the most basic human emotions
dictate your economic decisions
I like to buy I love it and you eat or
we are rational calculators that
we watch over our interests and only
it's like believing that pigs can
fly an implacable scientific debate
with consequences in the real world
talking about the speed at which it is
changing the 2008 crisis to the market
almost the world economy crumbles a
million in investments spoiled
the crack is very important it does not have
explanation in the discipline of
economy is an insult an insult without
foundation a series of experiments
incredible reveals that it was not any
surprise was promoted by the
psychology our behavior
it seems strange when it comes to
money is a force is irresistible
but not everyone agrees
the realization that people feel
and suffers does not mean anything I have
open material that is the price that
happens when two forces collide so
powerful with the feelings follows
moving the markets
Music
well prepared we are facing a
innovative experiment that questions
all our ideas about money
who wants to bet on the auction of a
20 dollar bill one dollar
eidos dollars someone said 23 of
Knight of the Background 4
someone says 5 today 2 556 the rules
are very simple the highest bidder is
will take the $ 20 bill but
there is a cat locked
the second highest bidder does not take anything
but you will have to pay the last
amount that you have wagered
I've heard 2020 it's surprising two
bid participants well above the
nominal value 26 26 27 27 at unah 28
28
someone says 29-28 the one because
would happen to someone over 20 dollars
for a 20 dollar bill 20
dollars sold for 28 dollars at
Sir.
a group of scientists called
veja violists believe they know the answer
now is when it comes out and closes again
point to that when it comes to taking
decisions related to money
lamented is irrational
we have observed a great variety of
Ways to get away from rationality
people do not use the information
that they say they should
use instead in the other
information that they had
seemed crazy used to measure
the temperature of your skin
the notion that people can
behave irrationally when there
money through
maybe it's not a radical idea without
But he questions the philosophy
dominant economic that has conformed
business and state policies
during the last five decades
the intellectual core of this
philosophy is found here in the
university of chicago of this campus
more Nobel prizes have come out
economy than of any other
institution in the world almost all
they share a basic reasoning
when it comes to money
we are enormously rational beings is one
of the great advocates of this idea
is to follow and to want the theory more
supported that exists and that I believe that
is the most respected of the sciences
social is that of the economy as a
rational behavior theory from
an individual level and that's the theory
more reliable what is the
economy john copper teacher of the
University of Chicago is another great
follower of this rational model of the
economy as we do it in the first
instead we focus on people and on
how they behave in their behavior
or here they want how he gets it
this model came to light 200 years ago
years of the father of the economy
Adam Smith in his book the wealth of
nations is of initial form of
address the economy remember how
newton and galileo approached physics
I treat some of the basic ideas and
that for example that people who
they watch over their own interests fit
perfectly in the markets can
generate fantastic results
So what did Adam Smith mean?
with a rational behavior and that
watch over your own interests
think of an average citizen today in
day is continuously calculating from
what form can your wealth increase
Adam Smith said that rational people
and then there is what is a very
limited rationality
before making any purchase that
The average citizen calculates exactly
value of things whether it's about
take a taxi or buy more shares
his goal is not to have to pay even a
cent more than necessary and although
has feelings
they never deviate from their own
financial interests for adam smith
the individuals that behave in a
rational constitute an invisible hand
that keeps the economy stable
world but Adam smith did not eat everything
getting some conclusions that results
very modern and over the years
the economists have been modifying but
he contributed the original vision have
elapsed two centuries and the economy
it has become a discipline
rigorous once the
organized behavior markets
in which people interact
we will understand the predictions that
formulates that model for the facts
MUSIC
now it is possible to see reflected in
precise mathematical equations the
smith's ideas about how the
rational people make decisions
financial after the second war
{0}world.{/0} {1} {/1}
if you wanted them to take seriously you had
to argue everything mathematically to
principle the economy consisted of
study the decisions made by the
valuable rational people for
try to get rich and now it turns out
that it is possible to suggest a way
smart to translate it mathematically
today these mathematical models
they are the main tools
used by economists to give
way to the policies that affect us
all from interest rates
marked by the government at the levels
of taxes or even the loan that
Can you give us a bank
critics of javier istes consider
that these models are leading to
extreme the approaches of adam smith
brad pitt has forged the idea of
that people do the calculations
endless with some databases
immense the main model of
consumer behavior gives
for sure we never buy anything without
calculate the consequences that you can
have for example in our fund of
pensions and we are good at
math we use types of
interest to compute what will be
our degree of enjoyment after a
purchase and that comes to that means that
I have interest rates in my head
that's what I mean with the models
they need a coherent response from
all individuals
National economists recognize that
deep down people do not realize these
calculations but it has a way of
protect yourself well-known the theory of
as if textbooks win today
about economics do not say that people
behaves like that they say that people
it behaves as if they were doing it
We are assuming that in the world
real people really do those
calculations
it is simply say that they behave
as if I did
the economist leaves violist richard
tyler is not entirely convinced for
defend this theory of economics
the experts established a
comparison with the big players
of villa
they may not know anything about physics or
trigonometry but they play like it's
on the contrary it is ridiculous
let's make an easy hit
I probably get it right
an expert is able to do it and I
as well.
