Spend any time around finance people, and you start to worry about things. Unsustainable trends, ruinous policies, global economic collapse. I think it’s always like this— it’s a career that attracts and rewards worriers. But something’s different in 2012 finance: there’s a growing whiff of sheer, unadulterated panic in peoples’ honest evaluations. Very smart, very serious people are talking frankly of scenarios with real-world consequences that years earlier would have been unthinkable. There’s even a subgenre of blogs which can only be called “economic dispair porn” – and it’s hard to say exactly why they’re more unreasonable than those preaching calm and a slow-but-steady recovery.
Everybody who’s paying attention knows things need to change– that we’re at the wrong end of multiple unsustainable trends. Are we looking at a recession slowly leading into a recovery? A long-term recession characterized by stagflation as the new normal? A worldwide economic disaster? It’s hard to say. Nobody knows. All are real possibilities, though I think the Krugmans of the world are ignoring our structural problems and the magnitude of the pain required to solve them. What’s clear is we’re in a tight place, economically speaking, with a lot of risk and few good options.
Why do bad things happen to good economies? (Of Austrians, Keynesians, and the path of least resistance)
How’d we get into this mess? A lot of people blame greedy bankers, crony capitalism, partisan politics. There’s some truth in each of these, but one of the biggest factors is how we approach economic cycles. Keynesian economics suggests the healthiest way to handle cycles is to put money aside during the ‘up’ parts of the cycle, and spend these savings during the ‘down’ parts to smooth things out. It seems intuitive. Austrian economics, on the other hand, suggests that any attempt to subvert natural economic cycles is ultimately unhealthy, and we need to just tough out the recessions— moreover, the ‘down’ part of the cycle is actually the most healthy, since economic pain is the only way to cleanse an economy of bad investment and structural problems.
Economists have spent a lot of air and ink debating the relative merits of each (note: link is to an econ rap battle). But, ironically, since 1987 we’ve done neither: we’ve injected liquidity — banker talk for “thrown money at the problem” — whenever things slow down, as the Keynesians suggest, but we haven’t been setting aside money in the good times. So for 25 years we’ve taken the path of least resistance and financed our way out of short-term recessions by taking on more long-term debt, enjoying the fruits of economic growth while kicking the can down the road. This can go on… until it can’t. The music may be stopping, the party winding down, and the hangover is starting to pound.
The domino effect (and, “at least we’re not Greece”)
The larger issue here is that most nations are in roughly the same fiscal position as the US, or worse. Greece went pseudo-bankrupt and is essentially sliding into ‘failed nation’ status; Spain is likely close behind. Ireland, Italy, Portugal, and really most of the Eurozone is in pretty sad shape, burdened with inflexible, unworkable policy and mountains of debt. Japan is stable but almost completely underwater, India is staggering, and though China seems to have different economic problems than those in the West, it may be in no better shape. Most countries export to the US, so a slowdown here means slowdowns elsewhere. The specific watchword here is “contagion”, which means since everyones’ economies are linked to everyone else’s, a default (bankruptcy) of one country or major bank could interrupt cashflow to its trading partners enough to cause a chain reaction of defaults. The more defaults there are, the more likely this is to cause even more defaults. Here’s a simple video on the topic.
Contagion is a serious concern, the cause of the government’s oft-maligned emergency TARP loans and of the EU’s special dealings with Greece. This situation is further complicated by the existence of hundreds of trillions of dollars of CDOs and CDSes (JPMorgan alone has a $70 trillion derivative exposure, a figure higher than world GDP, though nobody–JPMorgan included–knows quite what this means). These are essentially hugely leveraged bets that countries won’t default on their sovereign debt, bets that will explode in the world’s face in a fiery ball of leveraged pain and contagious uncertainty if a country like Greece does technically default on its debt.
Caveats (and their caveats…)
Not everything is certain gloom and doom, and there are some particular bright spots– American technology and startups, singularity trends, and the small-but-growing China export market could all help gloss over a lot of structural dysfunction. Reasonable people can be hopeful. But these bright spots have caveats— Thiel makes a solid case for pessimism about technological progress, there are strong bear arguments on Chinese growth and stability, and the Chinese consumer market is turning out a lot smaller than expected anyway. We’re probably going to need to fix our problems the old-fashioned way– which translated, means we should expect to experience pain sufficient to compel us to fix the structural problems that got us into this mess, before things turn good again. And given how entrenched the problems are and how long we’ve deferred said reckoning, it’s going to be significant.
