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> This is the only explanation that doesn't depend on a source of dumb money that can never learn buying this debt.

No it isn't. A simpler explanation is that the people making the decision aren't the ones paying for the failure. I see this all the time at the executive level in finance -- people will knowingly make bad deals if it gets them their bonus.




Someone still has to be losing money on that deal or it's not a bad deal. Someone is paying the bonus and giving the executive money to invest

You're also starting from the assumption that the deals are bad. Why is that?


but how are they getting a bonus if the deal is bad? Esp. if it has gone on for a while?




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