mrbill

Berkshire Hathaway: Proof That the CDS Market Is Irrational

It is rational to be irrational if you believe that it will save or make you money.

Example:

1. Bank XYZ is healthy, all others are not

2. Depositors take all there money out of all the banks, including XYZ

3. You don't, because you know XYZ is healthy

4. All banks fail and you lose your money because you were being rational

5. The irrational people who pulled their money out early got to keep it

So the irrational end up being the rational, and the rational, irrational.

I hope this makes sense, otherwise you will lose all your money trying to change the world.