but suppose I want to put that
ball in this hole is
trigonometry and I know the angles
who needed an expert would not have
no problem but for me it is a
very complicated blow
Music
or almost most of the time not
we are expert players of villar
when people face big
problems makes failures within
all national models are
finds unwavering faith in the
free markets
Music
the idea is to keep the
interference of standards and
government both in the daily market of
consumption as in the giants with
Wall street markets
national economists believe that the
increase in wealth around the world
during the last 30 years
it's a triumph of free markets in
instead of billions of people
they got out of extreme poverty
I mean to have only one
dollar or two a day
the agent got out of the
poverty that is happening wall street
then the 2008 crash occurs
investors claim not to have seen
nothing the same
the bags plummet more than 40%
down jones runners watch
stunned the figures is not surprising
the financial agents comment that their
customers are nervous and expectant
to see how far down to the bag and
Seeming financial behavior
and rational is the order of the day
let's analyze the speed at which
the market is deteriorating
destroyed 14 trillion dollars
invested by Americans has
been an aesthetic here on wall street
the danger took over the markets
the bag has suffered one of its worst
days in many of the agents
financiers should imagine what in
another time it would seem impossible from
the great depression we have not seen the
indeed
the global economy stagnates I feel
chills when remembering that suddenly
everything stopped
the consequences would be unimaginable
Hungry wars or high conflicts
unemployment rates
we are analyzing the banks
electronically the world go back and
hacienda night maybe more chaos
seems to scuttle several decades
of economistic thinking
most economists do not
I had predicted what a blur
for the economy and a negative point
for the markets
this market has taken five years in
climb now has dropped 40 percent
in a week with the crash
the crack that separates the rationalists
of Javier's lists is made more
large
we are talking about an armageddon
financial
that collapse is very important
because a lot of the behavior that
we came to him he does not have a
explanation in the discipline of
Economics
I'm sorry but it's an empty argument is
an insult an unfounded insult
I do not see it as a failure of the
economy but you need a head of
Turkish and economists have always been
the scapegoats are
used to see who is right
we are rational with regard to
money or maybe our feelings and
our psychology play a role
much more important than what
we thought well let's start with the
Game
let's start for example from the auction of the
20 dollar bill sold for 28 a
dollar that today 22 23 in the world
rational nobody would pay 28 dollars for
a 20 dollar bill 5 for the
66 horse pay more than what is worth
something can not report any interest
financial to nobody
this auction is a key experiment
for the economists of javier lists
is designed to be a trap and it is
a trap into which you fall voice do not think
a couple of steps ahead 11 11 12
what makes bets do not stop
up is the emotional desire to win 14
15 15 oy of 2020 and the fear of being the
loser makes the bets go up
even more 23 24
and then you play to see who is the
more chickens 27 27 828 20 dollars
sold for 28 dollars to the gentleman and
you 27 dollars
there is none of those present will want
Play again
Music
this auction may seem like a
situation very far from day to day
but the people who are outside the room
he would behave so irrationally
We have asked the buyers of a
mall that they would prefer
receive $ 100 within a year or
