iftttwall

Very much like the self-imposed output cut by OPEC and non-OPEC members which successfully boosted the price of crude over $50 even if global crude inventories “inexplicably” continue to hit new all time highs, one of the main reasons why commodity metal prices have seen a dramatic increase in prices over the past year has been China’s solemn vow to cut back on overcapacity and excess production. In 2016, China’s state council set out plans to eliminate 100 -150 million tonnes of steel capacity in a bid to restructure the economy from one driven by government-led infrastructure investment and exports to a more consumption and services-oriented model. Last January, the hub of China’s steel production –  the northern province of Hebei – announced it would cut output to ease pollution and help curb oversupply. Hebei said it planned to reduce steel output by 8 million metric tons in 2016, its Governor Zhang told local lawmakers, while Iron ore production would be cut by 10 million tons.

More than one year later, it appears that Governor Zhang lied about Hebei’s intentions, and according to a provincial notice by the Chinese province, it has emerged that China’s compliance with its own mandatory production cuts has been “problematic.”

A steel factory in Wu’an, Hebei province

According to Reuters, the same Hebei province, China’s biggest steel-producing area, launched a probe into steel overproduction in the city of Tangshan “amid concerns that firms have continued to raise output despite mandatory capacity cuts.“

Tangshan is the heartland of Chinese steel production. The city is home to the headquarters of the state-owned Tangsteel Group, which in 2006 merged with other companies to form Hebei Steel Group, the second-largest steel producer in the world. Located around 100 miles east of the capital Beijing, Tangshan is on the frontline of the country’s “war on pollution”, and was seventh on the list of China’s ten smoggiest cities in the first two months of this year.

Hebei was ordered by China’s central government to investigate firms in Tangshan that have “restricted but not cut production, restricted production but not actually cut emissions, and cut capacity but actually increased output,” the provincial dated March 25 said, and circulated by traders on Monday.

Cited by Reuters, an industry source based in Tangshan confirmed the veracity of the document, but said it was unclear whether the new round of inspections would have any immediate impact on production or prices. The document was issued by a special provincial policy team responsible for restructuring the steel industry. It said Hebei has already established an inspection team and Tangshan must begin its own investigations immediately.

The FT adds, that the notice, sent on Saturday, cites orders from President Xi Jinping and Zhang Gaoli, the vice-premier, for Tangshan to investigate the problem of falsely reported plant closures and rising steel output.

Tangshan produces around 90 million tonnes of steel a year, more than the whole of the United States. While China has pledged to slash steel capacity by between 100 million and 150 million tonnes over the 2016-2020 period to shore up prices and ease sector debts, there have been lingering suspicions that this may have been a ruse to push commodity prices higher, boosting cash flows of overindebted domestic producers, who employs millions of low-skilled workers and whose mass defaults could result in widespread social unrest.

The FT confirms as much:

local authorities have dragged their feet on implementing orders to shut down steel mills because doing so would potentially eliminate hundreds of thousands of jobs.

 

“The local government will always want to protect its own industries because company officials get promotions based on growth,” says Scott Laprise, the founder of steel research firm LTH Consulting. “No one gets a promotion because they lost jobs and their local economy did poorly.”

In addition to the cuts noted above, at the start of the year, Tangshan promised to shut a further 8.6 million tonnes of annual crude steel capacity in 2017. It pledged to make cuts of 40 million tonnes over the 2013-2017 period and had already shut 31.9 million tonnes by the end of last year. Hebei promised to cut crude steel capacity to less than 200 million tonnes a year in the province by the end of 2020, down from 286 million tonnes in 2013. It aims to shut 15.6 million tonnes in 2017.

However, in light of the recent revelation, it appears that local producers did not take the directives too seriously, and may have simply been stockpiling the excess production.

As Reuters adds, the Ministry of Environmental Protection has routinely named and shamed municipal governments in Hebei for failing to implement pollution rules; so far it has failed to achieve the desired result.

Of course, if one province is reneging on its production cut agreement, why not more?