All this adds up to a rather scary prediction. I hope I’m wrong, and I wish there was more I could do to help.
What rich people are worrying about (the smart ones, at least…)
This brings us back to the point about worrying: let’s assume there’s a non-trivial chance that multiple unsustainable trends are going to come due in the next few years, that a lot of wealth is going to be destroyed, that the ‘economic pie’ is going to shrink drastically. The problem people with money face, then, is to find the pieces of the pie that will shrink the least. To make sure the wealth that’s destroyed is other peoples’. It’s not pretty, but economic contractions never are.
Pessimism doesn’t make hay; what to do?
There are so many rich economic pessimists so desperate for insulation against systemic risk that reasonably-priced hedges are few and far between. Gold, the standard hedge against fiscal uncertainty, has quadrupled in price since 2000. Farmland in the Midwest jumped ~25% in the past year after strong gains the past decade. The ol’ “hide your cash in your mattress” strategy isn’t very good when governments can simply inflate away its value. In other words, if you’re worried about finding a relatively disaster-proof way to store your wealth, you’re going to have to either pay a huge premium for being late to the party, or get a little creative and off-the-beaten-path.
A key problem here is the economic worth of most everything is linked to the level of economic activity. A hotel’s value, for instance, depends on how many people can afford to stay there. Copper’s value depends on lots of people wanting to make stuff with it. A vacation beach house’s value depends on there being people with enough disposable income for luxuries. So the ideal hedge would be something with inelastic or countercyclical demand, yet something that wouldn’t lose value if the financial apocalypse failed to materialize, or if singularity trends kept apace. Even better if it was a company or property that generated income under all such scenarios. And of course, you wouldn’t want to put all your eggs in one basket. It’s possible that something like the Vice Fund could be viable, but I have to say I think there are much better investments out there. We just have to find them. Or make them.
 Furthermore, the US’s dirty little secret is that we’ve slowly, imperceptibly drifted away from a market-driven economy and toward a government-driven economy, which further distorts natural economic cycles. Government spending accounts for ~40% of GDP, and government influence in the economy, in forms ranging from egalitarian employment mandates, security administration at airports, to interest rate manipulation, is everywhere. (On the Fed’s role, my dad has noted the irony “that we are probably in the mess we’re in because a follower of Ayn Rand [Greenspan] decided that central planning was better than the markets – as long has HE was doing the planning”.) Capitalism is never pure, and in modern societies there’s always some element of central planning. But our government bureaucracy’s influence on what happens inside our borders is more pervasive and less accountable than strictly necessary, and its sheer size is burdensome… especially during downturns, when the private sector sheds its least efficient jobs but the government doesn’t. (Or would be, if we weren’t just borrowing the money to pay for it.)
– One pernicious issue is how many elements of society have outsourced the funding of their financial obligations onto continued growth. See, e.g., CalSTRS, or the pension fund for the California State Teachers’ Retirement System. At 10% growth, it fully funds all its pensions. At 7.5% growth, it’s underfunded by $64.5 billion. At 1-2% growth… things look pretty grim for retired teachers.
We can’t just not shrink, we can’t just grow a little; we need to grow a LOT just to keep our financial obligations from blowing up. It didn’t have to be this way, but it is.
– David Brooks has a reasonable op-ed on structural problems, and how the same playbook that got us into this mess won’t get us out.
– The elephant in the room in these economic debates is whether the growth of the middle class in the last 60 years is a ‘new normal’ or just a temporary aberration. As Taibbi worries,
I think people are going to realize what a blip on the radar American-style democracy in the 20th century was. A big middle class that had a huge powerbase, financial interests, bosses giving benefits… all those things. It’s just a little blip in history. For the most part, concentrated wealth will make all the decisions and everybody else is dictated to.
Edit, 2-3-13: I highly recommend this fantastic bearish writeup on Zerohedge. Entertaining and enlightening. (Warning: it is long.)
The question of whether the official government inflation numbers are right (currently 2-3%, depending on inclusion of food and energy) is really important. It would be hard to understate how important this is. But it’s considered a fringe topic, a settled issue. Here’s Krugman scoffing at the doubters.
