Translator: Marcelo Papetti
Reviewer: Maricene Crus I have a 13-year-old daughter. In 2012, during the financial crisis, when the stock markets crashed worldwide, she was five years younger,
so she must have been eight or nine. We were watching the news. We were having lunch
and watching the news, and a bald guy with a tie came up, an anchorman who always
presented bad news. He's the one who broke the news about
the tsunami and the plane that went down. And that day he said, "Breaking news, stock markets crashed worldwide." My daughter looked at me,
like this, and I went pale. The guy went on and said,
"Bonds' nominal prices went up due to the impossibility
to sustain debt obligations." My daughter looked at me. (Laughter) "Investment banks collapsed," he said,
"Shareholders are committing suicide." She opened her eyes wide and so did I. I obviously got scared
because something serious was going on. My daughter Nina, who always asked me about tsunamis
and planes that crashed - A tsunami was easy to explain:
it's the epicenter of a thing in the sea, and then the Filipinos die - it's simple. (Laughter) She asked, "What's going on?
Is it serious, dad?" And I realized I didn't have
the slightest idea about how to explain to a child
what was going on. An earthquake is easy to explain, but how do you explain a child
the collapse of the financial system? It can't be explained,
mainly because it's intangible. But since I'm very stubborn, and in my spare time I'm also a writer, I set out to do it
and wrote a children's story. The following day,
while watching the news, she asked me again, so I told her the story
that I want to share with you now. I told Nina that once upon a time there was a very peaceful village and a man named Pepe,
our main character, lived in the outskirts of the village. One afternoon, Pepe went for a walk
and he felt thirsty. When he returned home,
he opened a bottle of wine, and while he was drinking wine,
he realized something, something that nobody had ever realized:
there were no bars in the village, not a single bar. Pepe thought that if he opened a bar, he could make others happy
by pouring them drinks, and that he could even make some money. He felt happy with the idea
of opening a bar. That afternoon, his friend Moncho
dropped by his place and gave him a great name for the bar. And everyone knows
that when an idea gets a name, it begins to take off. Pepe made a list of what he needed
to open the first bar in the village - Nina looked at me with her eyes wide open.
The story was fine so far - Pepe realized he needed
to buy tables, chairs, glasses, paint and a tethering post so his clients
could tie up their horses and get into the bar. He did the math, and all of that
should cost him around 10,000 coins. Of course Pepe didn't have
10,000 coins, because he was poor, but overnight he devised a way
to get those 10,000 coins. He cut a thousand little pieces of paper, and he wrote on each one of them, "Coming soon: Pepe's Bar." He wrote that a thousand times. The following Sunday, after mass, he went to the village square
in his best suit, and he told everyone there, "Dear neighbors, I'm opening a bar
in the outskirts of the village." Everybody looked at him.
Some said, "Great idea!" Pepe felt very happy
with everyone's attention, and then he showed the thousand
pieces of paper in his hand and said - I said to Nina, "This is important." - Pepe said, "Each one of these
little papers costs 10 coins." The neighbors looked at him. "The person who buys
one of these has to keep it because in one month,
when I open my bar, I'll pay 12 coins for each little paper
you give back to me." There were whispers all over the square. Moncho, who was the village fool, asked, "Wait Pepe! The little pieces
of paper only cost 10 coins. Why would you give away two extra coins?" Pepe said, "It's not a giveaway,
it is compensation. I'll compensate with two extra coins those who help me accomplish
my dream of opening a bar." The mayor came up front and said, "It makes perfect sense! Well done, Pepe!" Ernesto, who was rich
and knew about business, said, "I think it's a great idea." Father Ricardo, while pulling some coins
from underneath his cassock, said, "That's a very Christian idea!
