The next item of business is a statement by Derek Mackay, medium-term financial strategy. The cabinet secretary will take questions at the end of his statement, and so there should be no interventions or interruptions. I call on Derek Mackay, cabinet secretary. Ten minutes please are thereabouts. Presiding Officer, I am pleased to set out the Scottish Government's second annual medium-term financial strategy. When I made the equivalent statement a year ago, I noted that Scotland's public finances were set in the context of continuing UK government austerity, Brexit uncertainty and an inhumane hostile approach to immigration. Disappointed to say that those still set the context for our public finances today. This is a time of unprecedented austerity. At the end of last year, UK public spending as a share of national income had fallen for a ninth successive year in a row, the only time that this has happened since the second world war. The resolution foundation has highlighted that it particularly affects low and middle-income households. Between 2010-11 and 2019-20, a block grant for day-to-day spending has fallen by £2 billion. The decision to pursue a path of austerity by successive chancellors means that over £12 billion less has been invested in the Scottish public services over the last nine years. Let me be clear, austerity is a choice and not one of Scotland's making. The UK austerity policy is unnecessary and counterproductive. Leaving the European Union is not in Scotland's interests either. It is also not Scotland's will. Uncertainty is leading to subdued growth and leaving the EU will compound that impact. The effect of leaving the EU is clearly seen in the economic forecast for Scotland, with growth forecasts to fall from 1.3 per cent in 2018 to 0.8 per cent in 2019. The growth forecast has been downgraded, and the Scottish Fiscal Commission is clear that that is directly related to the on-going uncertainty created by the UK's EU negotiation process. Indeed, the highlight that the uncertainty caused by Brexit has prevented them from revising up their outlook for the Scottish economy and the expect business investment to continue to fall in 2019 and 2020 as a result limiting growth in the economy. Let that sink in for a second. The independent forecasters of our economy have said that if it would not for continued Brexit uncertainty, it would be forecasting faster economic growth, not slower. There is now no doubt that Brexit is hurting Scotland before it has even happened. In the 2014-20 EU budget round, Scotland is estimated to receive over £5 billion in funding from the EU, supporting jobs, delivering infrastructure, sustaining rural communities and delivering research funding for our universities. In the absence of firm commitments, we cannot yet quantify levels of funding in the future and the impact that that will have on the Scottish budget. However, the Scottish Government has been clear that, given that Scotland voted overwhelmingly against leaving the EU, funding levels should not be reduced as a result of the UK's exit, nor should those funds be centralised in London. Against the backdrop of UK austerity and uncertainty, we are committed to using our powers in a balanced and responsible way to stimulate the economy, protect public services and provide people and businesses with as much certainty as possible. Decisions made in the 2019-20 budget ensure that 55 per cent of income taxpayers in Scotland in 2019-20 will continue to pay less than people earning the same income in the rest of the UK, while still raising the revenue needed to support investment in the Scottish economy and public services. Had we applied UK income tax policy in 2019-20, we would have been over £500 million with less to spend. Growing and supporting the economy is essential for financial stability and for providing the resources for our public services. Our economic action plan sets out the actions that will deliver sustainable and close of growth, improve wellbeing and attract investment across Scotland. Over £1 billion has so far been committed to city, region and growth deals over the next 10 to 20 years. The aim is to ensure that every part of Scotland benefits through 100 per cent coverage. We have recently introduced a legislation that will underpin the Scottish National Investment Bank, an institution that will help shape our economy through mission-led patient investments. Under the national infrastructure mission, annual infrastructure investment will be £1.56 billion higher in 2025-26 than the £5.2 billion that we are already investing in 2019-20. I can confirm that I have accepted the recent recommendations of the Scottish Futures Trust to adopt the mutual investment model as one means of supporting infrastructure spending, which will extend a range of tools at our disposal to provide crucial capital investment in Scotland. Alongside the MTFS, the Scottish Fiscal Commission has published new economic and fiscal forecasts. As I said earlier, the negative economic impact of leaving the EU is clearly demonstrated in the forecasts. With economic growth forecasts to fall from 1.3 per cent in 2018 to 0.8 per cent in 2019, however, the forecasts also point to a resilient Scottish economy, with employment rising further over the next five years. Unemployment remaining at near record lows and earnings accelerating. The SFC has also produced updated income tax forecasts. Those have increased in every year from 2018-19 over the forecast period relative to the SFC's December forecast. For 2019-20, the forecast of income tax revenues has risen by £20 million, largely driven by an improved outlook for earnings. However, forecasts for the block grant adjustment, deducted from the budget each year, have gone up by even more. That means that the net contribution of income tax to the 2019-20 funding envelope on the basis of current estimates is about £188 million smaller than forecast in December. That position is indicative that the 2020-21 budget will be determined by the next round of forecasts by the SFC and the OBR in the autumn. I have set out in this medium-term financial strategy a set of principles and policies that will guide the use of our borrowing and reserve powers. Decisions are guided by the principles of sustainability, stability, budget flexibility, intergenerational fairness, value for money and transparency. However, it should be clear that the circumstances that determine the use of our powers will often depend on factors beyond our control, with UK Government spending decisions continuing to be the main factor in determining the Scottish budget. On capital borrowing, the MTFS sets out plans to borrow £450 million this year and £350 million next year. It is our policy to borrow between £250 million and £450 million annually over the remaining period of the national infrastructure mission to ensure that investment increases overall year on year. To ensure that there is flexibility to undertake capital borrowing when it might be most needed, a contingency of £300 million of the capital borrowing limit will be left unused. That strikes the right balance between supporting the economy and the prudent use of the restrictive borrowing powers contained in the fiscal framework. Finally, let me turn to the framework for the spending review. The UK chancellor committed to a spending review this summer. However, in the context of continuing uncertainty over Brexit and the impending change of Prime Minister, it is, like most things relating to the UK Government, unclear if that will