102 within a year and one day I stay
with 102 in a year and a day at 102
Dollars
one day I 102 could expect a
day more
I am I agree the difference is
minimum I 102 in a year and a day
as of today everyone has taken the
rational decision is a day later
of a year waiting and in the ejido the
greater amount then they have been
asked what would you prefer 100 dollars
today $ 102 tomorrow what the
majority constitutes the choice
rational that they would have responded to the
100 dollars right now I 100
dollars today the 100 dollars today I the
100 dollars today the desire for a
immediate reward 100 dollars today
wins the game to your interests
Personal
there is something called the present bias
and is that if we have the
action of having something immediately
It becomes a great temptation
according to the economists of javi edges
this bias could explain why
we save less than we should
in addition there are other psychological forces
that influence our decisions
Music
We have a bottle of wine here
the following experiment is asked of the
students who bid for a bottle of
came the rationalist economy suggests
who calculated their value carefully
but before starting the bid they are
ask them to write on both of their pages
last digits of your card the
Healthcare System
surprisingly coincides that those
who bid higher for the bottle of
wine are those whose last two
Social security figures were more
high without realizing they have left
influence for a child totally
irrelevant from network offers example
perfectly illustrates the anchor are
mambo people will remain anchored in a
any random number like the
last two digits of your card
social security is a force almost
irresistible is this kind of
experiments lets you see cracks in
the budgets that underlie the
rationalist economy lion
economists deal with people in the
real world and a difference between the
laboratory and the real world
these experiments are very interesting
but to what extent is it possible to use
the data we get in the
laboratory to understand how it
involves people in the real world and
then we should check if these
data explain the phenomenon has happened
in the world market
for some economists how crane does not
it matters if the individuals
Sometimes they act against their interests
financial resources, as long as most
act rationally with money
most of the time there is no other
where this concept is more
important that here in the bag of
new york where the financial agents
buy and sell shares
Music
their decisions make prices
rise and fall creating wealth for
some investors and losses
financial for others
richard rosenblatt has been 30 years
practicing here as a stockbroker
ok we leave it there grace reds
Be careful.
when I started the technology it
practically reduced the lights and
phones and yet work
it is still the same to try to anticipate
the following movements of the bag
in the next seconds or minutes and
make your business decisions according to
the changes that occur and if I have
reason and bought an action before
another person deciding that that action
is below its price
get a benefit
nowadays the stock exchange is a
more link of the immense machinery
global financial markets
technology facilitates the realization
of transactions around the world
changed two dollars with profits
we have 15 purchase
the company nike trade and is one of the
that more presence has in the parquet
of all the world
the agents buy and sell everything
foreign exchange and commodity shares
like gold oil
I have open material that is the
price 8 dollars 2 above sells and
As suggested by Adam Smith
the agents compete here fiercely
to accumulate as much as possible
of money for their clients and for them
themselves.
