From Russia to US to brain chips & much more
This week we explore Russia's economic bounce-back & record corporate bond sales in US. We explore "brain-chips" & ponder on potential snooping on AI innovations. Finally, is Tibet splitting up?
Do sanctions work? Russia seems to suggest “no”
Russian banks experienced unprecedented profits in 2023, driven by a surge in applications for government-subsidized mortgages and increased financing for acquiring assets divested by Western companies exiting the country.
Despite stringent international sanctions imposed in response to Russia's full-scale invasion of Ukraine, the banking sector recorded Rbs3.3tn ($37bn) in profits for 2023, marking a remarkable 16x increase from the previous year.
One of the driving forces behind Russia's banking success lies in the rush to secure government-subsidized mortgages. This strategy not only buoyed the real estate sector but also injected vitality into the overall economy.
Simultaneously, a boom in financing to acquire assets being sold by Western companies exiting the country provided a significant boost to the banking industry.
This surge in profits serves as a testament to the relative resilience of the Russian economy, withstanding efforts from the US and Europe to inflict damage through trade restrictions and other punitive measures.
Even in the face of such challenges, the International Monetary Fund (IMF) revised its forecast on Tuesday, anticipating a 2.6 percent growth in Russia's economy for the current year, twice the rate anticipated just a few months earlier in October.
The unforeseen success of Russia's financial sector and the country's overall economic resilience raise important questions for the international community. Are sanctions an effective tool in influencing a nation's behavior, or do they inadvertently strengthen its resolve?
A chip implanted in the human brain!
Elon Musk announced on January 29, 2024, via X / Twitter, that Neuralink achieved a significant milestone by successfully implanting its brain chip, the "N1," in a human for the first time. Musk conveyed that the patient is in good recovery, emphasizing the chip's ability to register signals from neurons, the nerve cells responsible for transmitting information.
The N1 chip, approximately the size of a quarter, features multiple "threads" embedded in brain tissue, each equipped with over a dozen electrodes.
Musk highlighted the delicate procedure involving the insertion of threads into brain tissue to sit closely to neurons and relay their electrical signals. This intricate surgery is facilitated by Neuralink's specialized robot, the "R1," which can complete the thread insertion in a fraction of a second using needles and threads thinner than human hair.
The robot navigates with precision to avoid sensitive parts of the vascular system, reducing the risk of brain bleeds, even accounting for the slight movement of the brain within the immobile skull.
The ultimate goal of Neuralink's innovation lies in reading neural signals and transmitting them to external devices, holding promise for restoring functions in individuals with disabilities.
While existing technology, exemplified by Blackrock Neurotech's Utah Array, has demonstrated success in this domain, Neuralink's flexible threads and increased data-reading capabilities mark potential advancements.
Neuralink received approval from the FDA for its test in May 2022.
In the competitive landscape of brain-computer interface companies, Neuralink contends with counterparts such as Synchron, known for its stent-like device implanted in the jugular vein atop the patient's brain, and Precision Neuroscience, which temporarily implanted its microelectrode array in six patients to gather test data.
The industry anticipates Neuralink's potential breakthroughs to bring about a paradigm shift akin to moving from dial-up internet to broadband, according to experts.
Record sales of US Corporate Bonds
Corporate bond issuance in the US hit a record high for January, as blue-chip firms seized the opportunity to borrow cheaply in the long-term market.
According to data from Refinitiv, as of 28th Jan, companies sold $188.57 billion of investment-grade debt in January, surpassing the previous record of about $175 billion set in 2017.
As per experts, the market could see another $11.43 billion in sales before the month ended, which, if happens, would see $200 billion in sales in January.
Some of the issuers on Monday included IBM, Capital One Financial Corp., and Kinder Morgan Inc., who took advantage of the lower yields on longer-dated bonds.
The average yield on a 10-year or longer corporate bond fell to 5.44% on Friday, down from 6.6% in mid-October, according to Bloomberg Barclays index data.
This has made some investors eager to buy long-term debt and lock in yields before they decline further.
Goldman Sachs expects the issuance pace to remain strong in the first half of the year, before slowing down in the second half, as companies brace for the uncertainty of the US presidential elections in November.
Snooping in to monitor innovations
The United States is urging cloud service providers, including industry giants like Amazon.com Inc. and Microsoft Corp., to proactively scrutinize and disclose information about foreign clients engaged in the development of artificial intelligence applications on their platforms.
Under the proposal put forth by the Biden administration, these companies would be mandated to disclose the names and IP addresses of their foreign customers.
If enacted, these requirements could serve as a means for Washington to restrict Chinese firms' access to the essential data centers and servers crucial for the training and hosting of AI applications.
Concerns among U.S. cloud providers have arisen, fearing that unilateral restrictions on their interactions with overseas users, without corresponding measures by allied nations, may put American firms at a competitive disadvantage.
Secretary of Commerce of the US mentioned that her team is actively addressing national security concerns stemming from AI development, with a focus likely directed towards companies based in China. This effort underscores the broader commitment to safeguarding against potential threats posed by the advancement of artificial intelligence.
Plate under Tibet splitting up?
The Himalayas are the result of a geologic clash between the Indian and Eurasian tectonic plates. This clash started about 60 million years ago, when India was an island that collided with Eurasia, creating the highest mountains on Earth.
There are different theories about how the Indian Plate interacts with the Eurasian Plate.
Some think the Indian Plate resists sinking into the mantle and keeps sliding under Tibet.
Others think the front edge of the Indian Plate folds like a carpet, making it easier for the lower part of the plate to descend into the depths.
A new study suggests another possibility - part of the Indian Plate is splitting as it slides under the Eurasian Plate, with the heavier bottom part separating from the top.
The study also finds evidence of a vertical crack, or tear, at the boundary between the split section of the plate and its intact neighbor.
The tear may have implications for earthquake risks in Tibet today. A deep crack in the Tibetan Plateau called the Cona-Sangri rift is above the tear—a possible sign that the disturbance in the Indian Plate’s lower part might affect the surface.