actually take place. Nonetheless, reflecting the importance of sustainable public finances, the Scottish Government plans to undertake reviews of spending beyond 2020-21. We will fulfil our commitment made during budgets of 2019-20 to bring forward a three-year settlement for local government in 2020-21. In line with the national performance framework, the spending review focus will be on creating a more successful country with opportunities for all of Scotland to flourish through increased wellbeing and sustainable and inclusive economic growth. It will be driven by a strategic focus on addressing Scotland's long-term challenges. For resource, we are currently planning to publish indicative budgets in December 2019, alongside the Scottish budget 2020-21. However, if we do not have sufficient clarity from the UK Government on its spending plans at that stage, that may not be possible. We will expect resource spending proposals to focus on outcomes and evidence, so, as far as possible, the impact on the specific challenges and opportunities that we face around securing sustainable and inclusive economic growth, improving national wellbeing, combating child poverty and meeting our statutory targets and tackling climate change and the climate crisis. For capital, future budgets will be published by June 2020 to take account of the infrastructure commission's findings to be reported at the end of December 2019 and the Scottish Government's next infrastructure investment plan, which will be informed by the commission's advice. It is clear from what I have said already that the resources that are available to the Scottish Government will be constrained by continued UK austerity. We recognise that we will not be able to do all that we want to do or all that others want us to do. Prioritisation will be necessary to focus resource where it will have the biggest impact. I look forward to a responsible debate on how we best deliver those outcomes, and I commend the medium-term financial strategy to the chamber. The cabinet secretary will now take questions on issues raised in his statement and tend to allow about 20 minutes for questions after which we need to move on to the next item of business. Can the members who wish to ask a question to press their request to speak button sound a Colin Murdo Fraser? Thank you, Deputy Presiding Officer. I start by thanking the financial strategy for advanced site of a statement, although he had redacted so much of the key data. It was frankly of little value. I have to say to him that he made a false statement in the forward to this document. The document says that there has been a £2 billion real-terms reduction to our block grant since 2010. As the cabinet secretary knows perfectly well, that is an untrue statement. According to Spice, the block grant is up in real terms since 2010, so I think that he should start by apologising for a misleading Parliament in respect of that particular statement. The latest data shows that, despite Brexit, the UK economy performs well, with record high employment, growth exceeding Germany and, according to the IMF, growth over the next five years is projected to exceed its western European average. That is under a Conservative Government. In contrast, in Scotland, under an SNP Government, we have a dismal picture that has been painted this afternoon, with growth projected to lag well behind the UK and the gap to grow between average UK performance and Scottish performance. Are we now in the area of a potential Scotland-specific economic shock? What is he going to do with the powers at his disposal to address that? Secondly, he announced today a £180 million reduction in forecast income tax receipts, according to the Fiscal Commission figures. That is on the back of previous income tax shortfalls forecast from 2017-18, £145 million and, from 2018-19, £472 million. How will the cabinet secretary fill the gap created by his policies? Will he be increasing taxes and, if so, on whom and by how much? Or will he be cutting spending and, if so, where? People deserve to know the truth. Cabinet Secretary for Health and Sport, you would expect everything I ever say in this chamber is true and will continue to be true. The Tories clearly cannot make up their minds when we have got good economic indicators in Scotland. They think that they have got a responsibility in the Scottish economy when they are less good. They think that it has nothing to do with them and it is all the Scottish Government. In fact, on GDP, Scotland is outperforming the rest of the United Kingdom. The most recent quarter is an example of that. Murdo Fraser mentions unemployment. We have got record low unemployment in Scotland right now and also outperforming the rest of the United Kingdom. When Murdo Fraser has the time—I am sure that he will look through in great detail at the SFC report—the reason for subdued growth in Scotland is Brexit. Of course, that is the fault of the Conservatives in the UK and a damaging Scotland's economy by the decisions and the mismanagement that they are now in control of. In terms of that accusation around underperformance, the SFC has shown that Scottish GDP growth will be slower than UK GDP growth over the forecast period, primarily because of slower population growth in Scotland. Who controls population growth in Scotland? The UK Government overpowers migration. We have an economic action plan that will grow our economy, specifically in relation to income tax reconciliation. The scale of any reconciliation is not certain until we have the actual outturn data. There would always be volatility, the SFC has admitted that, but it has shown increases in income tax in terms of forecast for Scotland over the forecast period relative to its December forecast, cumulatively an increase of more than £430 million between 2017-18 and 2023-24, largely driven by an improved outlook for earnings. The SFC notes that, due to historic forecast errors for such a large tax, there will be negative reconciliations, which should not be unexpected, and we may see extended periods of positive reconciliations into the future. We have been acting to grow our economy. There is also vindication for putting some resources into the reserve so that that can be managed if there is that volatility. We also have borrowing powers as well, but we are confined and bound by austerity as well. Murdo Fraser is only truly happy when he is utterly miserable. The Tory position in Scotland seems to celebrate that Brexit will do less damage in England than in Scotland. We will continue to balance the books using all the powers at my disposal in a responsible and sustainable way. Before we move on, I have been quite liked here, but that was a bit of a mini statement. You know well that it was, so we can have crisp answers, please. I call James Kelly to be followed by Patrick Harvie. Thank you, Deputy Presiding Officer. I thought that the cabinet secretary was getting another 10-minute statement there. I thank him for his advance copy of his statement. Even though the number of black marks throughout the statement was consistent with the theme of the black holes in Scotland's public finances, the bleak figures that are announced today, specifically the cabinet secretary, indicate that there is a potential £188 million less in the spending envelope for 2019-20. We will worry about those who care about what is going on in Scotland's communities. People who have to wait hours and hours for ambulances, families with kids at school who see education resources having to be cut by