The Neurology of Bubbles: The Case of Cyprus

The Neurology of Bubbles: The Case of Cyprus

The new patient was a famous artist and the hospital staff who knew about art were half in awe of him, half dismayed to see his flaccid left arm and his drooping left face. The stroke had ravaged the right side of his brain.

So when, in his occupational therapy session a week or two later, he asked for paper and paints and started to paint again, it was with both excitement and trepidation that the staff waited to see whether his art had survived the damage to his brain.

A beautiful flower began to emerge, a little shaky perhaps, but unmistakable in its spare, deft style so characteristic of the great painter. We were thrilled. But then he stopped, put his brush down and gave a crooked smile of satisfaction.

Our small group waited, expectantly, for him to resume. After a while, someone asked 'are you going to finish it?' He looked at her askance - 'it is finished', he said. We all stared at the beautiful flower, perfectly formed and delicately coloured, and a chill ran over us. - It was only a half-flower, severed down the middle as if torn in half. Realisation slowly dawned.

The artist was suffering from a neurological condition called 'neglect' - where the brain ceases to be aware of one whole half of the world, usually the left side. It's not that they don't 'look' to the left, it's not that the left side of their eyes have clouded - their brains have lost the ability to conceive of the existence of the left side of space. To the artist, his flower looked totally complete, because for him, there was no left side of space.

What has this got to do with Cyprus?

Cyprus's banking sector is seven and a half times the size of the Cypriot economy. This enormous bubble of money is threatening to burst and bring down not only Cyprus, but the whole Euro project. We had equivalent enormous bubbles across the world before the 2007 financial meltdown, and through them all ran a common neurological thread which my ex-patient 'neglect' artist can help explain.

We all live in a 'bubble' which is defined by our very limited capacity for attention. We cannot be aware of something unless we attend to it, and our attention is like a narrow beam of torch light which roams about a vast darkness of information and events.

Many of you will have seen the famous video where you are asked to count the ball passes of one of two teams, who are each passing the ball among themselves. As your attention focuses on the effort of counting the passes of just one team while ignoring the distraction of the other, a person in a gorilla suit walks through the players, stops in the middle and beats his chest, then walks off the other side. When you stop the video, and ask the watchers did they notice anything, most look at you strangely and say no. You then show them the same video, but don't ask them to count the passes, and they gasp with disbelief at their blindness.

This is called 'inattentional blindness' and every minute of every day we suffer from this because of the limited power of our torchlight of attention. If we attended to everything, we would go mad - we have to select a small set of information to attend to, ie what is relevant to our current goal - like counting the passes in the video for instance.

My artist patient was stuck in such a bubble because his torchlight had been cut in half: the left half of the world ceased to exist for him because our conscious world is our attention.

A similar type of 'neglect' underlies great bubbles like the inflated Cyprus banking sector and the disastrous financial phenomena such as the mortgage-backed securities of the pre 2007 crash.

Everyone in these developed countries - not just the bankers, regulators and politicians - suffered a sort of neglect. Ordinary Joe Soaps who ran up eye-watering credit-card debt were as much victims of this neurological drama as were the high-stakes financial leaders with their multi-million dollar bonuses. For all of them, their attentional torchlights were permanently focused on future rewards, meaning that they were actually unable to refocus their attention on risk and potential threat.

Being in a financial bubble, in other words, is like suffering from neglect following a stroke. One side of the world - in the financial case, risk and loss - ceases to exist and so cannot be accessed by our consciousness, leaving us blind, exposed and in world financial crisis. Even our memories of previous crisis cannot easily be accessed by our conscious minds because attention is the gateway to our memory.

The problem is, a bear market has the opposite effect, pulling us into a different sort of bubble, where all we can see is risk and threat. In such an attentional bubble, we find it difficult to conceive of future reward and so hunker down, victims of our limited attention, which can see only risk and cannot remember the good times.

Our great artist patient recovered, but not completely - there was a continued ragged fading-away at the far left of any of his paintings - and in this recession of all recessions, perhaps something similar will apply to the poor Cypriots, and maybe to all of us.

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