garvia.es

General notes

Executive summary

Accounting language (read this first; bring questions next time)

Central banks (what we said & what’s next)

Risk, return, liquidity

Information, efficiency, arbitrage

Mini-presentations (2–3 students each)

  1. Weimar hyperinflation — causes, mechanics, consequences.

  2. Bretton Woods → Nixon shock — from gold peg to fiat, and why it mattered.

  3. Soros vs. Bank of England (1992) — fixed rates, speculative pressure, and policy.

Keep it concise (6–8 slides total per topic). Visuals > text.

Prep for next class

Dates (provisional)

Questions welcome—especially on the accounting basics and the market structures.

Transcripción

OK, what we were doing.
Last weekend and one day. This is our 4th day together. No 1234 first week, one day to then and then this is the 4th.
I have given you a lot, a lot, a lot, a lot of information. There are people here that came with different levels, that came from different countries that talk different languages.
This.
I feel you want to.
You are not going to believe it.
And he won.
What we have done, we introduce a lot of ideas at the end first time.
You try. First time you try to learn to drive, you feel as if it were impossible. First first time you try to learn a language being old, you feel as if this were an incredible big.
Work. We are approaching to finance and I I said a lot of words. I talk about financial instrument. Probably I will ask you what is a financial instrument. Don’t tell me a calculator. A calculator could be a financial instrument, but a calculator.
Is not what I’m thinking. Think about the financial system. We are going to go deeper today. Think about the financial system as if it were, as if it were a Lego construction, yes.
Thinking about Legos, we need bricks. What are these financial instruments? All these bricks? What is the financial system about? What is finance about? We talk about that. What is finance about the future?
Can we predict the future? No. Can we manage an unpredictable future? Yes. But then finance has to do with.
Savings. There are people, all of us. In some parts we have more than what we need, isn’t it?
And on the other hand, there are.
Meets everyone needs something. There are people that needs money. There are people that needs time. There are people that needs oil. Yep.
Savings and financial needs or let me get right needs, it’s correct the spelling.
OK.
What does the financial system do? Financial system connect?
This with this we connect saying we need how?
By using.
Financial instruments on one hand and also through institutions, several institutions. We talk about lot of institutions, first day of class, second today also how how did I start?
How did I start today’s class?
But what it was my first question. What was my first question? Wednesday, Wednesday. My first question was Wednesday. I can hear thinking about power. I’m going to spend this week thinking about power.
I’m Catholic. I’m Powell. This is my boat.
I’m Catholic, but it was a metaphor.
What is gonna happen? What Paul is gonna say?
Anyone knows it for sure?
Can we play the future? No, but anyone knows almost for sure what Powell is gonna say.
I mean, probably he will. No, probably. I am sure that he won’t surprise us. I am sure that Powell will not surprise us.
Is there a chance of me coming here next Monday saying, oh, it was a surprise? Is there a chance? Yes, there could be. But what I am, what do I think? What is the market sentiment?
What is going to happen for sure this Wednesday? The name is.
25 basic points, yes, 25 basic drop interest rates of 2525 basic points.
So.
Everyone is sure about that.
No, but but yes, no, but yes. What I’m telling is that the film, the film I’m going to show you, this one film or the film we are going to see all together this Wednesday, it’s a Rambo film.
Is Rambo, you know Rambo? Is Rambo going to survive at the end of the film? Or I have say Rambo, a romantic or a *** film?
I say **. Sorry for that, but I want your attention. Same ***. I know that I got your attention. All of us knows what is going to happen. Is someone going to die in a Rambo film? Something is going to happen in a ** film. We know what is going to happen.
This Wednesday, yes.
And this is the name of the game. This is the name of the game.
You see the point, no? What is the name of the game? That everyone that works in finance, no matter how adventured you are now at this time in Madrid, are sleepy. At 9 markets will open.
And a lot of things are going to happen this Wednesday. Everyone is. I don’t like beer, beer at this. This Wednesday, everyone will be drinking beer in front of power.