councils, and those who are stranded on train station platforms with trains that do not turn up in time as they await journeys to work will not welcome today's statement. I specifically ask the cabinet secretary then what action in terms of the medium financial strategy is he going to take to address the gap in Scotland's public finances and also the gap in whole in Scotland's public services? Cabinet secretary, mindful of what I said previously. The redactions in the statement are those that have been agreed by the protocols of the Parliament around that sensitive data. That should not be news to anyone. We have been doing it since we have had this sensitive data. It was better than the alternative budget that I got from the Labour Party, which was a total blank page. Never mind a few redactions from a statement in a report. We will continue to invest in the public services of Scotland, oppose austerity, try to mitigate the impact of Brexit. Should it happen, there is an opportunity to avert Brexit. If we actually did that, if we were able to avert Brexit and end austerity, there would be a massive windfall to the public resources of Scotland, because we would be able to invest in the way that the Tories have constrained us. In terms of the powers that we have, I have been balancing the books responsibly, allocating some resources to reserve. It was opposed, if I remember correctly, by the Labour Party, but I also use the reserve borrowing powers, if required, in terms of that forecast error, if that comes to pass. We will have more data on that and then we will respond accordingly, but a way that gives sustainability for a public services. I am grateful for the advance copy of the statement. I am pleased that green influence on tax policy has meant that there is more money available for Scotland's public finances than there would have been if we hadn't changed tax policy. If Murdo Fraser is worried about who is going to be paying more tax next, I would be very happy if he and his classic motor were next in line. If he has seen the analysis from Spice about six months ago about the pipeline of capital investment and foreshadowing the threat that there is going to be a shift back in the direction of high-carbon capital projects in the existing pipeline, how is that consistent with the Government's commitment to continually shift capital spend away from high-carbon and toward low? Why should we believe that the Cabinet Secretary is right and that Spice is wrong at the moment? For the reasons that Patrick Harvie has just given, if that was a six-month-old report, what we have to look at is our current infrastructure investment pipeline. Clearly, the First Minister has declared a climate emergency and our policies should suit that investment plan. The infrastructure commission will also advise us and will take the time to recalibrate our capital spending plan. There is now the opportunity to recalibrate capital spending, including the principle that we set out in a budget negotiation to invest more in low-carbon. We have now made a commitment in terms of the reduction in emissions. Of course, our spending commitments must follow that as well. There is now an opportunity to influence those commitments. Willie Rennie followed by Bruce Crawford. Last year, we had a catastrophic forecasting error for income tax. The impact was initially only on the baseline. However, the lower income tax forecasts are still expected to have an impact on the 2021 budget and the year after. Can the finance secretary tell me how much the approximate scale of the negative reconciliation requirements for the next years have changed since the news of this error from the fiscal commission and the OBR was released last year? Willie Rennie talks about £188 million worth of change. What does that leave for cuts to the budget? Cabinet Secretary for Education and Skills again, I think that Willie Rennie shouldn't conclude the one option for the budget when we have a range of levers that we can deploy if there is forecast error because of the SFC forecast, which does include use of reserves and borrowing. Yes, we may have to look at expenditure as well, so there is a range of tools that we can deploy in the knowledge that there will be a substantial variation in that forecast. What has changed substantially is the OBR's forecast. The OBR's forecast is what has changed in terms of the block grant adjustment, rather than necessarily just focusing on the SFC. That is just one part of the story. Details are throughout the SFC report and the medium-term financial strategy. Right now, we should prepare for that, but bear in mind that the out-turn figures in July are absolutely critical, because they will help us in the next round of forecasting, which will be the one that sets the budget. However, it is wrong to conclude that there are cuts to the Scottish budget when we have other economic levers. There are other levers that we have to address that forecast error, but I say again that those variations may well be substantial, and that is why we need to look at the out-turn data and not just the forecast. Murdo Fraser cried wolf in financial matters soft in the chamber. No-one really hears his bleeding any longer, but as far as the cars are concerned, I can say that I saw Murdo recently in a very good hybrid motor, to be fair to him. I like your question, please. Enough of cars. Would the cabinet secretary agree with me that those indicative income tax forecasts are simply just up their forecasts? As we know, with one certainty about forecasts, they are almost certainly wrong. Given that the fiscal framework requires the cabinet secretary to pay heed to those forecasts, I wonder if he can say how he is thinking on whether or not the current borrowing powers and limits that exist within the fiscal framework are sufficient to deal with the risk of forecast error. I suppose that that partly relates to Willie Rennie's point. If there is a substantial variation and reconciliation that is required, it may well be that the borrowing powers and the use of reserve because of the levels of drawdown that are tapped may be inadequate to address the scale of adjustment that may be necessary because of reconciliation. I think that there is good reason to look again at the drawdown limit so that we are not constrained in the actions to address the reconciliation that may be required because of forecast error at the hands of the OBR and the SFC. Dean Lockhart followed by Maureen Watt. Let's be clear, cabinet secretary. Scotland's economic underperforms long predates Brexit. In fact, over the past 12 years, we have seen annual economic growth of just 0.7 per cent, and this economic stagnation is set to continue. You have laid out growth forecasts. Question, please. Just 0.8 per cent next year compared to 1.2 per cent for the UK economy. So isn't it time that the cabinet secretary recognised that his economic policy is creating a low growth, low productivity and low-wage economy? It's been economy, secretary. GDPs outperformed the forecast, unemployment is at record low, outperforming the rest of the United Kingdom, exports are up more than the rest of the United Kingdom, and business enterprise research and developments outperforming the rest of the United Kingdom. I think that I'm doing no bad. Maureen Watt followed by Mark Griffin. The fiscal framework sets out on page 13. How the Scottish Government's block grant is adjusted to account for the proposed VAT assignment. Could the cabinet secretary explain further his view on this proposal, the