That may indeed be the case: one month ago, Greenpeace said that China’s active steel capacity actually rose by 35 million tonnes in 2016 after the high-profile closure program focused mainly on shutting plants that had already been idled. Additionally, production of crude steel in 2016 actually rose about 1% from the year before, to 808m tonnes, according to preliminary data from the National Bureau of Statistics.

“The steel industry’s capacity reduction targets need to be upgraded to reductions in actual production – only then will we see real improvements in air quality,” said Lauri Myllyvirta, senior global campaigner at Greenpeace East Asia.

The problem is that just like with OPEC, there is no credible way of enforcing capacity cuts.

“Local governments will report back and simply say certain companies eliminated capacity or were closed or went bankrupt,” said LTH Consulting’s Laprise. “No one is checking what is supposedly already closed and what is actually closed.”

Excess production notwithstanding, China’s jawboning alone, and stated commitment to removing overcapacity, has managed to send prices of core commodities such as iron ore soaring as shown in the chart below.

Should it be confirmed that China was merely jawboning about removing excess supply then the appreciating commodity complex, a core driver of the global reflation trade which in recent months appears to have plateaued may soon see prices tumbling, in the process launching the latest deflationary wave to emerge out of China, and putting an end to the “global coordinated recovery” as so many analysts have called it in recent months.

It may already be happening: prices of iron ore, the key material used in steel production, tumbled fell 6.7% on Monday as inventories of the commodity at China’s ports rose. The fall brings the price to its lowest since January 10, down nearly 18% from its peak in March.

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Over the past several months President Trump has called out pretty much every major auto OEM for their efforts to move low-skilled assembly jobs to Mexico.  But absent new tariffs, it’s not terribly surprising to most people that American companies would seek to move low-skilled, labor-intensive jobs to lower cost labor markets…the math is pretty simple.

But what is somewhat surprising is how poorly the U.S. is performing versus international competition in the development of advanced manufacturing robotics.  As the Wall Street Journal points out this morning, when it comes to automating a manufacturing floor, buying robotics ‘Made in America’ isn’t even an option.

Vickers Engineering Inc. embodies the potential of American manufacturing. The New Troy, Mich., machining company supplies precision parts to clients including Toyota Motor Corp. and Volkswagen AG , and exports to Mexico and Canada. Its staff has risen fivefold and average pay has doubled over the past decade, says Chief Executive Matt Tyler.

 

What’s helping to power Vickers’s made-in-America success? Advanced Japanese and German factory equipment. When Vickers first bought industrial robots in 2006, it chose between only European and Japanese models, says Mr. Tyler, and has been adding Japanese robots ever since. “We were not aware of any American-made option.”

 

America is losing the battle to supply the kind of cutting-edge production machinery that is powering the new automated factory floor, from digital machine tools to complex packaging systems and robotic arms.

Commerce Department data show the U.S. last year ran a trade deficit of $4.1 billion in advanced “flexible manufacturing” goods with Japan, the European Union and Switzerland, which lead the industry. That is double the 2003 deficit. It was down from $7 billion in 2001, but much of the decline came from foreign equipment suppliers expanding in the U.S., not from an American comeback.

 

Meanwhile, U.S. firms are also losing market share at home, according to Germany’s VDMA industrial-machinery trade group. In 1995, they satisfied 81% of domestic demand for factory equipment. In 2015, the most-recent data, that had slipped to 63%.

 

And while the U.S. lags, China is looking to make aggressive moves in advanced manufacturing robotics and is seeking to move beyond its reliance on cheap labor to compete globally. Its ‘Made in China 2025’ strategy aims to dominate advanced manufacturing, in part through aggressive foreign acquisitions such as appliance-maker Midea Group’s purchase last year of Germany’s Kuka AG, a world leader in industrial robotics.

 

Of course, the U.S. wasn’t always the laggard in advanced manufacturing and actually dominated the space through the 1970’s when the domestic auto manufacturers were at their strongest.  But that all ended in the early 80’s as domestic auto production got cut in half and the USD strengthened.

