[kgwgk]

>> literally the only thing they could think of to do with the massive amount of money getting dumped in their lap

> There are tons of places to put money that are riskier, even billions, that would have yielded better returns

That there were many riskier alternatives doesn’t mean that there were no safer alternatives. (And by the way most of the riskier alternatives wouldn’t have actually yielded better returns in the last couple of years.)

[Zetice]

But it does mean that greed doesn't explain everything, which is my point.

[kgwgk]

If you don't think that the explanation for those investments into higher-risk higher-yield longer-term treasury bonds instead of, for example, lower-risk lower-yield shorter-term treasury bonds is that the yield was higher, what could it be?

Speculation that interest rates would go down and longer duration bonds would appreciate more?

Avoiding the hassle of managing a short-term portfolio to have more free time?

Taking risk for the sake of thrills?

[Zetice]

I don’t know! I’m asking here because it’s not clear to me what their thinking was, but none of the explanations people here are giving really make me feel like I understand. Is the argument that they were a very narrow set of greedy? Why not just a not narrow set of stupid?

[_Tev]

Greed (or any "wrong" mindset really) is not black and white. You can be "a little too greedy" or "a lot greedy".

Your example from other comment with 30y maturities is actually nice example - that would be "way more greedy".

Basically as long as your bet on higher yields and bigger risks does cause your bank to fail, you were too greedy.

I am not an expert, but the explanations given make sense to me.