-----

if you don't understand the post at a glance it's because op wrote it wrong and needs your help

if the post doesn't contain all the contextualising information you need to understand it, op is gaslighting you

if you haven't experienced the phenomenon the post describes, op is making it up for clout

if you haven't encountered the type of person the post describes, they're a strawman that doesn't exist

if the post doesn't address a topic you'd prefer to talk about, it's a distraction, missing the point, and talking over you

if the post makes a good point, it is your duty to contribute to human enlightenment by nitpicking it to be more correct

and most importantly:

This logic has that nice, 'first blush' appeal to it, but it is handwaiving away a bunch of things outside the frame. Like who decides on asset values, after all? Not the bank! They say they do, but that is just a claim they have to make good on if they ever sell the asset. Someone has to buy it for $20 million for it to be worth $20 million. And if you think that buyer wouldn't notice that the building had a 50% vacancy rate for a decade, you have even less faith in markets than I do! This trick doesn't work, right? Bank balance sheets are heavily investigated by investors, business partners, etc. They notice these things.

Now, this is not to say the world isn't full of accounting sleight-of-hand, it absolutely is. But typically, and I mean really typically, that accounting sleight-of-hand is not done by forgoing revenue. People will absolutely pretend coal is a diamond, but not to the point of refusing to sell it to a willing buyer. There are a lot of downstream consequences of trying that - like in this scenario the commercial real estate holder is losing money on an investment! Which affects their creditworthiness, and thus the financing terms on their current and future projects. They can't just eat losses willy-nilly in order to do fake accounting, they need money to do The Business.

And if you can accounting-trick your way into not depreciating an asset, you can double-down and trick your way into renting it out too - as the essay itself admits:

Misha Valdman asked: If the system allows you to pretend that the vacancy is temporary, why doesn’t it allow you to lower rents on the pretense that lower rents are also temporary? This does happen sometimes: it’s packaged as “incentive offers,” like 50% off the first 12 or 24 months rent, or 6 months without rent, etc, that lower the average rent over the life of the lease without lowering the “list price.” That’s common in residential leases, and I know it happens sometimes in commercial leases, but I don’t know how prevalent it is.

He inserts this as like a handwaive, right, like "oh yeah you could do X, maybe", but like, no, everyone would do this, right? Tons of money is on the line here, this wouldn't be something that some companies dabble in for fun.

Which I can showcase, as the above comment alludes to, because the structure of the commercial real estate market is virtually identical to the structure of the residential rental market. The homeowner market is totally different, but large apartment buildings are absolutely built by large enterprises using a ton of debt, building financial assets for which the price of the asset is of high importance and is derived from the inputed rental income. And residential real estate just doesn't have high vacancy rates! When rents do go down, like in Covid, in the short term buildings absolutely do that whole 50% off thing, and if that doesn't stick they lower rates. Hell, they have more of an incentive to stick to fake numbers because rent control and the like restricts their freedom of pricing! But they fill units because that is how you make money.

Okay, all of that said, I am not saying that this is fully false - for one, I am sure it is a thing that occurs, particularly "at first". I can absolutely see companies refusing to admit to reality for ~6 months or w/e because that would make for some awkward convos with the bank and they would rather pray the vacancies away, very typical stuff. But in the longer-term that doesn't hold. However, it could hold if there is some kind of regulatory issue here - some tax rule, accounting standard, something, that would explain why this market doesn't clear the way it should. I believe that could be true very easily - it just isn't outlined in this essay, I want the details on that.

Still, my instinct is that we don't need an explanation for this because...we don't have high retail vacancy rates! They are actually incredibly low. This might be a fake problem, outside of micro contexts where you know life happens like in every industry. The essay mentions that big 5-and-1 style residential units in places like SF are mandated to have ground floor retail that the building pretty much treats as an amenity to the residents as opposed to a money-making endevour, so there you go, that situation is explained. And of course office vacancies are super high because of hybrid work, but you can't trivially convert office buildings to apartments, right? That is a fundamental use mismatch, and also a zoning story, etc.

