Mic (mi_b) wrote,

We don't know what we are doing here

In 2002, when the US Congress was debating whether to close the "Enron Loophole" - that is, to require that over-the-counter energy markets be brought under the full oversight of the US futures regulator - Republican Trent Lott rose to his feet in the Senate chamber.

Brandishing a dictionary, the senator looked up a definition of "a derivative", a term referring to the complex futures contracts used in the energy markets to hedge the risks associated with holding physical supplies of commodities such as oil and natural gas. The dictionary told him that it was "the limit of the ratio of the change in a function to the corresponding change in its independent variable as the latter change approaches zero".

Mr Lott turned to his colleagues with a warning: "We don't know what we are doing here. I have serious doubts how many senators really understand [this] and it sounds pretty complicated to me."

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