you want to win and everyone moves us every
day our competitive nature
As the day progresses, the
tension and noise of people
I'm not very excited and I see someone
next to me who is busier than me
and that makes me put the batteries
ask the final amount that the
uncle of the 38,000 has gone up 50 of xm
for a buyer 23 90% why is it
important what happens in places like
this
Most of us use products
financial as mortgages mutual funds
the companies that sell us these
products invest our money in
the financial markets to get
more money
(applause]
Music
if financial agents get
benefits for these companies
then they could offer us mortgages
cheaper and higher profits in the
funds
the result a matrix of money that does not
interconnects everyone
It is built on a model
economic that says that much of the
time most of us and the
most of the agents we behave
in a rational way but and if this model
of human behavior was wrong
the shares have reached maximums today
It's the best dow jones day in years
everything indicates that in 2005 the economy
successful rationalist
the times are favorable, they are from
several years ago there is a market
very powerful real estate
Many believe that this boom will last
the profits have multiplied almost
for eight our economic horizon
he had never looked so prosperous
who is inside the market
real estate vigo a kind of fever
of gold
the economist robert shiller is shown
skeptical people gave me the impression
that there was complacency and a great
feeling of normality as if it were
impossible that it was a mistake
believes that the boom is a mirage
meanwhile the real estate market
has reached new heights and prices
never seen
there is something that concerns you specifically the
housing housing prices
have been climbing for several decades
6% rhythm per year
in 2005 the increase in some areas was
of 25 percent were anomalous data
the idea that the price of housing
would not stop going up he made people
I thought I had found the best
investment of all possible
thousands of people have approached this
exhibition with the hope of learning
to turn personal wealth into
investment they have made or furniture
Robert Shiller believes that the United States
is being panicked
irrational July has been the month more
fickle story I told him a
probable correction to the downside what
it would cause a huge financial collapse
great that same summer alert about
the possible dangers
the economist Robert Shiller has just
pull out a new book titled
irrational exuberance
we have entered into a kind of state
mental in which we are excited because
prices rise steadily
this is called irrational exuberance
national economists ignore their
warnings that means exuberance
irrational is a beautiful neologism for
talk about the situation in which the
prices are higher than you
Schiller thinks they should be big
boats is a friend of mine and is a pessimist
recalcitrant about prices is
MUSIC
the debate about whether the
rise in the price of housing is the
result of panic or a calculation
rational yesterday candles were not being
irrational the salaries will be each
lower times
just as the interest rates took
a rational decision about everything
thinking that prices will continue
increasing over time
financial institutions share the
certainty that the price of housing
continue to increase offer mortgages
unusual to date and the
main responsible for the country
they show their optimism
Music
the American economy has suffered
similar episodes previously without
experience a reduction
significant in the national average of
prices of housing prices
of housing have increased close to one
25 percent in the last two years
this increase reflects the firm
low economic fundamentals
this trust is not simply a
shared hunch but that is
based on the models of the economy
rationalist widely accepted it
elaborated thinking that people
would act as a calculator that
he would study his income and the risks
who would seek balance in 2005
the economic models start from the
idea that consumers calculate at
detail your mortgages
economists believe that no
we should worry about people
get into mortgages up to 95 or the
100% or in risky mortgages because
they will only be granted those mortgages
if they have done all the calculations
relevant in place as the
prices increase many consumers are
they add mortgages that they can not afford
and get into debt based on the assumption
increasing value of their homes
(applause]
how is it possible that there were so many people
willing to take that risk
Music
researchers from the University of
stanford have a possible answer
initially his investigation did not
it has nothing to do with money nor
they are even carrying out some
economists
Music
a group of psychologists employs some
powerful brain scans for
explore the mysteries of the mind
human especially emotions
I started to investigate the brain because
he was interested in emotions and had
that there is something that will allow us
control gas
the bryant psychologist that they are not
proposes to discover to what extent the
emotions affect an old area of
our brain that we share with
many animals even with the
lizards the further down you
find the brain area
further back in time we go back
in their evolution humans still
we have these subcortical areas in what
deep brain
this part of the brain is named
of nucleus accumbens and is activated by
the most basic human needs
for survival has a lot
sense that natural rewards
like food or active sex in this
circuit that drives you to try
get those rewards
this part of the brain plays a
crucial function in cases of
Drug addiction
moved by curiosity bryant tries
