Chanos And The “Giant Positive Reinforcement Machine”

Jim Chanos did an interview with Yale's Alumni Magazine September/October issue. In the interview, Chanos talks about some of his biggest bets, the structure of the market, and the course that he teaches at the prestigious university. Chanos has been teaching financial fraud for three years to Yale's best and brightest.

One of the most interesting parts of the interview concerns Chanos's general opinion of the stock market, and its relationship to his business of shorting. Chanos calls stock markets "giant positive reinforcement machines." That makes shorting stock unnatural, and almost obscene in the eyes of...