Our benchmark FNMA 5.5% bond took a 28bp step higher today in response to a flagging stock market, closing at $101.84. There was little in the way of economic news. Pending Home Sales in Oct. fell -0.7% and dropped -1.0% on a year-over-year basis vs. a consensus of -3.0% for the month and -3.6% year-over-year. Another positive was stronger sales in California and Florida, two of the weakest states for real estate in the country. A $15 billion bridge loan bailout plan for the Big 3 automakers is being finalized. A congressional vote is expected tomorrow. A $30 billion Treasury auction in four-week bills today was very unusual to say the least. Exceptionally aggressive bidding with a Bid/Cover Ratio of 4.20 took the yield to 0.00% and actually below 0% to -0.05% after factoring in bookkeeping expenses. Investors placed bids for $126 billion at the auction for $30 billion in four-week bills ($126B/$30B = 4.20). Usually a Bid/Cover Ratio of 2.0 is a sign of a successful auction with aggressive bidding. In this particular case such a strong auction with 0.0% yield means investors are just parking cash and are looking to not lose money rather than taking any risk to earn even a tiny return. Tomorrow the Treasury will sell $28 billion in 3-year notes and on Thursday they will sell $16 billion in 10-year notes. The short end of the yield curve is being used as a safe-haven parking place for cash. In stock land, Broadcom, Danaher, FedEx, Texas Instruments, and Nucor all lowered their earnings guidance to lead the market lower and give the Bears a reason to cheer. The Dow fell 242 points to end at 8,691. The broader S&P 500 Index slid 21 points to close at 888 and the NASDAQ Composite Index lost 24 points to close at 1,547.