Fannie Mae conducted one of its regular "benchmark note" auctions today. Here is the relatively non-descript Reuters report.
The spread over Treasuries was 122bps.
In the old days when Fannie debt was explicitly not backed by Treasury it was about 60bps or less.
The US Government has made it clear that it backs Fannie - so this extra-wide spread is surprising...
Unless people no longer trust the US Government.
PS. The investment implications are not good. The only plausible buy case for Fannie at the moment is that its not much to pay for a franchise with a US Government guarantee. If nobody trusts the guarantee there is no franchise...
The content contained in this blog represents the opinions of Mr. Hempton. Mr. Hempton may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Hempton's recommendations. The commentary in this blog in no way constitutes a solicitation of business or investment advice. In fact, it should not be relied upon in making investment decisions, ever. It is intended solely for the entertainment of the reader, and the author. In particular this blog is not directed for investment purposes at US Persons.