The U.S. dominated advanced manufacturing through the 1970s, when the cutting edge was largely machine tools. Detroit was at the forefront. The world’s first industrial robot, the two-ton Unimate built in Connecticut, was installed in 1961 at a General Motors Co. plant in Trenton, N.J., according to the International Federation of Robotics, a trade group. GM and Ford Motor Co. tested robots through the 1970s. GM and Fanuc in 1982 created a joint venture.

 

In the 1980s, as U.S. manufacturing slumped, almost seven of 10 American machine-tool companies closed due to falling demand, the strong dollar and strategic miscues, according to a 1993 Rand Corp. study.

 

The decline continued this century as U.S. manufacturers outsourced more and baby boomers retired. Shrunken manufacturers demanded fewer production experts, accelerating the factory-technology decline. “In the U.S. there’s been a brain-drain in manufacturing technology,” says Alex West, manufacturing-technology analyst at London consultants IHS Markit.

Over the long-term, of course, the loss of low-skilled labor positions in the U.S. is inevitable.  Moreover, further regulations like minimum wage hikes and border tariffs will only help to ensure their long-term demise by making capital investment projects even more attractive.  But, without a presence in manufacturing robotics, all that capital is sure to flow overseas rather than into American households.

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Get ready for the future organic humans – Elon Musk is about to take transhumanism to a whole new level…

What’s Neuralink and do we still get to have sex in the future?

SpaceX and Tesla CEO Elon Musk is backing a brain-computer interface venture called Neuralink, according to The Wall Street Journal. The company, which is still in the earliest stages of existence and has no public presence whatsoever, is centered on creating devices that can be implanted in the human brain, with the eventual purpose of helping human beings merge with software and keep pace with advancements in artificial intelligence. These enhancements could improve memory or allow for more direct interfacing with computing devices. –The Verge

It’s pretty obvious what’s going on… Musk knows that the Earth is doomed – not from global warming, but because the sun’s output is decreasing and we’re going to enter into another ice age. Expect 7 Billion humans to try and cram together around the Equator, competing for increasingly limited resources – leading to civil war, death, and a huge setback in technological progress as humanity struggles to simply survive. We gotta get the fuck out of dodge.

So – Musk is taking us to Mars! He’s already mentioned nuking the atmosphere to unlock the Martian polar ice, which means all that’s left is to pool all of Earth’s resources and execute on his well thought out plans before it’s too late. Not so fast! Our feeble human bodies which are designed to live on earth, not Mars… In addition to massive cancer caused by unshielded exposure to solar wind – which the earth’s unique magnetosphere protects us from, human bodies will shrivel up in the low-gravity Martian environment, which is just 38% of earth’s.

So clearly we need radiation resistant cyborg bodies controlled by our organic brains for now, and eventually Musk will figure out how to create a positronic brain into which we will eventually upload our consciousness and live extremely long lives. Fully functional, hopefully. Plus, as Musk says, we’re going to need to be able to compete with AI – which will be able to think orders of magnitude faster than our clunky biological grey matter.

Also, consider this… If the human race becomes robotic – brains and all, we could conceivably build spaceships that would allow us to travel through vast distances of space over long periods of time. All we’d have to do is power down our brains, stow our robot bodies, then head towards the nearest habitable planet for a few hundred years at a fraction of the speed of light to see what’s there. If we find another utopian Earth-like planet, maybe we can genetically engineer biological bodies again to repopulate humanity the good ol’ fashioned way.

Then again, maybe Musk is just trying to test the limits of the simulation…

Elon Musk discusses the future of humanity, space travel, and living in a simulation… https://t.co/EHUQsOkBzP http://pic.twitter.com/ApN7CfLZTL

— ZeroPointNow (@ZeroPointNow) March 27, 2017

 

Content originally generated at iBankCoin.com * Follow on Twitter @ZeroPointNow

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Authored by Rakesh Upadhyay via OilPrice.com,

OPEC’s worries about the booming U.S. oil production have increased significantly with the big three oil companies’ interest in shale. Exxon Mobil Corp., Royal Dutch Shell Plc, and Chevron Corp., are planning $10 billion of investments in shale in 2017, a quantum jump compared to previous years. All the naysayers who doubted the longevity of the shale oil industry may have to modify their forecasts.

