Do not write off the macro hedge-fund manager just yet

IF YOU WATCH much too much televised football (soccer, if you must), you will often hear a particular lament. Whatever happened to the playmakers, the socks-rolled-down mavericks whose individualism could alter the course of a match? The question is invariably posed by grizzled ex-pros. They are saddened but also puzzled by the systematising of the modern game. Players go through a series of prescribed moves (“automatisms”) when they get the ball. Passages of play are minutely choreographed.

This leads us smoothly to Louis Bacon, a game-changer in the world of “macro” hedge funds, which make bold bets ahead of predicted shifts in the macroeconomic climate. Mr Bacon is to close Moore Capital, the hedge fund he founded in 1989, to outside investors following poor returns. Many of his peers have already quit the game. Hedge funds are bleeding institutional capital.

Cue much sad shaking of heads by grizzled ex-pros. The markets game has changed, they grumble. It is now a playing field for well-drilled algorithmic traders or for index funds which passively hold a basket of leading stocks. The minutely choreographed policies of central banks act to suppress the market volatility that hedge funds thrive on. There is no place for the individualist who makes a variety of bets at his own discretion. A lot of this is true. But the...