Category Archives: Housing demand

Investments of Macquarie Group Limited in West African Resources Ltd.

According to Yahoo Finance, Macquarie Group Limited (“Macquarie“) announces that, due to the recent acquisition of 40,545,224 options, as compensation for services in connection with a loan, it now has ownership of 40,545,224 options of West African Resources  Ltd (“West African Resources“), each warrant with a strike price of AUD 0.14. To Macquarie’s knowledge, this represents approximately 13.04% of the issued and outstanding shares of West African Resources, on a partially-diluted basis.

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FHFA Faces Pushback on Cuts to Fannie Mae Apartment Lending

According to Bloomberg,

The U.S. regulator of Fannie Mae and Freddie Mac is proceeding with plans to scale back their financing of apartment-building loans next year, shrinking what opponents call a critical support for rental housing.

The government-owned companies back about 45 percent of the multifamily market. While the size of the cuts is still undetermined, they will add to a 10 percent reduction in apartment financing the Federal Housing Finance Agency required Fannie Mae and Freddie Mac to make this year as part of a broader effort to boost private investment in housing finance.

Developers, lenders and affordable-housing advocates are pushing back, saying the move could deprive rural areas and smaller cities such as Boise, Idaho, and Topeka, Kansas, of rental housing that private investors may neglect. Dozens responded to a recent FHFA request for suggestions with the same message: Don’t do it at all.

“Without Fannie and Freddie our ability to get deals done in smaller towns would be greatly reduced,” E.J. Burke, chairman of the Mortgage Bankers Association and an executive vice president at Cleveland-based KeyBank, said in an interview. “We haven’t seen that impact yet, but down the line I’m very concerned if the conservator continues to cut their volumes.”

FHFA officials say Fannie Mae (FNMA) and Freddie Mac’s multifamily footprint is still larger than their 30 percent market share before the financial crisis. The market absorbed this year’s cuts “without major disruption,” FHFA Acting Director Edward J. DeMarco said in a speech Oct. 24.

Long-Term Plan

The reductions are part of a long-term FHFA plan to create more room in housing finance for private capital. In the absence of action from lawmakers to set up a new mortgage finance system, “we will continue to take gradual steps to reduce the enterprises’ exposure in this market, while maintaining a market presence,” DeMarco said.

Fannie Mae and Freddie Mac purchase mortgages and package them into securities on which they guarantee payments of principal and interest. They were seized by regulators in 2008 after investments in risky single-family loans pushed them to the brink of insolvency. They are now owned by the U.S. government, and their profits go to the Treasury.

Since the financial crisis, the companies’ multifamily portfolio has provided steady profits. Before taxes this year, Fannie Mae earned $1.4 billion through Sept. 30 on its apartment business and Freddie Mac (FMCC) earned $1.8 billion, according to company filings.

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Hedge Funds Back Off Banks as Mutual Funds Dip In

Hedge funds who have tried to make money out of European banks during the euro debt crisis are becoming frustrated with the sector’s erratic movements just as some bigger, and more patient, institutions are dipping tentatively back in.

European bank stocks .SX7P have risen more than 25 percent since late July, fuelled by relief over new crisis-fighting plans, in particular the ECB’s latest announcements which have triggered hopes of a more lasting solution.

But the sector at the root of the global financial crisis has repeatedly disappointed investors after each attempt to call a floor, from a rally at the beginning of 2009 on hopes that the worst of the global credit crunch was over to short-lived optimism over the European Central Bank’s liquidity injections.

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Investors Pull More Money Away From Hedge Funds

Investors took more money away from hedge funds in July when they asked for $7.4 billion back, underscoring their frustration with an industry that has long promised to make money in all markets but is currently delivering only middling returns.

Reported by Svea Herbst-Bayliss, July’s redemption requests were up sharply from the $4.2 billion pulled out in June, according to data released by BarclayHedge and TrimTabs Investment Research on Tuesday.

That leaves hedge funds industry assets at roughly $1.87 trillion, down 23 percent from their peak four years ago before the financial crisis hit, the research report found.

“We’ve seen a notable reversal in hedge fund industry fortunes during the past year,” said Sol Waksman, founder and president of BarclayHedge.

This is troubling news in an industry dwarfed in size by the mutual fund industry but able to attract some of the world’s savviest investors with the promises of big paychecks and more investing freedoms. Similarly big name investors including pension funds and wealthy individuals have long been attracted to hedge funds because their managers can short, or bet against a security, thereby having more tools at their disposal to deliver better returns.

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Consumer Confidence In U.S. Declines To A Five-Month Low

By Michelle Jamrisko – Jun 26, 2012

(Bloomberg)

Confidence among U.S. consumers declined in June to a five-month low as Americans became less sanguine about the outlook for the labor market and incomes.

The Conference Board’s index dropped for a fourth straight month, to 62 from a revised 64.4 in the prior month, figures from the New York-based private research group showed today. The median forecast of economists surveyed by Bloomberg News called for a reading of 63.

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