OPEC lost when they pumped at will as lower oil prices destroyed their finances, and now they are losing their hard-earned market share as a result of cutting production. Shell’s declaration that they can “make money in the Permian with oil at $40 a barrel, with new wells profitable at about $20 a barrel” is an indication that Shell is here to stay, whatever the price of oil.

The arrival of the big three oil companies with their loaded balance sheets is good news for the longevity of the shale industry.

The oil crash, which started in 2014, pushed more than 100 shale oil companies into bankruptcy, causing default on at least $70 billion of debt, according to The Economist. Even the ones that survived haven’t been very profitable, according to Bloomberg, which said that the top 60 listed E&P firms have “burned up cash for 34 of the last 40 quarters”.

Therefore, during the downturn, the smaller players had to slow down their operations, but this will not be the case with the big three.

“Big Oil is cash-flow positive, so they can take a longer-term view,’’ said Bryan Sheffield, the billionaire third-generation oilman who heads Parsley Energy Inc. “You’re going to see them investing more in shale,” reports Bloomberg.

The majors are attempting to further improve the economics of operation. Shell said that its cost per well has been reduced to $5.5 million, a 60 percent drop from 2013. Instead of drilling a single well per pad, which was the norm, Shell is now drilling five wells per pad, 20 feet apart, which saves money previously spent on moving rigs from site to site.

Shell is not the only one—Chevron expects its shale production to increase 30% every year for the next decade. Similarly, Exxon plans to allocate one-third of its drilling budget this year to shale, and it expects to quadruple its shale output by 2025.  

“The arrival of Big Oil is very significant for shale,” said Deborah Byers, U.S. energy leader at consultant Ernst & Young in Houston. “It marries a great geological resource with a very strong balance sheet.”

$30 billion has been spent on land acquisitions in the Permian basin since mid-2016, which is a favorite among oil companies.

Considering the new projects and the resurgent shale boom, Goldman Sachs expects oil output to increase by 1 million barrels a day year-on-year. The outcome is an oversupply in the next couple of years.

"2017-19 is likely to see the largest increase in mega projects' production in history, as the record 2011-13 capex commitment yields fruit," the U.S. investment bank said in a research note on Tuesday, reports Reuters.

The U.S. Energy Information Administration expects the U.S. oil production to top 10 million barrels by December 2018, a level only surpassed in October and November 1970.

OPEC is running out of options.

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In what is emerging as the latest headache for Donald Trump, a state-run Russian bank which has been under U.S. economic sanctions since 2014 disclosed on Monday that its executives had met Jared Kushner, Trump’s son-in-law and key policy adviser, during the 2016 election campaign. As reported previously, Kushner has been asked to discuss the contact, and a meeting during the same period with the Russian ambassador, with a Senate committee probing Russia’s alleged interference in the 2016 election.

Executives of Russian state development bank Vnesheconombank (VEB) had talks with Kushner during a bank roadshow in 2016 when it was preparing a new strategy, the bank said as reported by Reuters. “As part of the preparation of the new strategy, executives of Vnesheconombank met with representatives of leading financial institutes in Europe, Asia and America multiple times during 2016,” VEB said in an emailed statement.

It said roadshow meetings took place “with a number of representatives of the largest banks and business establishments of the United States, including Jared Kushner, the head of Kushner Companies.”

VEB declined to say where the meetings took place or the dates. U.S. officials said that after meeting with Russian Kislyak at Trump Tower last December, a meeting also attended by Flynn, Kushner met later in December with Sergei Gorkov, the CEO of Vnesheconombank. White House spokeswoman Hope Hicks confirmed the meetings.

That said, simply meeting with representatives of a U.S.-sanctioned entity is not a violation of sanctions or against the law, although we doubt the media will focus on that nuance.