risks involved and the potential volatility that could impact on the Scottish Government's spending plans? I have appeared at the finance committee. I have written to the chief secretary's treasury. I am concerned about the volatility and the lack of data that informs this. 1 per cent error in that regard could cost the Scottish budget £100 million, so I think that we have to get it absolutely right and not add to the volatility of the Scottish budget, and that's why I'm reflecting on the position as it relates to VAT, which is not a power, it's a signation. Given that this is a five-year plan, can the cabinet secretary say where in the strategy are the billions of pounds needed for an income supplement that will cut child poverty and meet the Parliament's interim target in just four years' time in 2023? It's not intended to be a mini-budget. It's not intended to set out the individual spending commitments, so I haven't done that in this process. That is something that we would consider as we approach the budget. As I heard Trillia and Somerville say just moments earlier, there will be a further report to Parliament in terms of child poverty in June, and I'm sure that the member, with a keen interest in this subject, will look forward to that update to Parliament. I wonder if the cabinet secretary can comment on whether he feels that the Scottish Fiscal Commission is overly cautious in their forecasts and how they compare with the OBR as far as accuracy is concerned. Would he agree with me that there are always going to be variations in forecasts? Those are not errors, they are variations. Cabinet secretary, I'm not particularly keen to give a personal judgment. We've got two sets of economists giving us their forecasts. I don't propose to add a third view of the Scottish Government. We have to follow both sets of forecasts. That's the agreement, that's what we're doing, but it is true to say that errors will be inevitable. However, how we manage it, approach it and have that reconciliation is a matter for us, and that's why I'm looking very carefully at it. It is true to say that the different methodologies and forecast assumptions, different timings, different fiscal events, sometimes lead to a difference in position between both forecasting organisations. Bill Bowman fall by Emma Harper. The cabinet secretary speaks at length about the choice of UK austerity. Andrew Wilson's growth commission predicted £27 billion of austerity over 10 years. Will the cabinet secretary agree with me that it is the better choice to remain as part of the UK? Cabinet secretary. The austerity and notional deficit that we experience is because of being part of the UK. UK is not the remedy to it. Independence is the remedy to a subdued economic growth. The growth commission of which I was a member shows a pathway to deliver that sustainable economic growth that will grow public services and public investment in real terms. Emma Harper fall by Neil Bibby. Cabinet secretary, we know that for the Tories to remain in power, they reached an agreement with the DUP to the tune of over £1 billion so far. If such money had been subject to Barnett consequential calculations, as it should have been, what does the cabinet secretary think would be the fiscal picture for Scotland today? Cabinet secretary. That way would have been £3.3 billion better off. Neil Bibby fall by David Torrance. I agree with the finance secretary that Brexit is having a significant impact on economic growth in Scotland and the UK. A downgrade of growth will of course affect jobs and living standards. The Scottish Government is proposing a citizens assembly to discuss the constitution again, as it is the number one priority. Given the urgent need to grow our economy, why does not the Scottish Government instead convene a summit of industry, trade unions and economic experts to agree an urgent plan to boost Scotland's economy and the finances that support our public services? Cabinet secretary. Because I already meet all those people and that is why we are already seeing growth in GDP, record low unemployment, record investment in business enterprise research and development and a plan around internationalisation that is seen as enhancing our exports. We are doing more around innovation and inclusive growth. All of that is at threat. It is actually working, because of the indicators that I have just mentioned. It is absolutely working, but what is subduing from members who clearly have not even read the SFC report will know what the independent forecasters are saying is the reason for subdued growth and a downgrade in performance is Brexit. Maybe the Labour Party could help us in averting Brexit. There is an idea. Thank you, Presiding Officer. The fiscal framework was originally due to be reviewed after the UK and Scottish Parliament elections in 2020 and 2021 respectively. Obviously, a lot has changed in the preceding years and with everything so far that has come to light, will the cabinet secretary foresee the possible benefits of an early review of the fiscal framework? We have an agreement in the fiscal framework to allow one-fills Parliament of use of those powers to inform that review in that debate. The number of issues that Parliament and I have raised with the Treasury would suggest that we should look at the agreement to see whether there can be further flexibility and concession around it, because it will have an impact on the public finances of Scotland. Thank you. That concludes questions on this point of order. I am very grateful. On a point of order, I wonder if you and the other Presiding Officers could reflect upon the provision of information to members of the opposition parties in advance of statements such as this. I have just seen an announcement by the Scottish Fiscal Commission. Can I just ask you to sit down just now? I was sitting here when the cabinet secretary said that there was a protocol when there is sensitive information. I do not want to repeat what you say. It is on the record. Can I ask you to look at what is on the record first and then return if you feel that it is necessary with a point of order? It is not a discussion. You are referring to the redacted parts of the statement. Oh, you are not. I beg your pardon. I am grateful, Presiding Officer. I was not referring to the redacted matters. I am referring to the Scottish Fiscal Commission forecast, which is integral to the statement that has just been made. We are not made available to opposition parties before the statement was announced. The Fiscal Commission said just in the last few minutes that its reconciliation anticipates that the budget for the current year will be reduced by £229 million. Sorry, the budget for next year by £229 million, and the budget for the following year by a staggering £608 million due to income tax reconciliations. Had that information been made available to opposition members prior to the statement that we have just heard— Can I ask you to sit down just for a moment? Yes. I hear what you are saying. I do not want to open this up to a debate at the moment, but we will reflect on that and, if necessary, we will return to the point that you have raised. I am sorry that I anticipated you. I thought that you were going to go on for redacted points. I may now move on with the leave of Mr Fraser to the next item of business, which is a debate on motion 1746. The name of Ivan McKee on a trading nation I'll give members a few moments to take up their seats.