find what other things they can quote
as much as the possibility of
get sex and drugs
so he asks people to
I imagined that you are about to receive
money as soon as we start mentioning
the money
we detect a very reliable activation in
these circuits of emotions made
that meant that said
circuits were not only activated before the
sex drugs and food but he
but the money also I got it
and with great intensity
it is possible that the fact that a
old area of our brain that
active because of money explained that
some of the frantic
agent behaviors
financial and consumer
during the real estate boom
Music
the increase in the price of housing
is an example of a phenomenon called
speculative bubble according to which the
prices of a financial good are
they shoot suddenly and increase
non stop
Robert Shiller believes that what
fosters is the emotional enthusiasm what
what happens is that as the
bubble every time more people enter
she and they do it moved by envy
of those who boast without any
shame saying I won more
money that you with your work in all the
last year for a while one thinks
it can not be but then it trains you
the best I was wrong
maybe I should do it too
and the real engine are the emotions
human
this link with emotions is what
that makes many economists
nationalists reject the idea of
bubbles
Music
before I thought I knew the meaning of
bubble word but I think that I no longer
HE
I canceled my subscription to diego no mls
because the word bubble appeared three
times on each page and I think it's
totally free without meaning
the bubbles sound like something innocuous but
the financial journalist and sting fox has
studied its history and has discovered
what happens when the first
financial bubble affected something
totally unexpected in the decade
1630 and the Netherlands
people bought and sold bulbs
tulips a true madness was lived
hundreds of craftsmen closed their
workshops and there would be business
florists how he called himself
in the background they were merchants of bulbs
of tulips that constituted a
true financial market
the price of the principals of the
the Netherlands increased to such an extent
that a bulb that bread came to
have a value equivalent to that of all
a house for three years the price of
the tulip bulbs increased from
exponential way until doing it from
exorbitant way some writings
they collect that almost half of all
income of the Dutch economy
came from trade related to
the tulips for many historians
that was the first real example of a
financial bubble even if it were about
Tulipanas people bought them but not
because they like tulips but
because they believed that the price was
going up and they could resell them to a
top price on February 5 thousand
637 nobody wanted to buy the octopus anymore
expensive from the netherlands and between
investors in tulips spread the
panic broke out at that moment because
the prices started to fall followed
falling and then one thinks already I knew
I that tulips could not be worth
so much better that I leave here
sooner and then the whole world what
leaves and the great calla is produced
prices plummeted and the
most relevant citizens are
they found in bankruptcy
it took a whole
generation so that the economy
Dutch will recover
since then many have been generated
bubbles and there have been many
crashes the most famous took place not
does so much
the year 1929 began with optimism the
prices of the stock market takes
many years of continuous increases and in the
year 29 the rebound was noticeable the
1920s decade was a great decade
from the economic point of view the
economy was buoyant
the industry also and towards the last
stretch the financial markets let's say
that they went from reflecting is the only one
practically create it
the boom spread everywhere to
the end of the decade there was a
feeling of a new era
the most observers talked about
Febrile emotions when thousands of
investors paid exorbitant prices
by the actions of the so-called crazy
24 years old
the stock market witnessed the
development of a huge bubble
many people thought that there would be no end
but then on October 29 the
prices plummeted suddenly and
began to breathe an atmosphere of
tension and from me to more than 9,000 banks
Americans went bankrupt
disappear the savings of millions of
people
that led to a depression that lasted
more than ten months in the decade of
thirties and reached a rate of
unemployment of 25 per slow the people are
showed very optimistic in the decade
20 and very negative in the 30's
it was an event triggered by a
change in the mentality of the people
the vision that emotions have
the ability to encourage or discourage
economy became wisdom
conventional of the decade of the 30
through the work of the famous
British economist John Maynard
keynes there is a new danger that
significantly increase the cost of living
the best-known appointment of fein is that the
market could remain
irrational longer than what one
can stay solvent james affirmed
that emotions could cause
the prices increases I know neither
collapsed and that to protect the
economy of these dangerous bubbles
governments should regulate
strictly the markets
however he could never explain with
accuracy in what it consisted
mechanism that never exceeded the stage
blurry never came to develop a
Mathematical model set out
for that reason james received the rejection
of the profession in block
now after the crisis of the year 2008 the
economists let violists strive
for doing what you want, he did not succeed
make show precisely in what way
Emotions influence prices
his ideas are so influential that
even experiments are carried out
about behavior in the