We know what is going to happen, but the name of the game is at 9, the market open, what Powell is going to say, what Trump has said and is the name of the game. Yes, this has to do with.
Central banks. Do I have talk about central banks? Where is my?
No.
I’m looking for my stockhold. Oh, yes, you are. You are. You are. You are. Sorry. I have to. No worries. In the States, these people do like this. Look. No, like this.
No, that’s close.
I don’t know if this is to work. This is to work. Yeah, whatever this is a.
Central bank, the first central bank all over the world then.
Finland, Norway, your neighbors, then Switzerland. And just because we are in Europe, someone is from France and France, yeah, and Ireland and.
OK.
OK.
OK.
No jokes. No jokes regarding anything. We should be serious. I don’t want to create a diplomatic conflict.
I have. I was thinking about institutions. I was thinking about institutions and what had happened with my head. Central banks, Central banks, Central banks.
If there is a storm, storm. If there is a storm, where you will like to be?
If there is a storm, you would like to be in a port, No. Is there a storm now? Is there a storm now? Absolutely, yes. There is a big storm. What has happened?
You too. What is the English? I don’t care about you. You. Yeah, you are. Not you. Yeah, you are the because you have.
I.
At my European. Oh, go ahead. I’m sorry.
You have Corona, but you have Europe. Corona. Sorry, you have Corona. You have Europe. Milan. Euros. This is the only one that. OK, I I will Corona last Thursday. Last Thursday.
I have euros. I’m thinking about you have what you have in your world. What do you have in your world? If you have euro, last Thursday, Christine Lagarde talked about the celebrates what Christine Lagarde said last Thursday.
2% not change. She didn’t change interest rates. She maintained interest rates at 2%. Yes, this is like a tale, like a tale of two cities. One city. What is the main duty?
Of central banks in general to maintain the inflation in 2%. What does to maintain the inflation in 2% means what central banks want? Peace.
Peace. And I’m talking absolutely serious. What means peace?
They don’t like changes. They don’t like it that if you buy bread all days, the price of bread will stay the same.
Why? Because central banks wants you to focus not on price of bread. Oh, you take breakfast without any problem and you prepare yourself for the markets, for work, for whatever other thing.
That should have more importance than the price of things that you are buying. You see the point? They want peace, peace.
Do we need peace?
We need do we need to be count? Do we need time in order to study?
But not only we need peace here, let me just say open to things.
Central Banks has to do with Monetary policy.
And also there is fiscal policy.
Fiscal policy has to do with taxes and public spending, but this has to do with governments. Yes, central banks, the state, the government, yes, taxes, definitive.
In terms of.
We need thinking about the government, yes, thinking about the government. We need stability on one hand.
But also.
That makes sense to change all tables. Need to change all tables? No, I cannot spend all the time changing all the tables, but in case one of my students is sitting looking there.
Will it make sense to stop for less than one minute telling him to take the the table, move it and letting him be in a more comfortable way? Will it make sense in terms of fiscal policy?
All we are, all we are, we are different. And what is my duty? My duty is the first day knowing about how much accounting all of you know. If you are in this level, all of you, no problem.
But if some of you are in this level and some of you are here, what should I do? Work for everyone. And working for everyone means I know that there are people here, but also I know that there are people here today.
Focus on these ones. Learning accountancy, accounting. No, I should focus on this one. But also, should I be things that are profitable for these ones? Yes, you understand that on one hand.
Thinking about monetary policy.
We have done one minute of silence. Everyone, everyone, everyone, everyone. But then are we the same?
On one hand, are we the same? Yes, we are absolutely the same. All of us have mom, a dad, and if you don’t have whatever, you don’t have a mom or a dad or you understand what I mean. Are all of us the same on one hand? Yes.
And on the other one, absolutely not. We are different and because of that fiscal policy, but this is inside the scope of my course, but a little bit out. This is absolutely inside.