What is it like to have schizophrenia? The experience of schizophrenia is not one that most people will easily understand. It's not like depression, where most of the symptoms, like insomnia or fatigue, will be instantly familiar to most people. With schizophrenia, the most prominent symptoms of the disorder, the delusions, hallucinations, and disorganized thoughts don't have any direct parallels in our own lives. Because of this, schizophrenia is hard to understand, leading to misinformation, misconceptions, and misdiagnoses. To improve our understanding of this disease, we need to do much more than simply memorize lists of symptoms. Instead, we need to learn the underlying mechanisms of schizophrenia so that we can better recognize it when we see it in our patients. Some have hypothesized that the core deficit in schizophrenia involves the concept of salience. Salience is the interestingness of information, or how important we perceive that information to be. We give salient items more attention, and are more likely to act upon them. If I were to tell you 10 random numbers, say, 1-5-5-8-3-7-8-2-9-0, but not tell you anything about them, you probably wouldn't find them particularly salient. Without that salience, they will likely drop from your attention, and quickly be forgotten. However, if I told you that these numbers are from tomorrow's winning lottery ticket, and that there's still time to enter, then suddenly they become very interesting indeed. By telling you this, I have increased the salience of the information. The numbers themselves have not changed at all. Only their salience has changed. On a biological level, the neurotransmitter dopamine plays a key role in the process of salience. When information is found to be salient, your brain releases dopamine. This rush of dopamine makes you pay more attention to the information and motivates you to act upon it. We can manipulate the salience of information by tying it to some kind of a reward. Take the ticker on the New York Stock Exchange as an example. Someone who is unfamiliar with the financial system would likely find the constant stream of letters and numbers to be meaningless or random. For stockbrokers, however, the ticker is incredibly salient because stockbrokers believe that these letters and numbers will potentially allow them to make millions of dollars. This information has been made salient by connecting it to the possibility of reward. Information can also be made salient by linking it to a negative outcome. For example, public safety experts trying to encourage helmet use will often use grisly footage of motorcycle accidents as a way of getting your attention. A video like this is disturbing on a visceral level, yet it is also effective at increasing the salience of their message and motivating people to act differently so they can avoid a similar outcome. Our brains use salience to filter incoming information. We take in an enormous amount of information every day. Within 30 minutes of waking up, most of us have already read the news, checked the weather forecast, browsed social media, and listened to music. If we gave our full attention to all of these things, we would quickly become overwhelmed and incapacitated. Instead, we quickly move on from information that has no direct relevance to us. From this morning's information, your brain might interpret only the weather report as salient, as forgetting to bring an umbrella will leave you cold, wet, and miserable. The other information is found to have no particular significance, so it is filtered out and quickly forgotten. This is a complex process, yet our brains do it instantly, automatically, and unconsciously, thousands of times per day. So how does this relate to schizophrenia? People with schizophrenia are believed to be in a state of aberrant salience, characterized by excessive and illogical release of dopamine. When dopamine is flowing in this way, salience is assigned to every bit of new information without any clear connection to rewards or punishments. It would be like suddenly entering a world where every letter and number had the potential to make you a million dollars, or where every decision had the life or death consequences of a motorcycle accident. People in the early stages of schizophrenia describe being in a state like this. They say things like, My senses were sharpened, I developed a greater awareness of the world, and became fascinated by the little insignificant things around me. Sights and sounds possessed a keenness that I had never experienced before. It was as if parts of my brain awoke, which had been dormant. My senses seemed alive. Things seemed clear-cut. I noticed things I had never noticed before. I felt that there was some overwhelming significance in this. I felt like I was putting a piece of the puzzle together. This makes life initially quite vivid and dramatic for someone in a state of aberrant salience, yet it rapidly becomes a confusing and unbearable way to live. Normally, we can figure out why our brain is telling us that something is important. We know that paying attention to the weather forecast will help us to avoid having a bad day. However, someone in a state of aberrant salience will perceive a sense of overwhelming significance in all of their experiences without being able to understand why. Why me, they ask. Why now? Why does this all seem so important? To make sense out of this experience, people with schizophrenia will begin to develop explanations for why each piece of information suddenly feels so important, so relevant, so personally significant. If they watch the news in this state of heightened salience, they might come to believe that the president must be using their state of the union address to communicate a special coded message meant only for them. When listening to music, they may get the feeling that there must be a reason why that particular song came on the radio at that exact moment. On the internet, any random stimulus, say a pop-up ad about a new brand of lotion, may seem so special and compelling that it must somehow be the key to saving the world. To everyone else, these ideas sound, frankly, psychotic. For a person in a state of aberrant salience, however, these delusions of reference help them to make sense out of a senseless mental environment where everything, everywhere, seems to have some life-changing importance. If delusions develop when excessive salience is given to external stimuli, then what happens when salience is given to internally generated information? After all, everyone has an internal stream of consciousness that we generally recognize as being our own. In a state of aberrant salience, however, these thoughts can seem important to the point where they are given the same level of priority as a voice coming from outside your head. This is thought to be the mechanism for the auditory hallucinations that people with schizophrenia experience. It is as if the volume of these internal thoughts has been turned up so far that they grab your attention in the same way as hearing your name yelled from across the room. Aberrant salience can also explain the profound thought disorganization that is another hallmark of schizophrenia. People with schizophrenia often have difficulty understanding even seemingly simple concepts and ideas. They may hear the same information over and over again, but show no sign of actually comprehending it. They can respond to their environment in ways that make little sense to an outside observer. This disorganization of thoughts, speech, and behavior makes more sense when you consider that aberrant salience leaves people