It is unknown how the Joker became so insane.
He may have received his insanity through contact with other supervillains such as Maxie Zeus, who was suffering from intense precognition-induced madness by being mad at the world and believing that it was “rubber” and could not be changed. With his son dead, he planned to destroy Gotham City—despite warnings from his premonitions of impending doom—with a dirty bomb supplied by a mad scientist known less for compassion than for cruelty. The plan is interrupted before he can detonate the bomb when Batman intervenes; in response, Zeus hurls himself off a ledge to what he imagines will be certain death below
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