I want some of your little papers." And everybody started buying
Pepe's little papers. In such a simple way
and in only one morning, Pepe got the money to open his bar. Pepe sold all 1,000 little papers
among all neighbors. "I bought two," said Sabino,
who was poor but optimistic. "I bought 36," shouted Quique,
who was greedy and arrogant. Pepe returned home
with 10,000 coins in his backpack and fell asleep thinking
about his dream of opening a bar. The following day was a Monday,
and Pepe traveled to town and bought wood to build a counter
and bought some paint. He went back home and started working. He didn't set foot in the village square
for the following four weeks. That means - I said to Nina - that Pepe had no idea about the disaster
that was going to occur because of his little papers. At that point, I stopped the story, and I looked at my daughter
to see if she was following it. It is important to check
if children understand your metaphors, especially if it is a complex idea. She said, "Dad, this has nothing to do
with what the bald guy said on TV. But it's fun. Go on!" (Laughter) So I went on. I told her what happened
in the village during the first week. That Monday, the square was very crowded,
much more than on an ordinary Monday. Many neighbors had spent the whole night cutting their own little papers because they had also realized
that they had projects that they couldn't accomplish
due to a lack of coins. Some little papers said, "Coming soon: Horacio's ice cream parlor." Other little papers said,
"Soon: Carmen's beauty salon." And there were even little papers
written by Moncho, with misspellings, that said, "By the end of the month,
I'll get you to the Moon." (Laughter) Suddenly, people were climbing
the streetlights so that other people
could buy their little papers. They were climbing the water fountain
to trade little papers for coins. Tuesday was even worse, and on Wednesday, it was so crowded that it was impossible
to walk on the village square. The mayor, in order to keep order, had to facilitate a space in the Town Hall for the neighbors to gather and exchange the papers
without destroying the square. That place was inaugurated Thursday and was given the name
of "The Little Papers Hall." So by Friday, everyone who had a project had obtained the necessary coins,
and they had started working. Horacio was buying milk,
cream and ice for his ice cream parlor. Pepe was sawing wood for his bar. Carmen was sharpening scissors
for her upcoming beauty salon, and Moncho had bought two skinny horses
to get people to the Moon. (Laughter) In The Little Papers Hall
there was only a group of neighbors left, the ones who had never thought
about any interesting projects. The only thing these neighbors had were little papers made by other people. One of them, Ramón, complained out loud, "Gee!" he said, "Now I need coins for cigarettes,
and I don't have any. A few days ago, I traded
my last 10 coins for a little paper, and now I need to smoke." "Same with me," said Luis. "I want to go see a movie, but I can't." The complaints were getting louder
until Sabino, who was clever, held his little paper in the air,
and he said, "Let's see, guys. In three weeks, Pepe will pay 12 coins to whomever has this paper
that I bought for 10 coins. I'm selling my little paper
for eight coins right now!" Everyone looked at him and said, "Oh!" "It's a deal!" said Ernesto,
who was rich but wanted to be richer, and he snatched the little paper
from his hands for eight coins. Ramón and Luis also sold their
little papers for less than 10 coins, and while one went looking for cigarettes
and the other to the cinema, the other neighbors saw
that this was a new way of doing business even though they had never
come up with an original idea. Some of them got on the chairs and tables. They started offering all they had, and even Father Ricardo
came sad from the church and said, "Dear friends, when Moncho
was selling his little papers, I, as a good Christian,
bought a few because he's a fool. Now, Moncho is selling them for 7 coins,
and he says he'll repay 20 coins. But he's a fool, and he wants
to get people to the Moon. I now need coins to fix the belfry, and nobody wants to buy
his little papers." "Sorry, Father Ricardo," everybody said,
"we can't buy them. That guy's never going to the Moon." So the downcast priest left
with Moncho's little papers. That was the first time in many years that nobody would help him fix the church. And so the first week went on. I looked at Nina, and she told me, "Now it seems to me that this is starting to sound
like what the bald guy said on TV." I said, "Of course! In the real world The Little Papers Hall
is called 'Stock Market,' and the little papers have two names. In some countries they are called 'bonds.' In other countries they are called
'debt certificate.' The 12 coins that Pepe
will repay when he opens his bar, or the 20 coins Moncho says he'll repay
when he gets people to the Moon, are called 'nominal value bond.'" And Nina looked at me. "Ha!" (Laughter) The little girl understood.