University of Chicago traditionally
fief of the economy
is in one of them is explored a
mysterious psychological bias
we are interested to know how much you would pay for
this terminal is asked the students
imagine the price of a
consumer article a thermos with a
precious garnet color first they are
question how much would they be willing to
pay to think about it a few seconds and
then write the maximum amount
that they would be willing to pay for
this thermos offer an average of 6
Dollars
let's see we have six beautiful as
we hope to distribute them we will distribute them
salazar and then give them a
identical thermo in exchange for nothing
an hour later they are asked
how much they would be willing to sell it
in the theory of economics
rationalist the price should be
exactly the same
after all the value has not changed
however the average price they ask
for the thermos now is 9 dollars if
I would like to sell the thermos now that it is
your would go up is the price
Now it seems a little more special
because it is an object that I find
useful more opinions I've had the
lucky that I got this term and
how that is important to me
Your goal prizes the emotional pleasure of
own something for only one hour
has caused the price to go up by 50
perc
Music
it's an unexpected rise suggesting
that we are not aware of the
emotions that encourage this
behavior in harvard
researchers explore the impact
financial of these useful influences
the head of the team is Jennifer
I am a social psychologist
clinical psychologist I do not dedicate myself to
individual sessions or therapies
that carried out experiments in a
Laboratory
my conclusion is that to a large extent not
we are aware that it is what we
influences when making a decision
lerner explores all kinds of emotions
Today is the turn of sadness and
impact that it has on the
financial decisions
we will start by placing these two sensors
they measure the sweat response for this
experiment is designed to induce
emotions at such a low level that
the subjects are not aware that
you feel comfortable
researchers use sensors to
follow the physiological effects of
Emotions
We are ready to pick up the first
saliva sample from the data of the
heart and breathing until the
hormones contained in saliva are
It deals with the physiological vice of
study subjects when we asked
that they feel that they relax listening
music for example and in that way
we can observe how they are in a
neutral situation
then we use that data
to compare what happens is found
in the middle of a financial situation
complicated
MUSIC
among other activities our subjects
of study they see a scene of a
sad movie
they do not know it but this triggers
a basic level of sadness in them
the sensors reveal the change
emotional are making decisions but
they are totally oblivious to how it is
influencing the sadness on them
when we asked them their answer
have been affected in some way by
the images you have seen respond
that it is not time to perform the test
financially the subjects are asked to
perform a series of actions
Financial
next they are asked how much
they would pay for a consumer product
in this case a bottle of water
Jennifer Lerner compares the lessons of
these individuals with those of a group of
people who have not seen the video with
sad images
here we have the example of a subject of
study in neutral state
this guy is telling us that he
like to buy the bottle two
dollars and 50 cents
that contrasts with these data that are
a subject in a sad state
according to which is willing to
pay 10 dollars to get the
water bottle
this is very representative of what
we see in the value increases when we are
sad if sadness can push
the people to pay four times more for
a bottle of water that happens when the
bet is greater have been made
experiments that large amounts of
common money dollars for example and
we have discovered that the results
be growing even talking
of important figures
if emotions influence prices
from an individual level
What about the markets and the
large-scale economies
according to the rationalist economy to
these are driven by self-interest
Individual
However, Robert Shiller thinks that
is missing something obvious the
human beings are empathic animals
exceptionally empathetic not only
we are communicating ideas but
we are communicating emotions
that's what empathy means
it is not the same as compassion
it means to feel the same thing I know what
you are experiencing yourself because the
feeling that you have also
It's in my body
there is a hot real estate market in
the country if robert shiller is right
could empathy explain how the
hyper optimism of the market
real estate was transmitted to the
financial markets in the manner of a
cold solution
the real estate market has grown and has
reached an unusual price between
professional financial agents
the idea that moods
influences the park, it is assumed that
the market is a compendium of how
imagine the future thousands of people
if those people are optimistic about the
future the market rises and if people are
pessimistic about the future to the market
low
at the end the question what does the
market is people are optimistic or
pessimistic
and that's a psychological question the
feelings are still moving the
markets it is commented that the bubble does not
it will burst that it can increase in size
to the rationalists the emotions do not
constitute an explanation about the
functioning of markets and
confirmation that people feel and
Suffering does not mean anything you want
ensure that markets have gone up
because people have been carried away in
mass for emotions but that's not
means nothing
