An alternative term for idiot or moron. Usually used in the UK to describe someone who is incompetant or gormless. Taken from the name for the popular Jim Henson Puppets.
When a failing California based company, hires as a last ditch effort, a group of New Yorkpower brokers to try and save their ill conceived, hubris plagued, doomed enterprise.
CEO : God damn it Q4 is coming in even worse than Q3!!!
CFO : The investors are going to pull the plug!!
CEO : There's only one thing we can do!
CFO : You're not thinking what I think you are, are you ?
CEO : I am (hits intercom to secretary) "Get me on the next plane to NY, this LA/SF muppet is taking Manhattan"
Every person who had no idea what actually happened gathered to explain in greatdetail their version of events, each time out doing the last person, it was truly a momentous muppetition.