Absolutely inside. Absolutely inside. Not only this is inside. Let me just say two quickly things. This will be unfair. What is the objective of both? Of both? Price stability, 2% price stability. Is there any difference between this is going to be?
In the midterm, in the final, in two years time, I will see you in an International airport and I will ask you this question. Is there any difference between, any difference between?
Central Bank aim and Federal Reserve aim, European Central Bank aim and Federal Reserve aim. Is there any difference?
What is European Central Bank A?
European Central Bank aim. All of you are with me. Just one that is.
Price stability in 2% control inflation in 2%, yes.
Home match aims. That’s Federal Reserve. That’s Fed has.
Have comments.
Dual mandate, dual mandate. Have you ever heard that that the words dual mandate? Not just prices stabilum, but also.
Anyone not just stability, but also unemployment, labour market, labour market. Is Christine Lagar concerned about labour market?
Yes, he’s that is her aim. No.
And today, I’m not gonna talk about monetary policy. We will talk about monetary policy next week, yes.
Savings, financial needs, how this connection has been made, how this connection has been made through.
Banks, banks or insurance companies? Yes, invaded or through.
Markets, yes, in a direct way. What are these three things? Institutions. Central Bank is another institution.
What can you build with Lego? Almost whatever you want. I’m in love with Lego videos in TikTok and TikTok knows it and I fall in a there are videos in TikTok look.
So sorry, there is water here. I should do something, but I will do it later. Where is Elizabeth? She’s not here. OK, she told me that’s whatever. There is water that will be here and everything. Everything is safe.
I was gonna say, have you seen slap videos?
There are videos in TikTok regarding this lapse.
I I say I don’t like them, you know, because I don’t want the to put it because I don’t like use. I don’t like it. Lego videos. Yes. What can you build with Lego? Houses. You can build a lot of things. You can markets, insurance, banks.
But then also not only you build houses, you also have Lego bricks.
You also have Lego bricks.
What is this? I don’t know if I did it in this class or not. No, in NYU it was. It was neither in NYU. It was in another. This is I have made this year. This one. I have an old one in somewhere. It’s it’s here. What is this?
A bone.
Bonds have been traded in the market, in markets, but bonds, public bonds are being issued by by public bonds are being issued by governments. Make sense? How all these connections are being made?
Connections are being made through institutions but using financial instruments. Yes, in terms of I have savings, what I’m going to do with my savings.
Deposits, yes.
I have financial needs. I have financial needs. What I’m gonna ask the bank for?
Alone. Yes, I need a house.
Yes, all of you know what is a mortgage.
Anyone does not know what what is a mortgage?
Mortgage. A mortgage is a loan, yes, but it says the loan is a loan, but in case you don’t pay what you owe credit risk, there is a house that will act as a.
Creditor as a guarantee.
Quarantee, yes, OK, deposits, loans and then thinking about there is a insurance contract, there is an insurance contract, you pay premiums, you pay premiums and then.
There is insurance contract, yes. And then in the markets, what can you buy? Stocks, bonds, derivative. And here we should distinguish between primary market and secondary market.
All instruments are being sell, are being sold by the first time, by the first time into the primary market and then once these instruments are sold are being later, they are trading that into a secondary market. Make sense.
And regarding markets, we talk, we show and we will continue talking about fixed income markets and equity.
Markets and.
Markets are also careful because they are OTCOTC.
Markets. No, not because there are not just market regulated markets, but there are OTC markets also. We can do things in an OTC way. Make sense.
Any questions?
If you have this in your head.
You have 25%. No, let me just before saying that this is half of 25%. Let me just write the other half. Oh no, I don’t like, I mean.
I like black, but I was looking for red.
What is this? This is a map of the. Let me use that. This is a map.
In blue.
In blue you have institutions, in blue you have institutions and so and in black or I have just part with black financial instruments, yes.
What is missing in that map in the picture? What is missing?
Supervisors. Supervisors. Who is a Who is the supervisor? Police. Men. Police. Women. Police. Police.
Careful. Not police in terms of, you know, Yep, police in terms of supervision. They give licenses. I want to work in the market. Should I? Who should I work talk with? SEC.