that tells us the situations that
will cause markets to rise or fall
one serves as a scientific theory
the certainty of the nationalists is
based on the mathematical model that
used to understand the markets
Financial
Music
it is called the hypothesis of
efficient markets and indicates that
financial markets act
fundamentally like a gigantic
calculator processing efficiently
all the relevant information to more
speed than any individual
this means that it would not have greater
importance if some agents
financial institutions will be carried away by
emotions the efficient markets and the
irrational behavior are not
excluding
as long as there are enough people
rational to keep prices at
border on the markets model
efficient markets themselves
are rationalist and the
prices can not be wrong in
no time
This model was invented by Eugene
fame is a very good model and any
of your applications you get a result
excellent created a lot of confusion and
still persists today the
confusion still persists today because
for many vex violists this theory
implies that financial markets
they should be and very is the thought
critical or control
the theory is that we have to look
in the markets as if they were oracles
when the market rises we have to
ask us what is trying
say today the wisdom of the market by
If markets are efficient there is no
a real need for a government since
the market itself will make sure that
the prices always correspond with
its right price
the nationalists do not believe in the
regulation but believe that the
markets will launch their own
risk management mechanism and so
has been
the first was invented here in the
mercantile market of chicago where the
financial agents handle
continuously exorbitant amounts of
money
he worked as an agent phil irons and
I trade with my own money between 50 and
100 contracts at the same time ie
contracts of between 50 and 100 million
Dollars
Music
here the agents earn money
offering to the security people
against risk including the
agricultural producers of bacon
pork and oranges
Music
I golubev long before this orange
became a balance the
farmer had to grow it
so he did not know what his
price when it hits the market 10
months more until I would get you benefits
of her as protection
farmers sign contracts that
they are safe for you in case of
fall of the price of the knives in
no place in the market
you'll see how two agents spend one
orange already and nevertheless it is negotiated with
the oranges in an invisible market
that is a transfer mechanism of
risk
when I read melamed he was president of the
merchant bag chicago appropriated
of that idea of the oranges and applied it
to financial assets in a contract
that happened to be called drift was a
revolutionary idea
the board of directors looked at me as if
I was crazy you say
in the mercantile market of chicago the
He has gone head.
you're going to destroy that kind of change
he is worried that a financial asset
as a currency an action collapses
You can suddenly buy a derivative that
you report benefits and it is the case in
anywhere in the world
people use one form or another of
financial derivatives to ensure
risks that runs
the derivatives are very useful move
beyond the mercantile exchange and
with less follow up adopt new
complex shapes
there are even some derivatives that have
been created as an insurance before the
risk of granting millions of mortgages
but according to these different risks
grow up
someone has to measure the
Music
in the modern temples of finance
the atmosphere is less like the
merchant bag of chicago and more
similar to a classical academy is not
of wonder is very likely that many
financial agents who operate here
have a degree in exact sciences
the culture of operations
stock exchange has changed
when I started in 1992 you could hear many
screams are parks and people threw
telephones by air
today he can not go out to the parquet floor and
check that the environment relatively
calm
today is the computers and you see another guy
of people participating in the
Operations
these financial agents are
called quads or analysts
quantitative because it uses equations and
statistics to quantify their
risks mathematically
that's when they program their
computers to make transactions
food
the financial markets are
currently dominated by a focus
mathematician and designed to ensure
that the risks are evaluated in a
rational and scientific still and
aspects of transactions
commercials that are an art and a
SCIENCER
now there are many aspects treated as
science and that is a novelty of the
last 20 years
a quantitative analyst will look
patterns between tons of data and it
will spend the day with looking at numbers
to try to optimize the results
these two key innovations the
derivatives to manage the risks and
the mathematicians to measure the
they convince many that the markets
they are efficient and makes the bubbles and
the crashes seem from the past say
if someone believes that too
will believe that pigs can fly to the
the first time I heard an economist
mention that idea I assumed that
They were very ill informed
here they were isolated on top of their
watchmen
Jeremy Granda is a successful investor
has accumulated gains during the
last 40 years
thanks to detect price bubbles and
bet against him
we have found 27 bubbles think that
the bubbles are inevitable and that
they have a predictable rhythm
the euphoria is what makes the
prices go up real and realism is what
that makes them go down and what the nation
determined causes a panic not
realistic since it feeds on itself
and it moves in the wrong direction
-that in the university chapman in
California.
