I think the point he didn't make very well was that CDOs and the direction of the stock market were correlated and most CDO participants also were stock market participants. Manchester United's chance for victory is presumably uncorrelated with either of those, so if you were a stock market participant who also bet on Manchester, you were better off than if you were a stock market participant who bet on CDOs.
I think his point was pretty clear, but his subsequent conclusion regarding the risk factor just seems completely nonsensical to me -- I mean, you could bet on any not-correlated-to-the-stock-market-event, regardless of its probability or odds factor, and it would have yielded less risk than holding CDOs as per his assessment. He's just talking about diversifying, but with the assumption that a stock market crash / economic crisis is imminent.