A bigger circumstantial problem may be that Evgeny Buryakov, 41, a Russian citizen who worked at Vnesheconombank and whom U.S. authorities accused of posing as a banker while participating in a New York spy ring, pleaded guilty to a criminal conspiracy charge on Friday. Buryakov admitted in federal court in Manhattan to acting as an agent for the Russian government without notifying U.S. authorities. He was sentenced to 30 months in US prison.

Additionally, Gorkov, the bank’s chairman, graduated in 1994 from the Academy of the Federal Security Service of Russia, the Russian school for intelligence officials, i.e., spies. He later worked for the now-defunct Russian oil giant Yukos and state-controlled Sberbank before taking the top job at VEB. As the WSJ reminds us, the plunge in oil prices and Western sanctions over the Ukraine crisis had  pushed the bank into financial trouble, forcing the Russian government to undertake a bailout.

The White House said Kushner was simply doing his job by holding this meeting, although Obama sanctioned the bank in 2014 after the Ukraine coup and subsequent hostilities with Russia, and contacts with Russia have landed other Trump associates in hot water.

Earlier on Monday, White House spokesman Sean Spicer told reporters that Kushner is willing to testify to the Senate Intelligence Committee chaired by U.S. Senator Richard Burr, a North Carolina Republican. “Throughout the campaign and the transition, Jared served as the official primary point of contact with foreign governments and officials … and so, given this role, he volunteered to speak with Chairman Burr’s committee, but has not received any confirmation regarding a time for a meeting,” Spicer told reporters at his daily briefing. The Republican and Democratic leaders of the Senate panel also said Kushner had agreed to be interviewed.

Allegations by U.S. intelligence agencies that Russian actors were behind hacking of senior Democratic Party operatives and spreading disinformation linger over Trump’s young presidency. Democrats charge the Russians wanted to tilt the election toward the Republican, a claim dismissed by Trump. Russia denies the allegations.

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Authored by Mike Shedlock via MishTalk.com,

There have been 11 recessions and 11 recoveries since 1949.

The current recovery is the slowest recovery since 1949 and closing in on the becoming longest.

Growth since the 2nd quarter of 2009 is a mere 2.1%. The Wall Street Journal asks Is Two Percent as Good as It Gets?

“The growth seen during the recovery might, for a while, be as good as it gets,” the Federal Reserve Bank of San Francisco’s John Fernald, Stanford University’s Robert Hall, Harvard University’s James Stock, and Princeton University’s Mark Watson said in a study to be presented among Brookings Papers on Economic Activity.

Inquiring minds may wish to download the Brookings’ report entitled Disappointing Recovery of Output After 2009 but I found it a waste of time.

Okun’s Law 

The report was mostly mathematical gibberish based on Okun’s Law.

Okun’s law (named after Arthur Melvin Okun, who proposed the relationship in 1962) is an empirically observed relationship between unemployment and losses in a country’s production. The “gap version” states that for every 1% increase in the unemployment rate, a country’s GDP will be roughly an additional 2% lower than its potential GDP. The “difference version” describes the relationship between quarterly changes in unemployment and quarterly changes in real GDP. The stability and usefulness of the law has been disputed.

Clearly, Okun’s Law is at least as useless as any widely believed economic law, which is to say totally useless.

The supporting paper consists of 90 pages of largely unintelligible garbage such as the following.

Commendable Effort

The Wall Street Journal managed to condense 90 pages of nonsense down to 2 pages of nonsense. That’s a highly commendable effort, and the best one could reasonably expect.

Here’s the conclusion: “The causes aren’t entirely clear.”

I searched the 90-page report for the word “debt“. Care to guess the number of hits? I bet you can: zero.

Modern Day Snake Oil

I was discussing economic indicators with Pater Tenebrarum at the Acting Man Blog a couple of days ago. He pinged me with the correct takeaway.

Economic forecasting is not a science, and it is actually not the task of economic science to make forecasts (contrary to what is commonly asserted). Forecasting is akin to the task of the historian. Mises called speculators “historians of the future”.

 

Economic laws only play a role insofar as they can be used as constraints for a forecast. The problem is that all these models simply look at the data of economic history, at statistical series that always turn tail “unexpectedly”, driven by human action.

