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MB Fund August performance

Apologies for the lateness of this report, we are still getting reporting systems ironed out with our portfolio provider – you will be hearing from us much earlier for the next monthly report. While some of the key trends that we are positioning the portfolio for moved against us last month (bonds and the Australian

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Weekend Reading 30 September to 1 October 2017

Global Macro / Markets / Investing: ProShares files for bitcoin ETF, and one to bet against it – CNBC Bitcoin Is the Market’s Favorite Buzzword – Bloomberg Deficits Do Matter, But Not the Way You Think – Roosevelt Institute OTC Derivatives Markets Thriving Thanks To Financial Regulation – Value Walk Investors Seemingly Learned Nothing From

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A Big Australia and the problem of #FakeInvestment: A note for Andrew Leigh

Cross-posted from The Glass Pyramid: Macrobusiness reported the latest ABS release on demographics: “…….The ABS released its Australian demographic statistics for the March quarter of 2017, which revealed that Australia’s overall population growth rate has accelerated led by unprecedented growth in Victoria, which has once again obliterated records. According to the ABS, Australia’s population rose

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Aussie internet data usage skyrockets

By Leith van Onselen The ABS today released its half-yearly Internet Activity report, which reported near exponential growth in data usage despite only moderate (2.1%) annual growth in internet subscribers: The total volume of data downloaded in the three months ended 30 June 2017 was 3.0 million Terabytes (or 3.0 Exabytes). This is a 15.8%

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Aussie households are spending more to live and learn

By Leith van Onselen Earlier this month, the ABS released its Household Expenditure Survey for 2015-16, which revealed that Australian households are spending more on basics: Today, the ABS released further analysis of its Household Expenditure Survey and has revealed that spending on education, household services and childcare is taking-up more of household’s budgets: “In

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Housing credit growth softened in August

By Leith van Onselen The Reserve Bank of Australia (RBA) has released its private sector credit aggregates data for the month of August 2017: A chart showing the long-run breakdown in the components is provided below: Personal credit growth (-0.2% MoM; -0.3% QoQ; -1.1% YoY) is still in the gutter, whereas business credit growth (0.5%

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WA to receive bigger GST slice

By Leith van Onselen The Commonwealth Grants Commission has backed new plans to deliver a greater slice of GST revenue back to Western Australia via an increase in iron ore royalties. From The West Australian: In an interim decision welcomed by Treasurer Ben Wyatt as a “first good step”, the commission conceded that the way

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Auckland’s housing shortage worsens

By Leith van Onselen The New Zealand National Government’s single-minded focus on solving Auckland’s housing crisis by boosting supply continues to fail. Today, Statistics New Zealand released figures showing that despite a big lift in Auckland dwelling consents in August, new supply continues to fall well short of immigration-driven demand. There were 1,184 dwelling consents

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Income recession hitting the middle-class

By Leith van Onselen The income recession afflicting Australia has been well documented on this site. Evidence comes from a variety of sources, all showing that typical Australian household incomes have fallen over recent years when adjusted for inflation. Consider the below charts illustrating the situation. First, the national accounts measure of compensation per employee,

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Can mass immigration save the housing bubble?

Australia is in the midst of another of its grand macroeconomic experiments. We pretend to be conservative economic managers but in reality we are like mad scientists concocting economic potions in bubbling test tubes. The alchemy is always directed at one thing only, keeping house prices high, but it throws everything from sulfuric acid to

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More record highs for stocks

DXY pulled back last night: AUD stabilised versus EMs: But fell against EMs: Gold held: Brent was whacked: Base metals rallied: But not big miners: EM stocks held: High yield is stable: US yields pulled back: European spreads contracted: And US stocks hit more record highs: It’s a pretty normal pullback following Trump tax excitement. There’s

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RBNZ LVR restrictions reins-in the speculators

By Leith van Onselen Data released by the Reserve Bank of New Zealand (RBNZ) revealed that property investor lending has continued to cool after the RBNZ implemented new loan-to-value ratio (LVR) restrictions targeting investors, which officially came into effect on 1 October 2016, although banks began informally applying the rules since they were first announced

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Greens campaign to rub out all dual citizen dodgers

Something to like about The Greens today: Larissa Waters and Scott Ludlam, the Greens senators who resigned after becoming aware of their citizenship conflicts have argued “ignorance or wilful blindness” should not be used as an excuse to save parliamentarians in potential breach of the constitution. In a marked departure from the arguments of Barnaby Joyce, Fiona

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Daily iron ore price update (hanging on)

Tianjin benchmark fell 10 cents to $62.60. Paper eased lower. Steel too. Coking coal futures fell. Coke was hardest hit. Texture from Reuters: “Iron ore fundamentals are not good,” said Zhao Xiaobo of Sinosteel Futures in Beijing. “Imports will rise in the fourth quarter and the environmental restrictions on steel mills are reducing iron ore

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Links 29 September 2017

Global Macro / Markets / Investing: Education Isn’t the Key to a Good Income – The Atlantic Drowning in grain – How Big Ag sowed seeds of a profit-slashing glut – reuters The Disconnect Between Unemployment and Wages – IMF Teen births have plummeted 51 percent over the past decade – VOX Bitcoin ‘More Than

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Netflix’s rise is free-to-air TV’s loss

Netflix continues to grow in popularity in Australia, with 7.6 million Australians now watching the online streaming service, according to a new Roy Morgan Research survey. By comparison, Australians continue to switch-off from free-to-air television: The growth of Netflix use over the past 18 months far exceeds its Australian Free-to-Air competitors. An estimated 7,558,000 Australians

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ECB blows air into Bitcoin bubble

Via Coindesk: Mario Draghi, president of the European Central Bank (ECB), has indicated that his institution does not have the authority to regulate cryptocurrencies. Making his statements to the European Parliament’s Committee on Economic and Monetary Affairs, Draghi said that “it would actually not be in our powers to prohibit and regulate” bitcoin and other digital currencies. The comments came in

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IMF: Wages growth is caput

Via the IMF: Over the past three years, labor markets in many advanced economies have shown increasing signs of healing from the Great Recession of 2008-09. Yet, despite falling unemployment rates, wage growth has been subdued–raising a vexing question: Why isn’t a higher demand for workers driving up pay? Our research in the October 2017 World Economic

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Why renewables will soon be cheaper than coal

Cross-posted from The Conversation: In a recent Conversation FactCheck I examined the question: “Is coal still cheaper than renewables as an energy source?” In that article, we assessed how things stand today. Now let’s look to the future. In Australia, 87% of our electricity generation comes from fossil fuels. That’s one of the highest levels