Yet another sign of turmoil in the credit markets: Freddie Mac's sale of $3 billion in 5-year notes did not go well. The Government Sponsored Enterprise was forced to pay 113 bps over Treasuries to borrow money, up from 69 bps at its last 5-year note sale in May. Asian investors – big buyers of FRE
paper in recent years – bought less of the auction as well: 31% vs. 41% in May. Bloomberg reports
the spread is the highest going back at least a decade.