If Chris Dodd tells you the sun is shining

Grab an umbrella!!

Fannie Mae loses $2.3B in quarter as defaults rise
Friday August 8, 6:42 pm ET
 

Investors continue to worry that Fannie and Freddie will be overwhelmed by losses and require government aid. Fannie Mae and Freddie Mac, are the biggest buyers of U.S. home loans from banks and other lenders. Together they own or guarantee nearly half of outstanding U.S. mortgage debt.

Under the housing bill signed by President Bush last week, the government may boost lines of credit to the companies or buy their stock.

http://biz.yahoo.com/ap/080808/earns_fannie_mae.html?.v=13

One prominent blog writes this was the "day Alt-A died". Evidently the old school lending approach of requiring a decent down payment or a steady job is back in vogue. http://seekingalpha.com/article/90053-fannie-may-the-day-that-alt-a-died?source=yahoo

And what did the Chairman of the Senate Banking Committee say one month ago

"There's sort of a panic going on today, and that's not what ought to be. The facts don't warrant that reaction, in my opinion,” http://thehill.com/leading-the-news/dodd-seeks-to-quell-panic-over-mortgage-giants-losses-2008-07-11.html

and this was not an off-the-cuff response, as the next day he said this in a local CT newspaper

U.S. Sen. Christopher J. Dodd moved this weekend to calm fears about the stability of the American financial system as the Bush administration unveiled an unprecedented rescue plan for the nation’s two largest mortgage finance companies.

But while Dodd, the chairman of the Senate Banking Committee, insisted that the firms known as Fannie Mae and Freddie Mac were “in sound situation” and “good shape,” he also ripped the administration and the Federal Reserve Bank........
 

Dodd also warned the television talk show’s host that to suggest Fannie Mae and Freddie Mac were “in major trouble is not accurate.”

“And even asking hypothetical questions creates it own conclusions,” he added.

Dodd on Friday decried investors’ lack of confidence in Fannie Mae and Freddie Mac, which are responsible for nearly half of the outstanding U.S. mortgage debt, reportedly saying there were “never bottom feeders in the residential mortgage market.”

http://journalinquirer.com/articles/2008/07/16/connecticut/doc487b4ff58727c620830661.txt

Not "bottom feeders"????

Here's Larry Kudlow's take:    Over $1 trillion of subprime and Alt-A exposure. Sounds pretty thick into the ooze in my book. but I report, you decide http://article.nationalreview.com/?q=MDBlMmQxMjBkMDUzZDczNzE3Y2RjYmZiYzlkODNjYTQ=

My question is ---with Fannie and Freddie bleeding out like they were hit with a cluster bomb--, will Senator Dodd once again tell us it is time to:

"REMAIN CALM!!!!"????