Monday, August 25, 2008

Only In The Bizzaro World...

Freddie Mac sees stronger demand for $2 bln bill sale

NEW YORK, Aug 25 (Reuters) - Freddie Mac's (FRE.N: Quote, Profile, Research, Stock Buzz) $2 billion bill sale on Monday drew stronger demand and interest rates rose compared with the most recent sales of the same maturities.

Freddie Mac on Monday sold $1 billion of three-month bills due Nov. 24, 2008 at a 2.580 percent rate, compared with a 2.475 rate for $2 billion of similar maturity bills sold on Aug. 18.

Freddie Mac also sold $1 billion of six-month bills due Feb. 23, 2009 at a 2.858 percent rate, compared with 2.780 percent for the same size sale of the same maturity a week earlier.

Demand for the three-month bills was higher than a week earlier, based on a bid-to-cover ratio of 3.95 compared with 2.19.

Demand for the six-month bills was higher than a week earlier, based on a bid-to-cover ratio of 3.42 compared with 2.42.

A bid-to-cover ratio reflects the amount of bids compared with the amount offered. A lower ratio indicates weaker demand. (Reporting by Rodrigo Campos; Editing by Tom Hals)

How the bleep can "stronger demand" manifest itself as lower prices (and higher yields)?

Good job Rodrigo Campos and Tom Hals, you Morons!

These quasi-government agencies are selling their debt at record spreads to Treasuries.

For anyone to assert that their bonds are seeing "strong demand" (no less when prices are falling)...

It would be like me going to a bar, getting rebuffed by 25 coeds, and then claiming that I "was in high demand" because some wench enthusiastically took advantage of my *beer goggles*!!!

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