One day, two Masters of the Universe went to the Emperor and promised him that they would sell him the greatest financial instrument ever. This derivative, they told him, was incomprehensible to anyone who was either stupid or unfit for his position. The Emperor could not understand the derivative, but pretended that he could for fear of appearing stupid; his financial advisors do the same. The Emperor then shows off the derivative to the market. The crowd in the market admires the complexity and depth of the financial instrument, until a small child cries out, “But it is worth nothing!”. www.mastersuniverse.net
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