Markets

Jun 19: Richard Thaler on the equity rally

Richard Thaler, professor at Booth School of Business at the University of Chicago and co-author with Cass Sunstein - now President Barack Obama's "regulation czar" - of Nudge: Improving Decisions About Health, Wealth, and Happiness, says the equity market could fall again. "We're all waiting to see how many other shoes are going to drop. Is there going to be a credit card drop? What else is there? We don't know. I think the bull market that we've seen has, in part, come simply from the fact that no other big shoes fell." He says the world has discovered "quant risk", a new kind of systemic risk that reflects the fact that so much computer model-driven trading is correlated.