Bye Bye Banks and Wall Street

[sleepyjeff]

My brother is a VP at a major US bank. He explained it to me like this:

Let's say there are 5,000 boxes on display. You can't look into any of the boxes but you know that 4,900 of them contain a million dollars.......the remaining 100 contain nothing. What value would you assign to any one box?

If you assign a million dollars to one box and it turns out to have nothing in it you end up in the hole for a million dollars.......so you are likely to assign a lower value to any given box, even though in all likelyhood that box is still really worth a million.

Yeah, I still don't get it either