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Codexa Capital: Access to Global Capital  

Archive for the ‘Analysis’ Category

Redirecting the Call for Action

by Douglas Clark Johnson

20 May 2010

During a recent dinner in Dubai, a longstanding colleague of mine from the private banking business asked, “What do you think of Islamic wealth management as an enterprise model?”

I was stumped. Not because I haven’t thought about it, but because it had been so long since I’d heard the question. These discussions were more common in the pre-credit crisis era, when the liquidity cycle was peaking. They have all but evaporated in the current environment. …continue reading

Tartar Cameleer: Georgia as an East-West Trade Bridge

by Douglas Clark Johnson

25 January 2010

The visitor to the nation of Georgia continually encounters images by Niko Pirosmanashvili (1862-1918), known as Pirosmani and considered a master of naïve painting. His portraits of Georgians enjoying daily life a century ago—peasants, fishermen, musicians, even millionaires—pop up everywhere as restaurant murals and tourist mementos. And even occasionally as the original artwork.

Niko Pirosmanashvilli's painting The Cameleer

It is noteworthy, then, that Pirsomani’s sense of the ordinary extended to a man in oriental costume holding the tether of a Bactrian camel. Tartar Cameleer evokes the Silk Road, suggesting that the commonplace extended to caravans passing through Tiflis (now Tbilisi). In view of the painting’s 1914 date, the cameleer image may have been nostalgic, but it is a vivid, if rustic, indication of Georgia’s longstanding role as trade junction between Central Asia and Europe.

From the perspective of global investment strategy, Pirosmani’s portrait of the camel driver conveys the cosmopolitan nature of the Georgian economy. His worldview prevails into the present day as Georgia looks both East and West to affirm its progressive identity.
…continue reading

Australia: Thriving Gateway to Asia

by Douglas Clark Johnson

09 January 2010

The credit crisis laid bare several longstanding tenets of the investment business, including that market prices are largely efficient, established markets are better regulated, and the biggest economies offer less risk. While elements of these issues remain true, we still face disjointed financial markets, generating incoherent answers to routine questions. One of the latest manifestations of this trend may have been the Dubai fiasco. Uncertainty and confusion abound.

There are few unified stories across the world today; Australia stands among them. Certainly the dimensions of its investment substance may surprise those distant to the story. Consider these points of uncommon knowledge:

  • The four largest Australian banks are all rated AA (stable) by S&P, placing them within the top 3% of banks globally on a credit-quality basis.
  • Australia’s largest trading partner is China, with the rest of Asia, including India, Korea, and Japan, amounting to some 50% of exports.
  • Australians have the largest pool of investment fund assets in Asia, more than 45% greater than Japan.

From an investor’s standpoint, we identify themes that suggest the relevance of Australia to a prudent, risk-adjusted portfolio strategy.
…continue reading

United States: The Demerol Economy

by Douglas Clark Johnson

08 September 2009

If the United States economy were a hospital, its patients would run the risk of addiction to the fiscal equivalent of Demerol, the high-powered painkiller. Whether the nation can maintain the current course of treatment without severe side effects, let alone withdrawal symptoms, is a quandary facing investors who are presented with a mixed set of economic and market symptoms.

Over the past year, the government has served as white knight to the auto industry, tried to stimulate the housing industry with tax credits, and pumped untold additional billions into the financial system. Congressional legislation meanwhile has been chock-full of spending programs in an attempt to amplify the wave of hand-outs. When combined with the Federal Reserve’s asset-purchase program, the total stimulus package has amounted to almost 20% of GDP. The figure is staggering by developed-world standards. …continue reading