Your loan isn’t held by the bank. It was almost immediately sold to be put in a structured product called a CMBS that’s held by anywhere between 50 and 500 investors like mutual funds, hedge funds (me), pensions funds, endowments, etc. (Edit: CMBS = commercial mortgage backed security. It’s like a box you put a ton of mortgages in and it’s divided up and sold to investors).

In the CMBS origination documents, there is language about how to modify the underlying loans. Generally but not always, you need a vote of the holders to approve modifications; 60% to 80% is common but somethings you see 50.1% and sometimes you see 100% required.

Here’s the thing - investors in a CMBS will have invested in different order of ‘risk’. The first people paid are called ‘senior holders’ and the last people paid are called junior/equity holders. If I am a senior holder, I want the bank to modify the loan ASAP bc all the losses from the loan hit the lowest tranche of the CMBS - and fuck those guys. If I’m junior, I do not want to modify the lease bc it forces me to absorb the loss immediately. I’d rather ‘prey and delay’ and hope the landlord can find a good tenant. So the investors in the CMBS are voting against each other which makes getting a strong majority close to impossible.

To start with, some boundaries:

Piracy is the act of a sailing ship attacking another sailing ship carrying goods for the purposes of ransom, robbery, and taking on new crew from their number. I will also allow some coastal raiding, even if that's not technically piracy.

Any system/culture of piracy is going to have to consider at least two things: supply of ships and supply of pirates.

Any system/culture of piracy is going to have to have some kind of prey. The snake cannot eat its own tail.

The pirates cannot be primarily state-sponsored, though the ecosystem can have privateers in it, and there can be other tacit approval of piracy from higher powers one way or another (especially e.g. bribes).

The age of piracy needs to be relatively geographically contained and relatively continuous, rather than moving from hotspot to hotspot.

So where does this leave us? What are the big problems to solve?

We need a continuous source of trade for pirates to plunder from. This has to be a trade route, or set of trade routes, that's incredibly stable, surviving political and economic disruptions, and has a high enough value that it persists in the face of piracy.

Sort of inevitably, the people trying to move goods from one place to another do not want them stolen. We probably have to model this thousand years as a series of changes in pirate tactics and trade tactics, but also as something that moves slower than in the real world.

As above, you need a source of ships. You can potentially get these from "pirate havens", but that gets dangerously close to being state-sanctioned if this is in fact the source of ships and pirates. So I actually think you're mostly fine if no one is building ships exclusively for piracy (or only doing that rarely), and instead most of the ships come from the major powers building ships. This is historically accurate, with capture and mutiny being the main source of pirate ships.

As above, you need a source of sailors. Being trained as a sailor took some time, and there's not that much room for on-the-job training for a pirate crew, though there is some. So the source needs to be navies or merchant fleets, and they need to be pretty terrible such that piracy offers the better option. And in the real world, there were lots of indentured servants, slaves, etc. who could get a better life by taking to the seas, though they wouldn't start with skill as sailors.

So we are, I think, starting to sketch out some features of the Thousand Years of Piracy just by implication.

We have a few major continents that are separated from each other by major oceans, maybe with some smaller islands between them to serve as pirate havens, secure harbors, etc. These continents have huge amounts of trade with each other that lasts for a millennium in spite of pressure for them to go local, which means they probably can't. They have incompatible climates leading to incompatible crops, they have different mineral wealth, etc. This trade is super profitable, enough that piracy only puts a dent in profits, and is "cost of doing business".

Macro technology is stagnant for whatever reason. The Scientific Revolution was not inevitable, I think all you need are pretty regular wars on the main continents that rip through institutions of learning, or purges of philosophers for ideological reasons, or just political fragmentation that means there's not quite enough stability to get thinkers together. (Yes, we're using instability to create the stability of stagnation.)