She was only eight years old! So I told her what happened in the village
during the second week. Pepe's house no longer
looked like a house, it looked like something else. There was a wooden bar in the dining room. The bathroom was divided in two:
one for ladies and one for gentlemen. The walls were half painted in navy blue, and Pepe was thrilled with his progress. Since Pepe hadn't been to the village yet, he didn't know that everyone's life
had turned into a huge mess, with little papers coming and going
with different prices and owners. Even the mayor,
after talking to his assistant, decided to jump on board. One Tuesday morning, the mayor
spoke from the balcony with a megaphone: "Neighbors, the square was destroyed
during the little papers' frenzy. I need to raise funds to repair the damaged streetlights, to repair the water fountain
and to buy me a motorcar. From now on, I'm selling
1,000 government little papers." "How many coins?" asked Sabino. "No coins!" said the mayor, "My little papers cost one horse. When the water fountain
and the streetlights are fixed, and I have bought me a motorcar,
I'll pay two horses for each little paper. The government little papers
are now for sale. Buy them before it's too late!" The mayor's little papers
sold out in record time. Everybody in the village gave
their horses to the mayor, and from that day on,
all the chores were done on foot. In the meanwhile, the trading
of little papers was still rising, and there weren't enough pencils
to write down who owned what. Some little papers
were very sought out, like Pepe's, who worked day and night
building his bar. But other little papers were unwanted, like Moncho's, because his device for getting people
to the Moon, for the moment, was only a wagon and two horses. Nobody believed that it'd ever take off. Ernesto, the rich neighbor who had bought many little papers
during the first week, now wanted to get rid
of Moncho's little papers. Since he also had Pepe's little papers, he came up with a great idea
that he called "Ernesto's packages." These were packages
with 100 little papers of all colors. For example, there were
10 of Pepe's little papers on top, 20 Horacio's ice cream parlor
little papers in the middle and 70 little papers
of Moncho's lunar project at the bottom, where nobody
would see them. By the following Thursday, Ernesto's packages were a huge hit
among the neighbors who madly sought out
Pepe's little papers or the mayor's. But Friday, Quique found out
about the scam and said, "Beware! Be careful, neighbors! Ernesto's packages sometimes have
Pepe's little papers or the mayor's on top and that's fine, but at the bottom there's plenty
of Moncho's papers, and that guy is never ever
going to get anybody to the Moon. So before you buy his package,
seek my advice. I charge two coins
for each piece of advice." (Laughter) From that moment on, every buyer consulted Quique
before buying any package from Ernesto. Ernesto and Quique,
who had been friends for many years, never spoke to each other again. This is what went on the second week. At this point, Nina was almost
an expert in this matter. I explained to her that in the real world, the mayor's little papers are called
"public debt securities." I explained her that Ernesto's packages are "collateralized debt obligations." And places like Quique's house,
the place where all the neighbors go to find out if they should
trust Ernesto or not, are called "investment banks." Then I told Nina
that when the third week started, some of the projects
were almost completed, while others were just getting started. Pepe's just needed
to nail the tethering post so the horses could rest outside the bar. Horacio had managed to blend
milk and fruits for the ice cream, and just needed to bring
ice blocks from town. But Carmen was still looking
for a nice venue for her beauty salon although she had dozens
of sharpened scissors. And what can we say about poor Moncho? His horses looked sadder and skinnier, no matter how much he brushed them. It didn't look like his device
would fly anytime soon. The neighbors that had Moncho's
and Carmen's little papers were nervous, and they couldn't sell them to anybody until Quique came up with a great idea. He said, "Hey! If you still have Moncho's
little papers, don't worry. I can sell you 'Quique's Peace of Mind'
for those little papers." "What's that?" asked Sabino, who had a lot of Moncho's little papers. "Very easy," said Quique. "If you have Moncho's little papers, you pay me two coins every night
until the end of the month, and if Moncho can't get
people to the Moon, I'll pay the 20 coins Moncho promised." "Even if he fails?" asked everyone. "Even if he fails!" said Quique. "Great idea!" said Sabino. "That way we'll feel much safer, and we can buy more
little papers from the village fool." "That's why I call it
Quique's Peace of Mind," said Quique. And many neighbors began to pay Quique two coins every night
to insure Moncho's project. Caught up in the frenzy
of these new ideas, no one in the village realized that the mayor had neither
fixed the streetlights nor the water fountain. He had only kept one part of his promise: he had fled the village in a motorcar. That's all he'd done. And the only horses