We measure inflation with the Consumer Price Index, which is basically an aggregate, pared down cost-of-living metric. How much it costs, month by month, to buy life’s essentials for the average consumer. If this ‘basket of representative goods and services’ goes up, we call that inflation. As a cost-of-living metric it’s pretty good, and as Krugman notes, alternate approaches turn up about the same numbers.
But ‘how far does a dollar go for the average consumer?’ and ‘how much a dollar is worth compared to everything else?’ are very different questions. Here’s my take:
When we get down to it, everyone has their own inflation rate, based on what they want and need to buy. Averages here miss a lot of trends. One trend that comes to mind is the current economic polarization and concentration of wealth. Let’s keep in mind, dollars are a commodity like any other, and inflation is just supply-and-demand. It happens when too many dollars are chasing too few goods and services. In 2012, there’s a huge oversupply of dollars held by rich people and investors; stuff that these people want to buy (investments, high-end and luxury goods and services) is getting bid way up. On the other hand, in the lower tiers of society, there isn’t an oversupply of dollars. Official inflation rates are calculated based on cost of living for the majority of people— NOT, e.g., the cost of what people who hold most of the dollars want to buy. It’s an important distinction: in short, we look at inflation from the average person’s perspective, whereas we should look at it from the average dollar’s perspective.
I’m sure this alternately weighted, dollar-centric rate of inflation would be much higher than the official CPI. How could we calculate it reliably? I’m not sure. But you could make a lot of money if you figure out how.
 Walmart-style globalization, Procter & Gamble-style manufacturing efficiency gains, and Moore’s Law-type exponential improvement should all be strongly blanket deflationary factors– that is, making peoples’ dollars go further. That such deflation tends to be narrow (only a few things get cheaper, while most keep inflating) suggests to me these factors are effectively subsidizing inflation.
 Some of this inflation in investment commodities is driven by the current extreme levels of uncertainty, but some isn’t. One could presumably quantify some of this by looking at option premiums. Market analysis of dollar-denominated commodities gets really complex when there may be hidden inflation, however, and government-numbers-derived tools like TIPS are pretty worthless qua tools.
 The money supply may be said to be one of many tools the powerful use to extract wealth from the less powerful. If there is indeed a currency crisis ahead, involving inflationary and deflationary shocks, a reasonable guide for their timing would be to look at what would benefit the central bankers’ balance sheets the most.
– Is this driven by an oversupply of currency or of credit? Probably both, e.g., “Some insights from my visit to the ECB“. And due to many people being desperate to hold anything but currency (ABC).
– The US is creating a lot of currency, but this is definitely not limited to the US dollar. Every other government in the world has two incentives to print money: more competitive exports, and free money. Trends like this persist until they can’t.
– People think of inflation and deflation as opposites; I would say they’re cousins, in that they’re both products of and drivers of volatility. Both erode the leverage of the tools we use to manage our fiscal affairs, and I suspect both could happen in short succession, particularly with a whipsawing money supply– or even at the same time, in different sectors of our economy (just like different inflation rates).
– Why does this matter? Aside from skewing all economic statistics, this adds a great deal of volatility to anything connected with currency. Back in 2005 people scoffed at the possibility of a housing bust, pointing at a variety of statistics (all of which looked very solid and reasonable at the time). Now, people are scoffing at the possibility of a currency crisis, pointing mainly at the stability of the CPI. I don’t know what the future holds, but I know that’s not a good argument.
Additional References (but, caveat lector):
I camped over at the Occupy LA protest a few weeks ago. It was fun– most of the people seemed thoughtful and genuine and I sympathize with a lot of their concerns. I have some friends who are “occupying” as I write this. People are mad, and I get it.
I also have friends and family who work in the greater investment community. Their opinions of OWS are all over the map: some welcome the protests if they can bring about more market transparency and accountability, others are quite frustrated by the protesters’ general lack understanding, sophistication or solutions. To put (my) words to their feelings: things aren’t perfect, but many of the protesters’ demands betray a striking lack of comprehension about how the market works.
I’m not here to pick a winner. I am here to say that this dispute hides a much bigger problem, one independent from any issue of corruption and one that will unravel the fabric of society if we sleepwalk into it. Settle in, get a cup of coffee, and I’ll explain why.
I’m often pleasantly surprised by how much smart laypeople are interested in physics. Regardless of their educational background, peoples’ ears perk up when the discussion turns to how weird quantum mechanics is, issues in contemporary physics, or even odd physics thought experiments. I’d go so far as to say, once we cut through the jargon, physics is one of the most inherently interesting fields, because
(1) physics is ultimately the foundation for basically everything,
(2) when we get down to details it’s pretty darn weird, and
(3) while most fields have moved away from metaphysical questions and toward inaccessible problems of complex emergence, there are still cool, unsolved, fundamental mysteries in physics.