I am playing with inciting information. This is illegal. Who will prosecute me? SEC.
Here markets SEC and in Spain, in Spain SEC and this is the Spanish one. Thanks, thanks with the supervisor in.
The states faith I’m.
In Spain, European Central Bank, yes, here.
I will have you.
I will ask you. Don’t worry. I mean, it was a hard night. I will ask you who supervise markets.
You can tell me you want enemy TMB.
You all.
Pixel 10.
I was sorry. Anyone knows what I’m thinking about? I was going to tell you. I will ask about who supervise banks, who supervise CMB.
And I was thinking you can write the exam in Spanish if you want. You can write also in English. I’m thinking about the picture release. What happened this weekend Google has released.
A new Pixel 10 with a with an incredible microchip that is called tensor. What does this mobile I’m going to show you in one minute and if you write the exam finish, I don’t know finish.
Probably with the mobile, I can’t run at least right in this also happens. And what I mean is talking about institutions, I am not looking you to to to say Federal Reserve. I’m not looking you to say Bank of Korea.
I’m looking you to understand what I’m talking about, yes, and what about it is, who knows?
Who knows?
They say nano banana. Who knows nano banana? You don’t know what I’m talking about? No one? No one? Nano banana?
No, no, no. Please. There is my mobile. Yes. So quick. So quick.
Oh, wants to talk with me.
No, no, no, no, no. No one knows. I have asked who knows this subject. I teach one students that study maths and artificial intelligence issues or one master regarding and I ask them who knows? Nano banana.
Oh, I’m looking for the TV banana.
No, I think this.
Here, yeah.
No, no, nice. Anyone knows Gemini?
All of you. Anyone face a Gemini? Anyone does not do not know what I’m talking about. OK, Nana, Banana is one layer.
Over Gemini that has to do with images and it’s it was it has two weeks, 3 weeks time. It has three weeks time and it was incredible. Why? Because if you ask such GPT something regarding images.
GPT modifies the image and nano banana maintaining the same image. Do think sober is like working with a Photoshop nano banana, yes.
Now the banana has three weeks.
Now the banana has three weeks time.
And.
I have discovered this weekend.
Seed dream. That is the Chinese response, the Chinese response to nano banana.
That is the Chinese response, Sidrin. It’s Chinese and it’s better.
It’s better.
What I’m trying to say 3 weeks ago there was something incredible new and in three weeks time this thing regard this thing that was incredible new now is all there is one.
New incredible Chinese team and everything is going so, so fast. What Google show us this weekend? What Google show us this weekend? Let me show you.
Hi, Karen. Can you hear me? Does this work?
OK, this is really cool. I can’t believe how fast it works.
They tell you the incredible news I just heard.
For the first time, Google Pixel 10 will be available in Mexico.
Thanks so much, Karen. Hi, Karen. This is the week. This has happened during this weekend. What? What makes the difference with Pixel 10?
This is this change of language. Yes, this translation did not happen in the cloud. Did not happen in the cloud. It happened inside the mobile.
In tensor in the microchip that is in the normally if you ask something at GPT where all the work is being done in us central process data that is far from the mobile, you understand what I’m saying.
Pixel Pixel 10 incorporate this process inside the mobile. Yes, this is from.
Two days ago. This is from two days ago, but I was telling you that you can write this in English or in Spanish and what I thought and in two days time you can write it in Finnish, in in Sweden, in whatever.
Things are happening.
At an incredible, incredible high speed.
And now, now is the lowest.
In weeks time, two weeks time. This is we are slower than the speed we are going to have in one month, in two months. You see what I’m saying?
All of you should know nano banana.
Not really, not really, not really. But all of you should be aware of what is going on. Absolutely, yes. And what all these things?
We do in our brain, you know we should chase or mindset. We will talk much more about this, but this has happened this weekend.
This has happened. I mean, I’m not sure if this has happened this weekend. I have. Yes, show it and share it. Show it and share it.
Why I so we can share it? Because I prefer my students dedicate time in order to analyze it and just myself looking at it with my own mindset.
Let me and there is another more point. There is another more point, another more point.
