Myths and legends of the market
The JC’s guide to the foundational mythology of the markets.™
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The Children of the Forest were a prehistoric proto-civilisation of woodland sprites and hippies; a kind of peaceable pre-derivative, banking people, largely unconcerned with material wealth but blessed with a preternatural gift for option pricing. They roamed the moors and fens of England semi-naked in the time before the alliance of men and elves. Alas, they modeled their delta by using profoundly flawed value-at-risk techniques and wildly miscalculated their exposure to the First Men, a marauding race of American derivatives salesmen who wiped them out in the late 1980s in one big bang, but not before they left behind traces of their contribution: the 1985 ISDA Code and the Cross Default clause, which still afflicts the ISDA Master Agreement to this day.
See also