Andrew Lo, professor, hedge fund manager, and director of the financial engineering lab at MIT’s Sloane School of Management discusses how the financial markets can play a key role in solving the greatest global challenges. Including finding a cure for cancer.
With the combination of increased incidents of malicious hacking, what could be overtaxed computer networks, and now the fragile economy, it's enough to make one nervous about the state of the technology on Wall Street. MIT Sloan Professor, Andrew Lo, says maybe it's not time to panic just yet, though he does caution that "there are periods of time where we go into uncharted waters, where there's just so much trading volume, so much activity that the system can be overwhelmed for a short period of time."
Dr. Lo discusses why it is now a different world, a volatile world in the stock markets, and investors better get used to it. Regulators do not have the resources or expertise to even remotely keep up with the advances in high frequency trading, leaving the individual investor at a distinct disadvantage.
Andrew Lo joins host, Neil DeGrasse Tyson, to discuss personal finance and the science of money management, guiding listeners on a non-random walk down Wall Street and revealing the neurobiology behind financial transactions. TV host Suze Orman also gives her two cents about investing, the economic meltdown, and the impact of science on the financial world.
In this episode, Planet Money hosts take a closer look at proprietary trading, which is under attack by the latest proposal from the Obama administration. The new banking regulations proposed by the president call for a ban on commerical banks engaging in potentially risky trades with their own funds—or, in some cases, your own funds. Professor Andrew Lo helps shed some light on the murky world of 'prop trading.'