Nobel economist Thaler says he's nervous about stock market

(Oct 11): A buoyant and complacent stock market is worrying Richard H. Thaler, the University of Chicago professor who this week won the Nobel Prize in economics.

“We seem to be living in the riskiest moment of our lives, and yet the stock market seems to be napping,” Thaler said, speaking by phone on Bloomberg TV. “I admit to not understanding it.”

The S&P 500 index has been reaching repeated records since President Donald Trump’s election last November amid steady growth in the US economy and labour market, as well as expectations for lower taxes, though policy action in Washington has been limited. Thaler, who has made a career of studying irrational and temptation-driven actions among economic actors and won the Nobel for such contributions to behavioural economics, expressed misgivings about the low volatility and continued optimism among investors.

---

Related Stories

• Fed cuts rates by half point in decisive bid to defend economy
• Fed on course for September rate cut as risks to job market grow
• How do we fix Bernanke's fixes? That's for a future Nobel

---