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.
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Currency Wars: View From Beijing
by Douglas Clark Johnson
16 January 2011
Any belief that the Chinese will allow the yuan to appreciate meaningfully beyond their pre-determined framework belies a certain naiveté, in our view. Export growth stoked by a weak yuan helps soothe two sources of serious internal pressure.
Pomp and circumstance was in high gear in Washington last week. Amid the ongoing frustrations of jump-starting the US economy and sorting out the mortgage mess, President Hu Jintao’s state visit was a public relations victory for the Obama administration. The awkwardness of the Free Tibet demonstrators in Lafayette Park was a distant sideshow.
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Tags: China, consumer price index, currency issues, currency rate, inflation, investment, policy analysts
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