in a state of perpetual information overload. When the filter of salience breaks, you become constantly bombarded by new information every second of the day with no way of making sense of it all. It would be like trying to watch dozens of TV shows all at the same time. In this state of confusion, it is no wonder that people with schizophrenia can appear so bewildered and distracted by even simple concepts. They say that the value of a theory lies in how well it is able to explain what we observe, and aberrant salience appears to pass this test. It provides a framework for answering many of the questions we have had about schizophrenia for centuries. For example, we have long wondered why the content of delusions in schizophrenia varies so drastically from culture to culture. Someone in a modern city is more likely to believe that satellite waves are broadcasting their thoughts than someone from a rural area who is more likely to say that their thoughts are being stolen by a neighbor's curse. Yet, if schizophrenia is an illness with a biological basis, shouldn't the symptoms be similar across cultures? The concept of aberrant salience bridges this gap by arguing that delusions are normal psychological constructs generated by a person in an abnormal biological state. If delusions are psychological constructs, it makes sense that they would draw upon that person's own unique experiences and cultural values, even if the underlying biological abnormality is the same. The concept of aberrant salience can inform not only our understanding of schizophrenia, but also how we treat it. If aberrant salience is associated with excess dopamine, then using medications to block dopamine should reduce the symptoms of schizophrenia. This appears to be true. All of the drugs prescribed for schizophrenia, known as antipsychotic medications, block dopamine receptors to some degree. This creates a state of dampened salience where information lacks the power to capture attention that it once had, leading to reductions in symptoms like delusions, hallucinations, and thought disorganization. However, this comes at a cost. Like many medications, antipsychotics are non-specific in their actions. They cause a global dampening of salience for all information that the brain processes, not just information related to psychosis. When preparing for their day, a person taking antipsychotic medications would avoid assigning salience to irrelevant stimuli, such as pop-up ads or a song on the radio. This is an improvement. However, they also would have difficulty assigning salience even to relevant information, like the weather report, and may then forget to bring their umbrella. This shows both the power and the limitations of using antipsychotics to treat schizophrenia. They reverse the excess of dopamine driving a state of aberrant salience, but in doing so, they can interfere with the normal functioning of salience as well. Understanding the concept of aberrant salience can be illuminating for people trying to learn about schizophrenia. However, it is not without its limitations. It does a much better job of explaining the dramatic positive symptoms of schizophrenia, like delusions, hallucinations, and thought disorganization, than it does explaining the negative symptoms like flat emotions, inability to feel pleasure, and difficulty forming relationships that are often more impairing for people with schizophrenia. The concept of aberrant salience is also silent on the question of why some people develop schizophrenia while others do not. It only explains what happens once an episode of psychosis has already begun. It is likely that no single theory will explain the disease as complex as schizophrenia. There are, without a doubt, multiple mechanisms to be discovered. What is it like to have schizophrenia? Schizophrenia is so much more than just a list of symptoms. The concept of aberrant salience gives us a better glimpse into the complex and multifaceted lives of our patients. It allows us to see that people with schizophrenia are not some alien other that we will never understand. Rather, it shows us that the symptoms of schizophrenia are rooted in thought processes that every human being can understand and relate to. It underscores the shared humanity we have, even with people who act and speak in ways that we cannot comprehend. We are ultimately more alike than we are different. If more people understood this, perhaps there would be less of the fear and stigma that has dominated the discussion about schizophrenia for so long. Hi everyone, I hope you gained something from this latest video. I strongly encourage anyone with an interest in schizophrenia, or mental health in general, to read the paper that inspired this talk. I'll put the link down in the description. As always, if you have any thoughts on this video, or suggestions for future content, let me know. You can also check out my other videos on YouTube, or my book Memorable Psychopharmacology on Amazon. Thanks for watching.


Okay, very good morning folks. It is Anthony Chung here at Amphibuy Trading. It's Tuesday the 7th of July and overall Quity markets finished higher on the close of Wall Street yesterday And we've had another gain in the Shanghai composite last night now up for a sixth day in a row bringing the this month's gain now to about 13% bearing in mind we're early on day 7 of July at the moment So question mark and what I'll cover in the briefing today is about how How sustainable is this rally that we're seeing an overall positive sentiment and in the midst of still ongoing Pandemic of course Otherwise as per usual, please make sure you like and subscribe to the YouTube channel if you're watching this on there Don't forget as well always feel free to leave a comment if you want to ask me any questions at all I'm always happy to help but let's have a look at the the charts this morning then to get a general feel for sentiment across the different asset classes and As you can see the equity index futures were Pushing up in toward the close in Wall Street and initially peaking then in the Asia-Pacific session before then we've kind of drifted south There were some reports overnight In regard to Chinese state media now pointing to the need for rational investing given that ramp that we've seen in their local markets Undependent recent days by the country state media which essentially was encouraging Retail trader base to buy into the rally and trading volumes overnight in the Asian session for the local domestic market in China We're about a hundred and thirty percent higher than their recent average so Yes, I guess whenever something rises that aggressively that quickly as they said in the course of seven days to Shanghai Composite is up Around 13 percent, which is which is phenomenal so a little bit coming off here and A call for rational investing being ushered overnight It's just got a few people wondering whether or not this is truly sustainable just given the overall Situation more globally. Of course, we're not out of the woods yet Although the marketers decided to relatively brush aside the COVID developments in the US There's still this outbreak in Australia as well So things remain precarious on that front So there's a bit of profit-taking perhaps on the run-up that we had yesterday I mean yesterday was particularly quiet. You can see in the S&P in the center right chart We were generally respecting a range until we saw the breakout which really didn't happen to the Asia-Pacific session So what's quite interesting in this European