left in the village were Moncho's. The mayor had taken all the other horses. The assistant, the mayor's right hand,
who knew all about the scam all along, decided that nobody should know
that his boss had left. And his idea was magnificent: he brought a blackboard
into the Little Papers Hall, and he started grading
each project from one to ten. He gave an eight to Pepe's Bar, a five to Carmen's beauty salon, and a seven to Horacio's ice cream parlor. He gave a two to Moncho's Moon vehicle and, as if it was no big deal, he gave a 9.5 to the mayor's
village square renewal project. "What are those numbers?" asked Sabino. The assistant said, "Those are the probabilities
of completion of each project. It's for you. I'm only trying to help." Which was what went on the third week. At this point, I explained Nina
that in the real world, Quique's idea of offering peace of mind is called a "credit default swap." The assistant's blackboard,
in which he graded each project, in the real world is called
a "credit reporting agency." They sometimes get it wrong
unintentionally, and they sometimes
get it wrong on purpose. Since we were already on the fourth week, Nina asked me if Pepe
had finally managed to open his bar, and I told her the end of the story. The end of the story goes like this: When the fourth week came along,
and the month went by, Pepe got up very early,
and he peacefully walked to the village. From a distance,
you could see his bar facade shining with the brand new luminous sign. The bar was called "The Moon,"
as Moncho had suggested. Now he only had to wait
for the neighbors to arrive, dying for a drink. Pepe walked the 10 miles to the village, nailing signs to every tree
beside the road: "The Moon Bar. Open every night." Each time he nailed a sign,
he would move back and stand proud staring at the sign. However, when he got
to the village square, he couldn't figure out what was going on. He thought he had made a wrong turn,
and that he was in a different village. It looked like a war had broken out. The streetlights and the fountain
had been destroyed. There were no horses in the streets. The neighbors were walking in circles
talking to themselves. "What happened?" Pepe asked Horacio
as soon as he saw him. "Oh! Pepe!" said Horacio crying, "Oh, Pepe. Everybody went crazy
with the little papers, with mine, Carmen's, yours, everyone's. All of a sudden, there were more
little papers than coins. The mayor ran away.
Later on, there were no more coins. Then the horses disappeared. The guys selling Ernesto's
packages went broke. Quique's Peace of Mind resellers
couldn't pay anyone, so they ran away during the night. We are ruined, Pepe." "And your ice cream project?" asked Pepe, "What about Carmen's beauty salon?" "My project was a fiasco," said Horacio, "There are no horses to go to town
for ice, so the ice cream melts. Carmen doesn't have any customers. Everybody is pulling their own hair out.
No one needs a haircut." Pepe was speechless.
He couldn't believe what he'd heard. Then Horacio said,
"Dear God, I need a drink." And Luis said, "Me too. My throat is dry." Sabino asked, "Pepe, did you open
the bar you were building or not?" And many others approached him,
asking about the bar. Pepe then realized that without horses no one could ever get to his bar
in the outskirts of the village. He also realized he could never repay
the 10,000 coins he had borrowed. Then he saw, in the middle of the square, Moncho. Moncho's two skinny horses
were the only animals left, and they were pulling three wagons
with two wheels each, like a train. Many neighbors were getting on the wagons, while many others
were waiting in a long line. "Moncho," said Pepe,
"where are all these people going?" And Moncho said, "Where do you think? To your bar! To The Moon." Pepe saw a sign hanging
from the broken water fountain that said, "Moncho gets you to The Moon. Departure: one coin. Return: Free." "But Moncho," said Pepe, "did you know that everyone
would lose their horses?" "No," said Moncho, "I only knew one thing: I know anyone can ride a horse to the bar, but no one can ride it home
if they're drunk." "Since I don't drink, I thought I could
take folks to and from The Moon." Then Pepe hugged Moncho. He got into the first wagon and shouted, "Everybody to The Moon!
Drinks are on the house tonight." And everybody jumped
in the wagons and clapped. Even Nina was happy,
and she clapped at the end of the story. Then I told my daughter
that she should be careful because in the real world, the stories about Pepes
who want to open bars, or the stories about Monchos
who want to get people to the Moon, stories that no one understands, are almost always projects that don't have happy endings
as in children's stories. Because people like Quique, the mayor,
Ernesto or the assistant show up, and they always ruin everything. But when one of these projects does work, I told my daughter, when something magical happens
and those projects turn out fine, they are called "dreams," and they are usually wonderful. (Applause) Thank you very much. (Applause)