 

All these mathematical models are complete humbug. It is modern-day snake oil.

Still, it's pretty clear that the market cares nothing for top-down or bottom-up forecasts of economic activity…

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In case revolutionizing the transportation and energy industries while colonizing Mars wasn’t enough of a challenge for Elon Musk (or perhaps taxpayer subsidies for Musk’s ventures in those fields have dried up) in his latest venture the billionaire entrepreneur now “wants to merge computers with human brains to help people keep up with machines.” Specifically, the WSJ has uncovered that Musk has launched another company called Neuralink, which is pursuing what Musk calls “neural lace” technology, which is shorthand for a brain-computer interface and consists of implanting tiny brain electrodes that will one day be able upload and download thoughts.

Think the 2014 Johnny Depp movie Transcendence.

Musk has taken an active role setting up the California-based company and may play a significant leadership role, according to people briefed on Neuralink’s plans, a bold step for a father of five who already runs two technologically complex businesses. While Musk did not comment on the story, Max Hodak, who said he is a “member of the founding team,” confirmed not only the company’s existence but also Musk’s involvement. “He described the company as “embryonic” and said plans are still in flux but declined to provide additional details. Mr. Hodak previously founded Transcriptic, a startup that provides robotic lab services accessible over the internet.”

Investors in Musk’s current ventures may not be particularly pleased to learn that the inventor has found yet another distraction from his already ambitious, and in the case of Tesla, lofty and overvalued goals. Currently, the 45-year-old Paypal founder splits his time between Tesla, which is under pressure to deliver its $35,000 sedan on time, and SpaceX, which aims to launch a satellite-internet business and a rocket that can bring humans to Mars. He is also pushing development of a super high-speed train called Hyperloop. And, the WSJ notes, somewhere in his packed schedule, he has found time to start a neuroscience company that plans to develop cranial computers, most likely to treat intractable brain diseases first, but later to help humanity avoid subjugation at the hands of intelligent machines.

Musk had previously hinted at the existence of Neuralink a few times over the last six months or so. As the Verge notes, recently Musk told a crowd in Dubai, “Over time I think we will probably see a closer merger of biological intelligence and digital intelligence.” He added that “it’s mostly about the bandwidth, the speed of the connection between your brain and the digital version of yourself, particularly output.” On Twitter, Musk has responded to inquiring fans about his progress on the so-called “neural lace,” which is sci-fi shorthand for a brain-computer interface humans could use to improve themselves.

“If you assume any rate of advancement in [artificial intelligence], we will be left behind by a lot,” he said at a conference last June. The solution he proposed was a “direct cortical interface”—essentially a layer of artificial intelligence inside the brain—that could enable humans to reach higher levels of function.

Mr. Musk has discussed financing Neuralink primarily himself, including with capital borrowed against equity in his other companies, according to a person briefed on the plans.

 

Neuralink has also discussed a possible investment from Founders Fund, the venture firm started by Peter Thiel, with whom Mr. Musk co-founded payments company PayPal, according to people familiar with the matter.

For now, the types of brain-computer interfaces contemplated by Neuralink exist only in science fiction. In the medical realm, electrode arrays and other implants have been used to help ameliorate the effects of Parkinson’s, epilepsy, and other neurodegenerative diseases. However, it goes without saying that very few people have complex implants placed inside their skulls, while the number of patients with very basic stimulating devices number only in the tens of thousands. This is partly because it is incredibly dangerous and invasive to operate on the human brain, and only those who have exhausted every other medical option choose to undergo such surgery as a last resort.

Still, as the Verge adds, this has not stopped a surge in Silicon Valley interest from tech industry futurists who are interested in accelerating the advancement of these types of far-off ideas. Kernel, a startup created by Braintree co-founder Bryan Johnson, is funding medical research out of the University of Southern California to try and enhance human cognition. With more than $100 million of Johnson’s own money — the entrepreneur sold Braintree to PayPal for around $800 million in 2013 — Kernel and its growing team of neuroscientists and software engineers are working toward reversing the effects of neurodegenerative diseases and, eventually, making our brains faster and smarter and more wired.