People seem really engaged by the weirdness and mysteries in theoretical physics, even to the point of feeling an ownership interest in them, and I think that’s awesome.
And so with this year’s Nobel Prize in Physics announced, I wanted to give readers a quick rundown on current Big Mysteries in Physics. It’s not a comprehensive list, but I argue that most other questions will ultimately trace back to these three.
1. How do we combine General Relativity and Quantum Dynamics?
Right now Physics rests uneasily on two fundamental theories. General Relativity deals with relationships between spacetime, velocity, and gravity (generally speaking, properties associated with large objects) and is amazingly predictive at what it does. Quantum Dynamics deals with sub-atomic particles, the quantized nature of the strong, weak, and electromagnetic forces, and the weird statistical rules these things obey (generally speaking, properties associated with very small things), and is amazingly predictive on quantum scales. We have one theory for big things like planets and spaceships, and another for small things like electrons and quarks.
The trouble is, the math– and metaphysical assumptions about reality– of these two theories are very different, and we don’t have a good way to fuse them together to talk about things like black holes or the big bang, things which straddle both the quantum and relativistic. Most physicists find the situation very troubling, not to mention deeply ugly, since it feels like the universe must have a single set of rules, not two. Presumably, if we found a more general model which explained each theory as a special case of a more general system, all sorts of little mysteries in physics might solve themselves (just like the theory of DNA solved lots of mysteries in biology). String theory, quantum gravity, and other, even more esoteric field theories are attempts at unification, but to date no attempt at unification has made any successful prediction that departs from what each separate theory suggests.
2. What is Dark Matter?
There are two huge fudge-factors in physics. One is Dark Matter– a hypothetical sort of matter that interacts with other matter only via gravity (“dark” means “we can’t see it”). It was introduced in 1934 to explain why galaxies rotate so fast: according to our equations, without this fudge factor, many galaxies rotate fast enough that they should simply fly apart. However, instead of disappearing quietly like fudge factors often do, we still need it today to explain galactic dynamics and certain other observations. Most cosmologists agree that it’s very probably not just an artifact of some mistake in our calculations, but some very real and very mysterious type of matter.
What we know: based on our calculations ~83% of all matter is “dark”. We think this dark matter is found in most or all galaxies, and there’s a good chance some passed through you as you read this. There are conflicting theories about where it’s most heavily concentrated– some models have it primarily concentrated in the dense center of galaxies, some have it more spread out, some in a halo. We’re pretty sure, whatever it is, that dark matter is “cold” — i.e., not moving at a significant fraction of the speed of light. There are a lot of experiments trying to conclusively detect dark matter, either (1) from its gravitational effects or (2) directly, if dark matter happens to occasionally interact (‘weakly interact’, in the lingo) with normal matter. (A shoutout here to the Sanford Underground Laboratory, which is in the running, and within spitting distance from my folks’ house.)
3. What is Dark Energy?
The 2011 Nobel Prize in Physics was awarded for discovering a mystery: that our universe’s expansion hasn’t slowed down since the Big Bang. In fact, it’s actually sped up. And we have no idea why.
The standard assumption prior to 1998 was that our universe was either going to contract due to gravity (the “big crunch”), or was somehow exactly balanced (Einstein’s static universe hypothesis), or that the initial energy from the Big Bang would keep the universe expanding, albeit ever more slowly as gravity tried to pull everything together.
An examination of a specific type of star explosion– Type Ia supernovae, which due to various dynamics all explode with roughly equal energy and brightness– provided a basis for an historical record of the universe’s expansion. Since we know how much energy is released in these explosions, we can calculate how far (which is another way of saying ‘how old’) it is based on how bright it is for us. Likewise, we can tell if it’s moving toward us since the light will be “blueshifted”, or if it’s moving away from us, it’ll be “redshifted” (think of how a siren’s frequency changes depending on whether it’s moving toward or away from you).
What we found when we put these things together was that basically everything is moving away from us, but– here’s the kicker– the closer, newer stars are moving away from us proportionally faster than older stars. The universe is not only expanding, but the expansion is accelerating.
