please site your sources

            For the source, I cited the MIT Human-Centered AI page. I haven’t really read much of anything from Edward Niedermeyer. I am mostly interested in electric mobility (bikes, scooters, cars, trucks), so Elecktrek is a good source. My personal view is that gas is a dying technology. The future is here, it just isn’t evenly distributed. Right now EVs are the shiny bauble for those who can afford it. In the not-too-distant future all cars will be electric because to do otherwise would make no sense financially. Cost parity depends on battery technology right now. Yes, I have a Tesla and love it. But I don’t really care who wins the EV race. There will be multiple winners. It looks like VW is making good strides.

            I am interested in autonomous vehicles, but only if they are not using gas.

          10. I can go most of my 300 mile drive without my hands on the wheel or feet on the pedal (but of course I don’t, because I’m not an idiot).

            I expect that sooner or later someone will realize that if a system allows you to not pay close attention, you will not pay close attention. We will have that chiseled into your marker: “I am not an idiot.”

          11. I expect that sooner or later someone will realize that if a system allows you to not pay close attention, you will not pay close attention.

            Tell that to the scores of regular folk I see texting while driving all around me, including people of a certain age.

        2. The mushy middle transition between partial autonomy and full autonomy is treacherous. It may seem like your car can drive itself, but it cannot. It lulls owners into a false sense of complacency. There are tons of warnings and alerts that prompt me to “take back the wheel” when my hand has been off the steering wheel for too long.

          1. I look forward to your comments on my spitball estimate of the autonomous vehicle kill rate when it shows up.

      3. Waymo has reportedly logged more self-driving miles than all competitors combined, and they are in the 10-20 million mile total range, so I would guess the total for all companies combined at around 30 million.

        Waymo’s Robots Drove More Miles Than Everyone Else Combined
        But in newly released numbers from California regulators, the challengers in the self-driving-car race are looking better.
        Alexis C. Madrigal
        Feb 14, 2019
        …

        1. So Tesla is completely different when it comes to their self-driving efforts. They are running shadow mode on auto-pilot and collecting data vs what their algorithms would do vs what actual humans do. Then they use the AI and machine learning to bridge the gap in the edge case. A very interesting scenario was shown on autonomy day when the camera vision was shown looking at a bike on the back of an SUV. It was able to recognize that the object was not a cyclist (even though it was clearly a bike), but actually a bike strapped on to the back of a vehicle. The behavior in such instances would be radically different for how a self-driving (or partially self-driving) vehicle would behave.

          Having driven a Tesla for 2 months now, I think I understand a bit at how the autopilot works. It’s definitely not perfect, but it amazes me at how good it is in some instances. It’s also not logging autonomous miles and registering them with the California transportation board because their self-driving approach is vision-based vs. Lidar and 3D map based.

          1. “It’s definitely not perfect, but it amazes me at how good it is in some instances.”

            Have the AI gurus gotten past the point of training bots to respond to previously encountered experiences? The human mind has an amazing creative capacity to respond appropriately to new situations which have never previously happened, which I imagine would be hard to train a bot to anticipate.

          2. Have the AI gurus gotten past the point of training bots to respond to previously encountered experiences?

            It’s all based on neural nets. If you are interested, I highly recommend watching the YouTube autonomy day presentation. At 1 hour and 52 minutes is where Andrej Karpathy starts to speak about computer vision. Very fascinating. He is he director of artificial intelligence and Autopilot Vision at Tesla, and he designed Stanford’s course and the entire curriculum.

          3. I took Stanford’s Machine Learning Course on Coursera.org, which included neural nets under the scope of the curriculum. My impression of neural nets is that they can only learn potential cause and effect relationships from past experience, not rising to the uniquely human potential to creatively respond to circumstances never previously encountered.

            But I’m sure the hucksters and hypesters with billions at stake in AI development will beg to disagree.

          4. “…not rising to the uniquely human potential to creatively respond to circumstances never previously encountered.”

            A.I. can creatively respond, but recall Asimov’s Three Laws?

    3. There’s really no comparison between air travel and vehicle safety on a per-miles basis. Of course, flying cars could change the picture alot!

      …
      The number of deaths per passenger-mile on commercial airlines in the United States between 2000 and 2010 was about 0.2 deaths per 10 billion passenger-miles.[1][2] For driving, the rate was 150 per 10 billion vehicle-miles for 2000 : 750 times higher per mile than for flying in a commercial airplane.
      …

      1. Yes, air travel in general is safer than road travel. But what if you looked at the number of miles traveled for just the Boeing Max 737 and passenger fatalities. Those numbers would look decidedly different.

        1. Agreed. I don’t have the data, but I would guess the numbers would still look better than five self-driving car deaths over 33 million or so test miles.

          1. I seriously doubt it. I found a Boeing press release celebrating 118,006 flight hours on 5/22/18. A quick Google search shows the average speed of a 737 Max to be 564 mph. If we double the flight hours to account for another year, that would be roughly 240,000 flight hours, close to 134 million miles flown. This is probably way too high though since it is all the hours flown by any variant of the Max line.

            347 people have died on the Boeing 737 Max 8. So my back-of-the-envelope math shows about 347 / 134 million miles to be about 1 death per 367,000 miles flown. That plane is by far the most deadly ever in history, which is why it was grounded worldwide. Of course air travel in general is much safer, but riding in a Boeing 737 Max seems more dangerous by a couple levels of magnitudes than Tesla autopilot. I’m sure Boeing will get their software sorted out though, but I don’t think we will reach 357 deaths from self-driving any time soon.

            The data at airsafe shows that

          2. I have the impression that there was a serious breach of safety testing protocols involved with the rollout of the Boeing Max 737, which resulted in an elevated crash risk. I suspect the numbers would support this, even if correctly calculated to reflect the uncertainty in a limited amount of flight experience.

          3. a Boeing 737 Max seems more dangerous by a couple levels of magnitudes than Tesla autopilot

            This is a really bizarre defense of Tesla autopilot.

            BTW, there is no such thing as “levels of magnitudes”. It should be “orders of magnitude”.

          4. This is a really bizarre defense of Tesla autopilot.

            How so? I am merely showing that Tesla detractors regarding autopilot are getting worked up into a tizzy when compared to relative risks. It is a well-documented phenomenon that typical human cannot understand risk very well, which is why most people have an irrational fear of terrorism or some pandemic when the most dangerous thing they do every day is get into their car. You may be the safest driver in the world, but you cannot control those who are also driving who are drunk, high, distracted, drowsy, or have lost some of their reaction time and capabilities. Driving any car is super dangerous. There is no data to show that autopilot is conclusively more or less dangerous, although the preliminary data suggests it may be less dangerous.

  16. Is anybody as concerned as I am about the current controls on speech and thought ? I have never seen anything like it since I have been alive anyway.

    2. Our first, second and fourth amendment rights as well as the electoral college that protects us from mob rule are all under attack. It is very concerning.

    3. the current controls on speech and thought ?

      I do not feel constrained except for normal politeness more or less. We live in a manic time in so many respects. Unrestrained mania is always abusive. Debt donkeys have a sign on their back.

  17. Dumb question of the day: Does the dismal Über IPO represent the bleeding edge of Unicorn Bubble collapse?

    1. Over 15
      years ago the media betrayed the public by being cheerleaders for the housing boom for most part. Nothing seems to change

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