That has to do with.
Thanks.
OK.
That has to do with Mexico.
Who’s this?
Where are you?
It’s OK. Oh yeah, you are Mexican.
Who cares about Mexico? It’s a joke. Who cares about China? Who cares about what I’m talking about? I’m talking about globalization.
I’m talking about an incredible huge market. What Google is doing here in these days, what Google is doing.
On one hand, defending on one hand.
defending, and on the other hand, attacking.
And on the other hand, attack, you understand the point. OK, more things quickly, quickly. This is a quick summary of what we saw last week. There is what are there. I don’t know.
I don’t know. I need for next week or next. I don’t know if it will be Monday or Wednesday, yes.
Three groups of two volunteers, just in order to present one little thing. You can bring your slides. You will explain us three different topics, yes.
I need three groups of two. I’m going to take the list. I’m going to. There is the list. I’m going to go quick. Anyone can borrow me a pencil.
I prefer expensive, but if not, it is not oppressive. There is. Oh yeah, let me.
I have read Edward. Oh, thanks. There is some. I don’t know where he is. I don’t know.
Now, Lanson, yeah, I was looking for the one.
Where is he from?
No way. No. And and you see that this is the oh, I was looking for. So I love this guy. He right. Also Larson is.
Oh, sorry, sorry. The one also he died. No, he passed away. He passed away. And Carson Swedish.
OK, but this one is alive and he write in his books. People die and all this stuff. Sorry for this. I need three more, three groups of two volunteers, yeah.
Sorry for this champ.
I don’t.
Abigail was.
Adam Randall, Alfonso Ruter.
Oh.
At least.
Alice.
Yep, Amy.
Aryan.
Audri.
Claire, Claire Dugan.
Konur.
Dustin, Dustin Greenwood.
Yes.
Elizabeth McLean. No, I think she’s not here. Eva. Eva Castello.
Francisco Salacino.
Francesco, no Italians today.
No Italians, Frederick, Yeah.
And.
Gordon, Stewart.
Grace Morgan.
James Lesney.
This is me, James.
Uh, you mean? Yeah.
He said yes, loading strain loading.
No, this is from Tulane. Whatever. Oh, so.
Austin.
Logan Williams later.
Ariel.
Luke.
No, no analysis. No business in Spain. You are business in Spain, no? Yeah, I mean, this is financial market, but this is no, no, no, no, no.
Sorry. No, don’t worry. DA, if you want to stay, whatever. Natalia de la Plaza. Natalia.
Noah.
Olivia, yeah.
Ria, yes, really.
Robbie Stein.
Jim Kim, Simone, Simone Beatrice.
Sophie Brown, Dalia Truska.
Victori. Victoria. Victor. Victor. I’m on the way. Victor. Jason.
No, no, this voice is from short. Yalan. Oh, Yalan pass up. No, she could come back. No. And Daniela. Aser. Daniela. Perfect.
OK, anyone could be two people or three people even. OK, Ariel. Let me Ariel. Ariel Anger.
Anger.
Eva Eva Eva Eva Castello Castello.
The Castillo OK, I need two more.
Two more groups.
Two volunteers.
You’re on the British.
Young.
You together? OK, I have a good topic. I think I have a good topic.
I’m.
I.
Who is near you? Elise, you do better.
Alice, I I want your consent. Perfect. Alice and Olivia.
Great. Perfect. Let me.
Uh.
All of you are, oh, oh.
Both of you I was not thinking about.
My thought has to do with finance, finance, markets and I thought, I mean I am not so quick in order to.
Holding your solos break, England. Sorry for this. I mean, I was thinking about you, then you were sitting next to me. I don’t want to create a diplomatic conflict between solos, the States and Bank of England, but I want you to explain to us.
How did George Soros broke the Bank of England? Yes, as I will give you all, I mean we will talk before and it has to do with monetary policy and we will review history of monetary policy.
Two different items and I want you to explain this. You will be the last one, yes and then.
Who feel? Which one of you feel more close to Europe?
OK, OK, perfect. You will be the first one, the first group to talk. Probably it will be, I don’t know, Monday or Wednesday. I don’t care. I will talk before and you will talk about German high very places between the First World War and the Second World War.
Nazis came to power, but before Nazis, before Hitler came to power, there was hyper-inflation. I want you to explain us where hyper-inflation came from. I want you to put slides.
With pictures, you can Google picture with the hyperinflation and increasing pictures and I would like to start talking about not just inflation, hyperinflation. That is something that can cause a war.
Can cause people by this and I love probably not. Which one is the what?
OK, I love history.
I know history. I’m talking about history in terms of love regarding Second World War and all this disaster, you know.
