Analysts awaken

Finally, even the mainstream fund managers are getting it. Saker Nusseibeh in this interview with the Telegraph points out the purpose of this blog. Apparently it has dawned on him that politics has a very important impact on the markets. Indeed, an understanding of the politics is as important as an understanding of business and economics for investors.

Back in 2006 this blog was started with that very view in mind. So many of the really big decisions are in reality taken by politicians, they set the scene for markets. They decide taxes, they decide where airports get built, who runs the trains, who can or can't work in a Country, what currency is used.

And of course, the more wild a Country the more important politics becomes. My own investments in Iraq, Spain and other places are almost entirely governed by the political process and the outcomes achieved by the Companies there are entirely dependent on political decisions.

The world 'twas ever thus, but interestingly in a world of Quantitative analysts and algorithmic trading systems market participants moved away from the normal view - instead thinking that by the application of mathematics and science they could find a new way. Human nature prevents this, man is a political animal at heart. therefore the need to understand both qualitative and quantitative elements is key to making good decisions.

I'd love to see a quantitative analyst try and explain the creation of the euro or predict how it will end - the whole process is politically driven, with seemingly scant attention paid to the underlying economic drivers.

2012 looks indeed like politics as a whole will be king, so I'll look back at the end ofthe year to see how the balance of posts here between politics and econimics has stacked up in the course of the year.