Kate Brown Ch 7 Q6

The passage I found particularly was the one that explained speculation. Using the example of a "loser brother-in-law" Wheelan describes the amount of people/investors that are involved in any credit default swap. The other people involved probably aren't very connected to either the borrower or the lender and therefore must resort to speculation in order to determine whether or not loaning money is a good idea. Wheelan also includes how the lack of investment in research on who will be receiving this loan could have serious negative consequences. If people agreeing to insure your loan to your brother-in-law knew the unlikelyhood of him paying you back they would probably not do it. That is the risk with entering deals so easily. Like the example of choosing a check out line, there will always be factors and information that is either not passed on or not predictable.