Cosmologists don’t know what’s causing this. The convention has been to refer to it as “dark energy” since the cause of the expansion is generally fudged-in as an energy term in our equations, but we don’t really know if it’s a hidden form of energy, an emergent property of space, or something even more esoteric. There are theories, but they tend to be mathematically inelegant – and given our lack of a high-resolution expansion timeline, remain little more than untested guesses. If it is actually energy, there’s a lot of it:
A shameless plug for a pet theory:
I don’t know what Dark Energy is, but I do actually have a guess. If you’re in the mood for some cosmological speculation, and particularly if you’re in a position to give feedback on such, I encourage you to check it out. Like any new theory, it’s probably wrong– but based on my reading of the field, I don’t think it’s more likely to be wrong than other theories on the topic, and throwing one’s hat in the ring is how science progresses.
 Another major mystery is why there’s way more matter than antimatter in the universe. “Antimatter” sounds so weird and esoteric, but it’s actually rather common– there’s probably lots of antimatter popping in and out of existence in the room you’re in now. We commonly create antimatter in labs, and it actually forms the basis for tech like PET scans. It’s just that matter is WAY more common, and there’s no a priori reason we can see that this should be the case. I talked a bit about this in my 2008 obituary of John Wheeler.
John Hawks, on the mathematics of family trees and recombinant DNA:
In practice, even though we have billions of nucleotides, our DNA cannot follow billions of genealogical lines. Recombination over 30 — 40 generations does not divide chromosomes down to individual nucleotides. In the medium term, most human DNA is separated by recombination hotspots into lengths of around 50 kilobases. Across very short spans of 30 generations, DNA is for the most part inherited in chunks of hundreds of kilobases or longer. So dividing six billion nucleotides by 50 kilobases yields a number of around 120,000 ancestral lines at most from which any individual inherits his or her DNA. Recombination will increase this number somewhat further and further back in time, but not nearly so fast as the doubling of possible ancestral lines in every generation. This means that the vast majority of your ancestral lines more than around 17 generations ago have left no DNA to you whatsoever.
Granted, this is relative to the massive redundancy in our family trees– humankind is one huge, partially-inbred extended family. I.e.– if you go back 40 generations, you have over a trillion great-great-great-(etc) grandparents. There weren’t a trillion people alive in 1000AD, so a lot of those slots were filled by the same people.
In a previous post I sketched out the importance of frequency normalization in studying the brain, and a possible way to approach the problem. I don’t know if mine is a workable approach- frequency normalization in the brain is a hard problem, due to complex topology and variable state. But comparative frequency analysis within and across brain regions, however we accomplish it, will be really, incredibly important for understanding what’s going on in the brain, and how brains can differ, and maybe even how emotions work. I have a pet theory as to what we’ll find when we’re able to do this sort of frequency analysis in the brain. As with any new theory it’s most likely wrong, but since everybody’s theories on this are similarly disadvantaged (what few big-picture theories are out there), and it’s a topic worth figuring out, I have no qualms about throwing my hat in the ring.
Most importantly, I want to get people thinking about what emotion is, without cop-out references to ‘happiness neurochemicals’ or ‘regions of the brain which control emotion’. When it gets down to it, those are just ways of saying, “we don’t know what emotion is.” For instance, using these poor, correlative explanations of emotion, it would seem we could build a computer that could feel happiness by dumping some dopamine extract on its processor, or make it feel pain by fusing some human nociceptor nerves onto the motherboard. Clearly this is not the case. If we want to deal with emotion at anything except a trivial level, we need to dispense with correlative explanations and move toward an information-theoretic approach, to be able to explain affect in our brains as a special case of more general equations.
So what is emotion? I suggest we look to the mathematics of music theory for a possible answer.
(This is really technical and hypothetical; if you don’t enjoy mathematics and speculative neuroscience and would prefer alternative entertainment, why not check out these captioned pictures of cats instead?)
Lots of very intelligent people are putting lots of effort into mapping the brain’s networks. People are calling these sort of maps of which-neuron-is-connected-to-which-neuron ‘connectomes‘, and if you’re working on this stuff, you’re doing ‘connectomics‘. (Academics love coining new fields of study! Seems like there’s a new type of ‘omics’ every month. Here’s a cheatsheet courtesy of Wikipedia– though I can’t vouch for the last on the list.)