It’s not correct, yes, but but a lot of the things we will be talking about in this class are due to the Second World War. Second World War is absolutely important. We are not going to talk about the Second World.
Where is European Central Bank? In Kanpur? Where is? I didn’t have German people. No, I didn’t have German people. But where is in Kanpur? Why the Second World War happened? Because.
It was, I mean, because it was after the First World War, it was after the First World War. It had, I don’t know if it had to happen, but it happened due to a lot of causes. Yes, invasion was one of these causes. What had happened?
Just after what happened, just after the Second World War, United Nations was created United Nations.
Israel State have you had about Israel was created immediately after the Second World War, International Monetary Fund was created and also.
Agreement. I want you to talk about agreement.
Was Bretton Woods agreement that is gold standard. Everyone agreed with the gold standard and when Bretton Wood agreement was broken with Nixon and with Nixon, with Nixon and Vietnam War.
Oh, I do have a Vietnam War.
Yes, you can work. Yeah, students, I know that you have. I have asked Norway and Himani. They have heard about.
In Vietnam, I was the last people from outside space.
And Vietnam, Second World War.
Why I am being so careful. You know why I’m being so careful. You know why I’m being so careful. What has happened between Second World War and the other war? What has happened?
In terms of what?
Anyone knows what I’m talking about? Second World War, Second World War, Vietnam War. What happened between one war and the other one?
What else? What else? I mean, Second World War Phoenix.
But the war didn’t fix. There was a rebellion war between.
From this side of the restaurant, I don’t. I don’t want to put that. I’m a label, but there was the Cold War. Have you heard of the Cold War? And the Cold War happened first in Korea and then later in Vietnam.
Not today, not next day, but for me.
Understanding Korea. Sorry for what I’m going to say, but it’s as I feel Korea, all Korea, where you can see, oh, in the 50s there was just one country.
And from that point there has been two different countries evolving in two different ways and you can see the difference between North Korea and South Korea.
Let me show you one quick picture. What do you say? Either Peninsula. What do you say? Peninsula. Peninsula. You know that? OK, you know that.
Let me.
Hi, Lydia. Sorry.
Yeah.
Oh, I rumbled them.
Yes.
Oh.
This is China. This is Korea’s peninsulas. This is North Korea, North Korea, South Korea. And then there is the parallel 3838 parallel 38 is where is divided North Korea from South Korea.
All of you see that this is a peninsula, no? Let me show you a nice picture.
This is should Korea.
And I promise you that the land and this land is called North Korea. But if you see this picture at night, that’s the East Lucas Peninsula.
What does this look like look like? This look like a nyler.
I’m talking with all.
I’m talking with.
You see this picture? These are two different countries nowadays. These are two different worlds, but in the 50s it was just one country.
Um.
Sorry for what I’m going to say and I get to say what I was going to say. Where would you prefer to be?
In a place where there is light, or in a place where there is not light?
This is what I I prefer to leave. I mean at night. I at night I like to turn up the light. I like to turn off the light, but because I want, I I don’t want to be. Do you see the point what I’m saying?
Before Vietnam War, there was Korean War. We will talk about that also, but.
This is.
For me, the rest of you to understand this is important. More even if we have Korean students among us or as if we have got because why? Because at the end.
We can argue, oh, this is, this is a picture. This is a picture from the state from. I mean, this is not a lie.
Do I have drop water here? Yes, this is true. You can come and see. You can come and touch.
I’m not talk. I’m. I’m talking about politics. I’m talking about ideology. I’m talking about economics.
Yes, yes, yes and yes. But I am trying to do this with facts, with facts and and OK, let me come back. So, so at the end.
At the end.
Only the annalies before the Second World War, German hyperinflation. Then Daniel. Eva. Eva. Eva. Oh, sorry. Eva. Eva. Eva. Anariel.
From the finish, from the creation of Breton Hoops that I think is 1947. I don’t remember. I don’t know if it’s 19479046 human rights 90 before the 50s, between the 446 and the 50s, a lot of things happened.
Lots. A lot of people were working, trying to avoid, trying to avoid a new one. And then once things were calm, sodas.