“We know if we put a chip in the brain and release electrical signals, that we can ameliorate symptoms of Parkinson’s,” Johnson told The Verge in an interview late last year. (Johnson also confirmed Musk’s involvement with Neuralink.) “This has been done for spinal cord pain, obesity, anorexia… what hasn’t been done is the reading and writing of neural code.” Johnson says Kernel’s goal is to “work with the brain the same way we work with other complex biological systems like biology and genetics.”

The verge notes that Kernel is upfront about the years of medical research necessary to better understand the human brain and pioneer new surgery techniques, software methods, and implant devices that could make a consumer brain-computer interface a reality. The Wall Street Journal says Neuralink was founded as a medical research company in California last July, which bolsters the idea that Musk will follow a similar route as Johnson and Kernel.

Meanwhile, Musk appears to be aggressively growing the new venture.

In recent weeks, Neuralink has reportedly hired leading academics in the field, according to another person familiar with the matter. They include Vanessa Tolosa, an engineer at the Lawrence Livermore National Laboratory and an expert in flexible electrodes; Philip Sabes, a professor at the University of California in San Francisco, who studies how the brain controls movement; and Timothy Gardner, a professor at Boston University who is known for implanting tiny electrodes in the brains of finches to study how the birds sing.

It is unclear what sorts of products Neuralink might create, but people who have had discussions with the company describe a strategy similar to SpaceX and Tesla, where Mr. Musk developed new rocket and electric-car technologies, proved they work, and is now using them to pursue more ambitious projects. The company’s first products could be advanced implants to treat intractable brain disorders like epilepsy or major depression, a market worth billions of dollars. Such implants would build on simpler electrodes already used to treat brain disorders like Parkinson’s disease.

If Neuralink can prove the safety and efficacy of its technology and receive government approval, perhaps it then could move on to cosmetic brain surgeries to enhance cognitive function, these people say. Mr. Musk alluded to this possibility in his comments last June, describing how humans struggle to process and generate information as quickly as they absorb it.

Kernel’s Johnson said he has spoken Mr. Musk and that both companies want to build better neural interfaces, first to attack big diseases, and then to expand human potential.

They are not alone: Facebook has posted job ads for “brain-computer interface engineers” and other neuroscientists at its new secret projects division. And the Defense Advanced Research Projects Agency is investing $60 million over four years to develop implantable neural interface technology.

Of course, loading up one’s consciousness into a computer, which is the ultimate goal of such “neural lace” ventures will not happen tomorrow. The hurdles involved in developing these devices are immense. Neuroscience researchers say we have very limited understanding about how the neurons in the human brain communicate, and our methods for collecting data on those neurons is rudimentary. Then there’s the idea of people volunteering to have electronics placed inside their heads.

“People are only going to be amenable to the idea [of an implant] if they have a very serious medical condition they might get help with,” Blake Richards, a neuroscientist and assistant professor and the University of Toronto, told The Verge in an interview earlier this year. “Most healthy individuals are uncomfortable with the idea of having a doctor crack open their skull.”

At the end of the day, perhaps the latest Musk venture is nothing more than a vanity project: invest enough money into a project which if successful will allow if not Musk, then his mind, to live forever.  We wish him all the best in this latest endeavor, but wonder how much of this particular pet project is funded directly and indirectly by taxpayers.

Meanwhile, questions over Musk’s own, carbon-based “bandwidth” will only grow. Tesla is building the largest battery factory on the planet to supply its forthcoming Model 3 electric vehicle, and it will need to produce hundreds of thousands of cars to meet its goal and justify its lofty market capitalization, which is approaching that of Ford. SpaceX has struggled to launch rockets fast enough to send satellites into orbit for its customers. Ultimately it wants to launch an internet-access business powered by more than 4,000 low-earth orbiting satellites, ferry space tourists to the moon and then bring astronauts to Mars. An unexpected project to enable interfacing with computers and ultimately, immortality, may not be what Musk needs to win over a rising tide of skeptics.

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