Mapping the connectome is a great step toward understanding the brain. The problem is, what do we do with a connectome once it’s built? There’s a lot of important information about the brain’s connectivity packed into a connectome, but how do we extract it? Read on for an approach to broad-stroke, comparative brain region analysis based on frequency normalization. (Fairly technical and not recommended for a general audience.) Read More
Ken Jennings, on his match with IBM’s Watson supercomputer:
Indeed, playing against Watson turned out to be a lot like any other Jeopardy! game, though out of the corner of my eye I could see that the middle player had a plasma screen for a face. Watson has lots in common with a top-ranked human Jeopardy! player: It’s very smart, very fast, speaks in an uneven monotone, and has never known the touch of a woman. But unlike us, Watson cannot be intimidated. It never gets cocky or discouraged. It plays its game coldly, implacably, always offering a perfectly timed buzz when it’s confident about an answer.
Perhaps somewhat less funny from Ken’s perspective, a question asked during his reddit interview:
How’s it feel to be owned by something that asked “What is leg” ?
Richard Hamming used to go around annoying his colleagues at Bell Labs by asking them what were the important problems in their field, and then, after they answered, he would ask why they weren’t working on them. Now, everyone wants to work on “important problems”, so why are so few people working on important problems? And the obvious answer is that working on the important problems doesn’t get you an 80% probability of getting one more publication in the next three months. And most decision algorithms will eliminate options like that before they’re even considered. The question will just be phrased as, “Of the things that will reliably keep me on my career track and not embarrass me, which is most important?”
And to be fair, the system is not at all set up to support people who want to work on high-risk problems. It’s not even set up to socially support people who want to work on high-risk problems. In Silicon Valley a failed entrepreneur still gets plenty of respect, which Paul Graham thinks is one of the primary reasons why Silicon Valley produces a lot of entrepreneurs and other places don’t. Robin Hanson is a truly excellent cynical economist and one of his more cynical suggestions is that the function of academia is best regarded as the production of prestige, with the production of knowledge being something of a byproduct. I can’t do justice to his development of that thesis in a few words (keywords: hanson academia prestige) but the key point I want to take away is that if you work on a famous problem that lots of other people are working on, your marginal contribution to human knowledge may be small, but you’ll get to affiliate with all the other prestigious people working on it.
And these are all factors which contribute to academia, metaphorically speaking, looking for its keys under the lamppost where the light is better, rather than near the car where it lost them. Because on a sheer gut level, the really important problems are often scary. There’s a sense of confusion and despair, and if you affiliate yourself with the field, that scent will rub off on you.
Academia does plenty of good things– but the opportunity cost of our systemic incentives toward ‘safe’ research (I include both the derivative and the esoteric) is rather staggering.
Edit, 8-13-11: A friend blogs,
The answer comes down to ethics. Service as an ethic is alien to so many academics. “I serve.” They don’t get it. Some do. A few. But a number of my friends have gone into the academy for longer or shorter periods of time, and the observations have always been similar – it’s not a place of scholarship and diligent service, but rather of all sorts of politics and backbiting where you desperately try to carve out your own private sphere in a confusing bureaucratic jungle.
I think academia used to have a strong shared sense of duty (Sebastian uses the term ‘warrior ethic,’ where service to a noble cause is its own reward), but for several reasons this has largely eroded or isn’t sustainable in today’s academy. It’s still present, but it’s much weaker. We could point to institutional factors, a changing demographic of who goes into academia, a crossover from our increasingly mercenary private-sector culture, or getting more of what we pay for, but at the end of the day– it seems like many people in academia think of it primarily as a career, not as service. It’s a big loss.
TMS ‘Sonar’ for mapping brain region activity coupling
Modern neuroscience is increasingly suggesting that a great deal of a person’s personality, pathology, and cognitive approach is encoded into which of their brain regions are activity-coupled together. That is to say, which of someone’s brain regions are more vs. less wired together, compared to some baseline, determines much about that person.
Right now such coupling is largely invisible and unquantifiable. If we are to move toward a clearer understanding of individual differences, not to mention psychiatric conditions, it would be invaluable to have a test for this activity coupling. A combination TMS+fMRI alternated pulse device- as it could stimulate a specific brain region/network, and measure how it affected the activity in other regions- may very well provide an objective basis for psychiatric diagnosis and treatment recommendations, and perhaps even a firmer foundation for psychology as a whole.
The following is a somewhat technical writeup of the idea. Not into detailed neuroscience stuff? Click here.