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The fact that homosexual features are not overt in the majority of paranoid and paranoid-schizophrenic states leads Grauer to question Freud's theory of the aetiology of paranoia, since he considers that such impulses might be expected to break through in view of the weakening of the ego. Freud's idea that the homosexual formations are restitution phenomena depends on his theory of a regression having taken place to a state of primary narcissism. Grauer finds primary narcissism a confused concept. Instead he equates 'narcissism' with Federn's concept of 'reflexive ego-libido', while he considers that Federn's 'medial ego-libido' contributes to the formation of the ego and to feelings of self-esteem. Like Federn and Weiss he regards the primary pathological process in paranoid psychoses as the loss of the cathexis of the ego. This, with the consequent loss of ego and object differentiation, explains sufficiently the prevalence of projection. When homosexual formations appear it is because the disintegration of the ego has disturbed the sexual identifications, so that the minor one is no longer integrated into the personality. Further, it would be in accord with the dream-like quality of psychosis if homosexuality were sometimes only the disguise and dramatization, for example, in a man of his basic need for dependence.