Why is this? Why I like this Soros? Because it’s amazing what Soros did. It’s amazing. And then the history regarding Bank of England is the history regarding Europe. It’s a part of European history.
And it’s a part of how is this part, this history has to do with how the euro was created, yes, and understanding euro. You are in Europe now, you are in Spain. So it’s part of what are what we are going to see. Make sense.
OK, financial system, what are we going to talk about today?
The importance of information arbitrage.
And then we will talk about competences and media.
We talk about informance. Can we predict the future? No. Can we manage it? Yes. Oh, oh.
With information, the more the better information with both.
There we got blue, we got maps. Make sense.
Let me ask one question. Do all of us have same information?
Well, if I say the pass, the pass. Anyone know what I’m talking about?
You anyone who knows if I say don’t, don’t say a war. Don’t say a war.
Do you know what I’m talking about? It has.
Yes, you know, you don’t know.
OK. Yes. If I say peppers, you know what I’m talking about. You don’t know what I’m talking about. How do you, those of you that that don’t know what I’m talking about, how do you feel?
You feel a hole inside of you because of this lack of information. Do you feel that, oh, I don’t have the information? You understand the point, all of you that?
You know who is there? No, I’m gonna show you.
And yes.
I’m just going to show you 10 seconds and I will ask you again the same question.
Sorry for this, what is coming this work?
10 seconds.
Now.
Who knows papers?
Hey, more than 1/2, but I’m trying to explain you.
Not everyone has same information. Not everyone has same information. Information is asymmetric. What does asymmetric means that there is one part.
Of the population that has information and there is another part that doesn’t have, yes.
This has three years, three years. Rally, you won’t hear this music in a disco again for this. Have you hear any one of you have heard this this weekend? I will make that note.
I will never know.
I have, I have said bias, bias. I have said everyone should have heard this. There is a bias.
That is Abayas.
Because of you also let me.
Uh, let me.
Sorry for the sorry, sorry, my audience students. Sorry for what I’m gonna do.
Sorry for what I’m gonna do.
Sorry for what I’m going to do. Everyone has heard this. Everyone let me just.
I need your help.
They are red, blue-green. I put TikTok and I get hypnotized. They do like this. They dance. Who are they? You know what I’m talking about?
There are four guys that they start dancing.
You don’t see TikTok. I’m. I’m so happy I’m worse than sorry.
By Lando.
No.
One week ago, I think.
No, I don’t know. Are these ones. No. Do you know them? She knows them, obviously. No, I’m not talking about this one. Sorry, I don’t know.
Uh, so.
If you cannot find it in less than one minute, stop it. OK, let me show. Let me.
Let me show you this one.
All of you have heard this.
This is a Spanish, a Spanish. Sorry for having done this to the war, but.
What I’m talking about, I’m talking about information. I have to start with the past, then come and start, then my car and the question I am repeating is does everyone have same information?
It’s not a matter of yes or no. It’s a matter of a scale of grace. Yes, scale of grace.
Regarding macarena, everyone have her macarena, everyone.
Every all over the world regarding macarena, regarding Gangman, Gangman side, I will get that. Yes, I will get that everyone all over the world, yes.
Look what I’m doing. I’m looking to everyone, but if you get from today, I will not look as fast as you then. I will look to you or Korea or my Europeans. Yes, they pass. Not everyone.
All of you know what is an ETF?
EPF. Oh, ohh yeah, EPF, yes, EPF.
Black Rock. All of you know Black Rock. All of you know backward.
American citizens, all of them are saying yes, yes, yes, probably European citizens, not as much as about Latrobe is like asking about the Norwegian.
They’re so very cold. Black group holds an incredible or or yes, I I heard about. I thought black group. They’re so very home.
Then I I think about your central map. Oh sorry, my head closing assets under management, assets under management while I have published this morning in Lincolnin.
This morning, let me see how this is going. Let me see how this is going. I am an addict. Oh, no, I have. I’m an addict.
I’m analyt and I need to see.
I need to see my.
Oh, here.
What it is? Uh, sorry.
So quick.
OK.
This is me. Sorry. Hello.
It hasn’t arrived to move it yet. I have families this morning. I have families that that rock has, that rock has.