Micro technology is ... probably fine? At some point in the 1,000 years, there are changes to the sails, copper sheathing on the hulls, different shape to the bow, all probably fine. Cannons can get better, rifles and pistols can get better, any of this still falls within "1,000 years of piracy". Certain things are there to stay. Other things fall out of fashion.

What is a problem are changes in tactics. There needs to be no particular thing that can cost-effectively be done about piracy for a thousand years, or at least not in all cases. It's easy to imagine pirates as being a part of the risk-reward calculation for merchants, for pirates to be hunted by navies interested in securing trade ... but if they're to stay pirates for a thousand years, then there needs to be no way for them to get into a stable non-pirate situation. It has to devolve into pirates, even if there are points in this thousand year history where pirates get stomped in every now and then.

One of the big risks is cooption or institutionalization of deviance. What prevents the pirates from all taking deals to become privateers, getting letters of marquee from the major powers and agreeing only to attack one side or another? We want a thousand years of piracy, not a thousand years of privateers. What's stopping the formation of a pirate kingdom, or a pirate monopoly, one that stops any upstarts and forces everyone under the same banner?

Imagine civilization as a jumble of oases that are practically impossible to reach, except by sea. They were all settled hundreds of thousands of years ago, and their languages have diverged so far that they're all mutually unintelligible. At the dawn of the Age of Piracy, oceangoing ships have only just become good enough to reliably raid or invade city-states - but it's difficult to occupy a city when your army isn't technologically advanced and doesn't understand the language, so states stay small. Languages are very slow to merge, a lingua franca is slow to develop. (That part may require suspension of disbelief~)

Trade in fabric, spices, drugs, and other luxuries is profitable enough that there's a lot of traffic to pirate. Wars tend not to be large enough for pirates to become primarily privateers - they may accept a letter of marque from their home country if they're at war, but go back to piracy directly afterwards.

And I kept thinking to myself "is this going to last?" and also "life would be so easy if my brain were always like this, this is just how some people are". I wouldn't say that I'm depressed as my default state, but that week made me think that maybe there's some level of background depression that's just always there, something I've acclimated to. And for that week, it was gone.

But it only lasted a week, and then I was back to my old self. The depression and anxiety come in waves, and sometimes I can control them, but other times the triggers start piling up and it's just this downward spiral as the chemicals slosh around up there. I've trained myself to go into robot mode, to just get things done mechanically if there's no working human inside me, which is about what it's like for me on Lexapro.

I think about that week a lot.

It's bad this time, maybe as bad a depressive episode as I've had in a decade. When I was young, I used to imagine gnomes inside my head who were responsible for a bunch of levers that controlled emotions and would go into the backrooms to retrieve memories, and it took me a long time to understand that the gnomes were, in many cases, utterly incompetent, pushing down the wrong levers at the wrong moment, making me feel anxious about routine emails and causing these cascades of bad feelings over what should have been minor bumps.

I want to not be like this. I want to be the person I was when the stars aligned on that one week three years ago. That person exists, I was him, it didn't feel like losing a part of me, or like I was fundamentally altered. It felt like I had cast off my training weights and was moving around the arena at supersonic speeds. It felt like I had become the person I was always meant to be.

When I think about how unfair it is, I get more depressed. When I think about how unfounded the sadness is, I get more depressed. When I think about the things I'm not getting done because I'm depressed, I get more depressed. When I think about how other people have it worse, I get more depressed. It's like the brain gnomes have a single button that they use for everything, and that button is "I dunno, make him more sad, maybe that will help".

It'll pass. I know it'll pass, because it's passed before.

The enigmatic Alito, long regarded as the intellectual powerhouse of the Court, and a model of non-partisan consistency and integrity, may actually "lean more towards the Republican side", new evidence reveals.

Millions of Alito fans around the country are heartbroken by these revelations. "I just don't see how this can be reconciled with Alito's rigorously non-partisan jurisprudence," one young woman told me, through tears.