open? We're just breaking the lower bound of that range that really held the price activity in Monday session in the S&P future Similarly then in gold it's pretty flat I'll just be keeping on that overnight Asia-Pacific loads tested and bounced a few times already this morning as Europe has come in That'd be around the 1792 and a half level T-notes just edging up ever so slightly as equities weakened in the overnight sessions So the 10 years up five ticks oil in step with equities then down about 50 cents and just trading below what was The low print that we saw yesterday afternoon and around The kind of pickup in volume on the traditional 9x pit-hour timing with that daily pivot S1 level So a little bit extension of the loss just finding some support around the $40 handle But any further push to the downside behind 3984 Which was the low that we had going back to last Friday in the light electronic trading session for the US holiday FX markets the Dixie is up marginally Just given some of the moderate risk of tone developing So Dixie's up about zero point one four percent Exerting then some minor downside pressure and both major pairs, but very contained early around 10-pip losses At the moment. So that's the overall kind of feel of things. Let's go into some headlines then starting off with this What are we looking at here? Well, we're looking at the black line is the S&P 500 And we'll see the roller coaster we've been on pricing in the the pandemic on the March kind of route and then recovery and The bars are indicative of the CFTC CME e-mini S&P 500 net Non-commercial futures positions. So the commitment of traders report Otherwise known as the COT was released yesterday, which is an unusual timing but owning to the US holiday that we had at the end of last week and Looking at non-commercial future position. So non-commercial being that then of I guess speculators in the market Portfolio managers hedge fund managers people who are not using it for the purpose of commercial terms like to do with trade and agricultural goods For example, and so the more speculative side of this what you've been seeing is we were really heavily positioned short Only about two weeks ago, but obviously we've continued to see a Sustainable rally now you can see why people were short two weeks ago because we had run up ever so quickly to 3200 Which given how net short the market was perhaps then few people getting squeezed on those shorts And as we started to drop from thirty two hundred or in excess of that point down to three thousand people looking to Add to that position thinking that the market was looking quite heavy And in fact then this was that telling sign because this would be in in step with then The commencement of the second wave virus started to pick up in the likes of the Sun Belt States in America But then get they got that wrong and you know They were heavily short and the markets continue to come up and you know what the headline would suggest here is cover me So a lot of these shorts getting covered now and continuing to just bump the market back up in toward that 3200 again and as you can see Reflective in the overall non-commercial futures positioning is a significant reduction in shorts That we've had since where we were just two weeks ago So they're quite interesting on the underlying there with people still having a difficult time Trying to gauge then the market's perception having been two weeks ago Ultra sensitive to corona updates as we were right at the beginning of that second Re-acceleration phase of the virus in North America now. It's seemingly it doesn't really matter anymore at least for the time being With a number of those key states obviously halting their reopening, but it not Impacting really market psyche too much, but we're going to come back to that point We're going to discuss a few things in more detail Before I get to that I did mention a couple things about China overnight One thing I would say is that obviously that that infamous trade war loop that cycle about the kind of US getting tough and then markets start to panic and then all of a sudden you hear a Consider tree tone then it looks like they're going to progress then they don't and we go around and round well obviously the the latest kind of intensity of US China trade talks has been Slightly elevated a kind of classifier as moderate though in the context of what we've seen over the last two or three years But Chinese officials in the Wall Street Journal according to sources overnight Believe that if they keep ramping up agricultural purchases, it will help keep the deal alive the US trade secretary Robert Lighthizer and Chinese Vice Premier Liu are to lead a phone conversation in mid-August To assess the deal's progress and this follows earlier reports from pressure from US business groups We've called on China to uphold its purchases commitments under the deal So again, it's kind of almost like things have been a little bit tense and so it out comes the journal source which of course is Well-timed to suggest then that China will be commitment committed to ramping up those purchases And that has always been the kind of glue that's held the deal together no matter what you're saying Politically publicly from Donald Trump criticizing China at the end of the day as long as China are buying those goods You know the the relationship will continue at that point in time The other things well this morning before we we move further forward We have some German data industrial output from May month a month at seven point eight percent I was slightly below the expected ten percent just so you're aware The other thing overnight you had the Australian Central Bank decision So they kept the cash rate in three year yield target unchanged at zero point two five percent But absolutely as expected they did note the downturn has been less severe than earlier Expectations and conditions have recently stabilized However, don't forget that right now, of course Australia is trying to deal with a quite severe outbreak of new infections in Melbourne the second second largest city By population in Australia So New South Wales and Victoria the nation's most populous and economically powerful states Are set to close their borders tonight, of course And as we discussed yesterday, it's the first time that's happened in about a hundred years So yes things not as bad as perhaps expected in the rear view mirror But going forward kind of like the situation at the moment going into the US It's more what does the future hold now given the fact that a lot of the reopening has been halted and we're seeing the renewed cases of coronavirus On that front then this leads us into a bit of a narrative for the US side of things which of course is the focal point for markets and This was an exclusive in the Financial Times citing the Atlanta Fed president Bostick Now he said the rebound in the world's largest economy is in danger of stalling as a result of the recent spike in coronavirus infections across several large US Southern and Western States so the headline reading that he warns the US recovery may be leveling off. It's troubled by the data on business Reopening so let me run you through a few things that why this is quite interesting for one Whenever you hear a Federal Reserve official speak again, if you're if you're new to markets The key is the kind of table here that all traders will be aware of which is the current members who have voting rights as members of the Federal Reserve or the FOMC in this case and Every year this alternates