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Macroeconomics Is Now Part of an Investment Manager's Job

Time was (until a decade or so ago), when the average investment manager had to worry mainly about so-called micro-economics. That is to say, such a manager would be primarily concerned about the fate of the invidual companies, and perhaps the consumers that represented their customers. No need to worry about things at the "national," never mind "international" level. A company or consumer's fortunes were basically distinct from a nation's.

All that changed about the time that Thomas Friedman proclaimed "The World is Flat." Now things that touch the lives of average individuals and corporations often originate in the global sphere, and have global implications. And even things that start in the individual sphere (like subprime lending) often morph into global phenomena.

The latter is the province of so-called macroeconomics. Because of their new interaction, a manager has to be competent at both in order to be a competent manager. One no longer exists in a vacuum apart from the other--if indeed, they ever did.

That's where the numbers crunchers fall down. They are so focused on numerical relationships (e.g. the  FORMERLY high dividend yields and low price book ratios of bank stocks), that they don't look at the underlying issues; banks are ov...  and stuffed to the gills with bad loans (assets).  

It is now necessary to understand underlying causes as well as effects. Many managers hate doing this, but those that don't aren't "compleat" managers.