vernon smith studies this cycle to many
economists do not like bubbles
Forbes are hard to understand
vernon smith wants to check what
happens when students compete
for getting money in a park
simulated they will participate in a
experiment but it's not an environment
ACADEMIC Lessons adjusted to school study plans.
your job is to earn the most
possible amount of money are
will pay based on the dividends that
win if they play well their cards can
earn hundreds of dollars
it's about real cash and
each of them has received a
imaginary financial asset for
trade with him trade with a
activity from the beginning they are
remember to be careful because the
active and is losing value with the
pass of the time
at the end of the game you will not own any
value of the asset will live exactly 15
transaction periods
the question is whether this fact
will determine the prices they bid
in case you do not take into account when playing
well the experiment has started in a
screen of the prices at which the
other brokers are
buying or selling and they also see
how is losing value of the asset that
they possess what is indicated with a
discontinuous white line in descent
Music
as prices increase they reach
the real value of the asset and something happens
I miss everybody starts running
running risks should be used.
the price has risen markedly with the
Hope to get very good bid benefits
above the real value
there is a lot of activity and well above
fundamental value in this fever
buyer
the students are overlooking
the fact that very soon your assets
it will not have any value
we are in period 10 and at term
of period 15 these assets do not
they will be worth nothing
the end is near and the price remains
well above the real value
the graph adopted the typical form of
a bubble and when the players
they try to leave it nobody wants
buy the place to earn thousands of
Dollars
the students observe how it
collapse the chart leaving them with
practically nothing
this experiment suggests that the
bubbles can be part of the tissue
of the financial markets
we have done experiments like these with
all kinds of anp subjects in chicago
recruit a few agents
financial instruments and securities
convene for the experiment they gave us
a magnificent bubble is a bubble in
which the prices rise and after
suddenly it collapsed
how is it possible that such a pattern
simple has left us so close to
an economic catastrophe
in 2005 as the price of the
housing the mechanisms with which
do rational economists count for
keep the markets safe
they become part of the problem
the big financial institutions
they issue derivatives worth thousands of
million dollars to protect the
mortgage lenders before defaults
of the loans and every time I created
you could not get 6 percent
of the total value he had created
that was a gold mine
you start to negotiate with these
derivatives and their price increases
notably
suddenly they have become the
equivalent of tulip bulbs
in the 21st century
in a few years they add profits by value
of more than 60 billion dollars
everything is fine as long as the ones calculate
the risk properly but your model
mathematic part of that the prices of
the markets are always the right ones
that model was taking for granted that
prices would continue to rise and that
very few people would be unable to
pay very risky loans
in short wells I was taking for granted
that the cycle was over
economic
look at all the posters of yourself
sells those that its owners can not
get rid when the price of the
housing collapses the model is
decompose and the price of derivatives
crumbles and the institutions
financial institutions accumulated a debt of
billions of dollars to the
banks could not sell to any
price so in the end the price left
of having value mortgages in states
they unleash fear on the eve of
collapse of the bag an entire building
intellectual built on the foundations
of rationalist decision making
There was the piec
it is very complicated to say that the market
is rational and perfect and who knows what
is doing
when it is clearly capable of freezing
and stop working
Music
Fear is taking over the market and
financial firms withdraw their
Investments
blood runs on the wall parquet
street and refuse to grant loans
the uncertainty flow something very
similar to panic could be employed
the word panic but in my opinion
it's just a change of taste
billions of dollars in mortgages
to lose human beings take
rational decisions through the
emotions when a lion approaches is
important to feel some adrenaline
because it's the way to take the
rational decision to run as a
crazy in the other direction
the dow jones has dropped to 240 points
while the nasdaq that wait for us
another thirty years like those that already
we live and they include this
reflection the world will come out strengthened
those that we have focused on
own interests of the institutions
borrowers we are in shock
unbelievers we believe that we have a boat
quantitative good that deals with velar
for all the risks but there is something in
what nobody has repaired
it's a case where people believe
too much theory and is willing to
bet big
based on a theory that clearly
it was not correct
For more infomation >> 10 MANERAS DE SABER SI LE GUSTAS | How to know if he likes you | Doralys Britto - Duration: 6:06. 
Không có nhận xét nào:
Đăng nhận xét