Sunday, April 3, 2011

It has not happened…YET

Predictability and unpredictability are both neurobiologically interesting and, with little doubt, there is a complex neural machinery, including activation of the brain’s reward system when what one has predicted has come true.

But what is it that happens when what one has predicted does not happen or, better still, has not happened over a prolonged period?

I am reminded of a prediction I made here on November 29, 2010 that Portugal, like Greece and Ireland, will seek a bail-out. My prediction was not based on any economic knowledge, of which I have none (but does anyone else?). Rather, my prediction was based on the fierce denial by the Prime Minister of Portugal at that time and by the President of the European Commission, Mr José Manuel Barroso. When politicians deny anything fiercely, there is a good chance that it will happen. That is common experience.

Belief that what they have denied strongly will happen is a sort of negative gambling, gambling on what one believes has a very high chance of happening, as opposed to true gambling when one acts in the knowledge that what one wants will not happen.

But Portugal has, to date, not sought a bail-out. So, my prediction has not come true, over a prolonged period.

Now Mr Barroso has spoken again. This time, in a reference to the opinion of many in the financial world that the possibility of a bail-out has become more probable in light of the resignation of the Prime Minister of Portugal, he has shrugged such a possibility off as unlikely given that Belgium, which has had no government for the past several months, is doing well financially, the implication being that so can Portugal, without seeking a bail-out.

That Mr. Barroso should deny that there will be a bail-out makes it that much more likely to happen, in the calculations of my brain in light of past experience.

What happens if I am wrong, if my brain miscalculated? There must be some deterrent neurotransmitter somewhere that will make me more circumspect in the future.

But, given that a politician has denied the possibility so vehemently, at present my brain calculates that this is still very likely.

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