You have then a rotation of some of the alternate reserve Districts and then you have a board and a chair the board and the chair remain fixed over a Period of time so you can see their constant ticks for the likes of Powell or Brainard for example However, you can see these these crosses and ticks Would would reflect the the rotation what you've got here then it's Bostick The next important thing then is after are they a voter or non-voter because that will dictate then Their ability to really sway the overall needle on the decisions that get made is where do they sit on the spectrum of being? Dubbish or hawkish and and Bostick you can see from Atlanta here kind of mid to slight mild hawk and so to hear Bostick saying these types of comments is quite interesting because Overall they're fairly downbeat which would be somewhat Uncharacteristic for someone of a more hawkish disposition, but just to remind you Bostick is a non-voter for this year But where does that leave us then well at the moment, you know what we've been seeing and what has been Kind of a difficult thing I think for a lot of people to get their heads round is that this is the the city group economic surprise Index and it's looking at the US in blue Eurozone And global and obviously these these economic data points that we've been seeing have been phenomenally strong outperforming market expectations But a lot of these economic data points when you look at them and how they're constructed a lot of them are what we would classify as soft More sentiment related forward-looking yet then for that future expectation to materialize Unlike hard data, which is the factual evidence then of how things performed like last month's retail sales or industrial production Rather than how do you feel about the economic conditions over the next six months? For example now the reason why that's quite tricky to Really analyze with accuracy that data or have full confidence in it is because if you were to ask someone What do you feel about the next six months? Of course, they're going to be more positive because you're coming from a such a low starting point given how Negative general confidence was back if we go to March April Even may when we're in the right midst of the lockdown when coronavirus is really taking hold and went into global kind of pandemic status So yeah, this is quite interesting and it leads us on to two different things obviously a Lot of people are still looking at certain states in America Predominantly those like Texas, California and Florida Being so important overall because they they they almost make up About 30% of the entire population of the United States of America So how they are performing how open or not their economies are is particularly key now one of the things here then that I've been looking at is the fact that You know if you were looking at the the data coming out you would think wow things are really positive Things are looking really great at this point in time however I saw an interesting note coming out of the US firm Jeffries and they said on Monday that its index of US economic activity Had clearly flatlined after two months of improvement So sure we've had this massive bounce, but what they're seeing now in the data Which is yet to materialize in the more standard. Let's say data sets is that things have started to stagnate it There's a loss of momentum in broad-based spanning small business activity discretionary footfall restaurant bookings traffic congestion and web traffic to state unemployment Portals so what they're saying then they're referring referring to data sources to update more greater frequency than official statistics To make that make more sense. You can look at if you just go on Google and you can look at the COVID-19 Community community Report and essentially what this looks at then is you can punch in different countries in the case of the US different states So what's quite interesting here is looking at these mobility changes to then try and get a greater sense of well Where are we now in order to predict then what the future data might look like? Because we're in an interesting phase. We've gone through the worst of the pandemic so far. That is touch wood We then had this quite steep recovery in Confidence and that's been reflected in markets But because of this second wave although markets aren't reacting now how is this going to alter the shape of the recovery going forward and What's quite interesting here is when you look at these mobility reports You can start to see then well look people are in this is looking at California for example people are still hitting the parks much more So the normal Grocery and pharmacy that are up slightly but retail and recreation are still massively lower this being Trends of places like restaurants cafes shopping centers theme parks libraries movie theaters these types of things You know if you look at transit stations places like public transport hubs subway bus train stations Workplaces, you know, you're still down 40 percent 58 percent So when you're looking at some of these data points and you're thinking well look things are even better than they were pre pandemic Well, actually if you look under the ground of these alternate data sets. We are nowhere near normality here And you know if you look at the other areas so Texas It's a very similar story Retail recreation down 15 percent transit down 29 percent workplaces down 56 percent if we look at Florida same case down 20 percent 42 and 53 so the point being here is I Just think we need to to be mindful of monitoring this type of information because I do think that ultimately this Graphic of these upside surprises will not last forever then at that point then does the market start to Come back a little bit why that I mean just rain in some of this kind of positivity That's been quite evident in particularly elevating the stock market for example I still stand by kind of what I said yesterday. I don't really personally read too much Into the Shanghai composite just absolutely Smashing it at the moment I don't think that translates immediately into the fact that yeah, you'd want to get long everything I think that's a little bit more isolated and particularly just given the moves from overnight You can see the market outside of ex-China starting to get a little bit fatigued by that story and China themselves looking to rain it in a little bit with a Secondary state media post to follow it up talking about the need for rational investing So yeah, they're all the main things that wanted to discuss this morning I hope that all made sense and was interesting But looking at the calendar for today We've already had the RBA and the German industrial output. So otherwise from a European perspective There's nothing really of great substance coming out today Going into the afternoon. I'm afraid it's the same case for the US not really too much going on the API weekly inventories coming up this This evening at the usual time 9 30 in London 3 30 in Chicago speaker wise You've got a couple of speakers, but none of them are really happening until later on if in London in the evening But you do have a guilt auction if you are looking at UK fixed income All right, that is it from me. I'm gonna leave it at that as I said Absolutely more than happy on this video and any of the videos that I do to answer questions and engage on the comment section So feel free to take advantage of that And I'll see you guys same time tomorrow. All right, take care and have a good session ahead. Thanks very much