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Quote by Richard Thaler

“So the world is much more correlated than we give credit to. And so we see more of what Nassim Taleb calls "black swan events" - rare events happen more often than they should because the world is more correlated.”

Quote by Richard Thaler

Author

Richard Thaler, born on September 12, 1945, is an American economist renowned for his contributions to behavioral economics. Professor Thaler is a faculty member at the University of Chicago and is considered one of the pioneers of behavioral finance. His research focuses on how human behavior influences economic decisions and how these behaviors conflict with traditional economic theories. more

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“I think one lesson we have to learn is that there's a lot more risk than we're giving credit to, a lot more what economist calls systematic risk.”

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“David Petraeus, the best known American general of his generation. After commanding the American war effort in both Iraq and Afghanistan, he was serving as CIA director when he stepped down suddenly following revelations that he`d had an extramarital affair. That same investigation that turned up evidence of the affair also eventually turned up evidence that General. Petraeus had passed classified information to his mistress.”

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“I think we also have learned the lesson that we have to have better incentive structures.”

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“One simple step firms can take is make sure that people that are getting paid a lot of money, say more than a million or two, that a big chunk of that money is deferred. That's going to change the whole ballgame.”

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“The money has to be deferred with what they call "clawback," which means they can get it back if I lose it all. So that guy making ten million a year selling credit default swaps, if we're going to keep five million of it in escrow for ten years, and with the right to go back and get it, if he starts losing money, then we're going to give people the right incentives not too take so much risk.”

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“Living here on Earth, we breathe the rhythms of a universe that extends infinitely above us. When resonant harmonies arise between this vast outer cosmos and the inner human cosmos, poetry is born.”

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“The same with the mortgage brokers that were selling people mortgages they couldn't afford. We shouldn't pay them on each mortgage they write. They should have what they call "skin in the game," where they've got to reimburse us if the guy who sold the mortgage defaults.”

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“New York congressmen have recently been plagued by a string of embarrassing scandals. Shirtless craigslist hunk Chris Lee, nonconsensual staff tickle monster, Eric Massa, naked texter Anthony Weiner, so this guy is now running to join those dubious ranks and win the Michael Grimm seat. And he`s campaigning on the promise that he`s too old to be too gross. And I`m not paraphrasing the campaign pledge.”

“Everyone's lost a lot of money on their 401k plans. I've heard some people calling them 201k plans. So it's even more important to get people to be saving more for retirement. Behavioral economics has helped us learn a lot about how to do that.”

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“In a typical 401k plan, when you first become eligible you get a big pile of forms and you're told, fill out these forms if you want to join. Tell us how much amount you've saved and how you want to invest the money. In, under automatic enrollment you get that same pile of forms but the top page says, if you don't fill out these forms, we're going to enroll you anyway and we're going to enroll you at this saving rate and in these investments.”

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