Savings financial needs. There are ETFs that are issued by Black Rock by Bank Workers and Black Rock has assets under management.
12 trillion and if you take 10 biggest asset managers, they have more than more than 40 trillions under management. That is an incredible big amount of money.
But coming back.
Coming back what I’m talking about.
I’m talking about information and the question I’m going to ask who all of us, who all of us have.
Same information.
I don’t want you to get an answer. I want you to focus on the question. The question is one of the most important question for financial markets. Do everyone has same information?
Again, don’t say me, don’t ask me yes or not if the answer.
Where the answer? Where? Yes.
The markets will be efficient.
If the answer is not, then we should see this lack of efficiency, this lack of information, and then there is an efficiency. Are markets perfect?
Aren’t you perfect, guys?
You are perfect. Oh, you know you you never make mistakes. You are putting a little deep bread.
Great.
Great.
You are becoming great. Do you make mistakes? And you are not perfect. Now is are markets efficient? Are are you perfect?
OK.
Are you a disaster? These are not the correct questions. Asking if a market is efficient is not the correct question. But this is thinking about the efficient market hypothesis is the correct question. But but thinking that markets are perfect or not is not.
The correct oh.
Describing people, describing people in terms of perfection is absolutely correct. You understand the point. What should be the correct question regarding people? The correct question is not if you are perfect or not.
The correct question is what happens when you make a mistake and what happens when you make a mistake?
What happens when you make a mistake? Here in class, you make a mistake. What do you do? You learn. You learn. And what does learning mean? By learning, we become better.
By learning will become better. Make sense.
And the current question regarding markets is what markets do when there is an inefficiency.
An absolutely important work, what markets do when there is an inefficiency.
Arbitrage. Have you have all the arbitrage? Have you have all the arbitrage? Arbitrage is a French word. Arbitrage. Europe. How do you say arbitrage in French? What am I mean? How do you say arbitrage in French?
Arbitrage. Yeah, I can. I cannot say the same way you do it because you are friends with arbitrage. In Spanish we say we call in football, in soccer.
We call the one with the. I don’t know how to say it the referee. We call it arbitro. In Spanish we call the referee arbitro. What is arbitrage?
What is arbitrage?
There is a lack of information. Yes, I make a mistake as a as a professor. I make a mistake. Yes. And what’s your name? Austin. Austin. Austin. Austin. Austin. Austin. Austin. I make a mistake.
And now see the date, the date and I am mistake. And now see say, Louise, you have made a you have made a mistake, yes.
Austin do two things at the same time. On one hand, he gets a profit for himself. Oh, Austin, I like you and I’m going to put a positive, but at the same time, Austin.
It’s working for the whole class, you see.
Why? Because thanks in the mistake he has detect the whole class has better information. Make sense.
What is arbitrage? Arbitrage has to do with inefficiencies. Once you detect an inefficiency, once you detect an inefficiency, you can do two things at the same time. Once you detect an inefficiency, you do two things at the same time.
Money, money. And at the same time you are making markets more efficient. Make sense.
Next day we will continue talking about this. Next day we will continue talking about this. Let me just introduce, we say, oh, the 22 there will be the midterm probably will be the 22nd.
The 22nd of October today’s.
50 No, I don’t know which day is today. It’s 50, but we have time. Any questions?
Okay, next day we will start with the efficient
Market hypothesis. I’m going to finish 3 minutes before because I I want to go to the to the bathroom and take something in order to all the water that I have thrown. Next day we will talk about the PCM market hypothesis. We start from zero.
And tell me, is our exams next week 27th now October?
One second. Don’t that. No, I don’t want you to. So next day we will continue talking about arbitrage. What is arbitrage? Information. And we I will ask you what is information. There will be 3 levels and we will see. Yes, don’t talk. Don’t step over there.
Pause.
Oh, sorry. Oh, no. I prefer you to keep it in order to continue with this. See you. Thanks a lot. See you.

Luis Garvía Vega ha detenido la transcripción