It have been reported that Fannie and Freddie have serious financial trouble and loans. It had been hoped by many here in San Diego that lending standards were going to get a little easier to meet. It was reported on CNNmoney that standards are going get tougher.




The Big Picture | Uh-Oh! Bad Sign on Fannie & Freddie

Marketwatch reports that the government discussed a contingency plan in case the unthinkable happens, and Fannie Mae (FNM) and Freddie Mac (FRE) were to fail.

But don't worry -- the Bush administration DOES NOT expect the entities to fail. And, they note no rescue plan is imminent.

Rex Nutting says Uh-Oh! This is a major contrary indicator, and it suggests Freddie and Fannie are toast!

Why?

"Is there any surer sign of an impending disaster than a reassurance from the White House that it doesn't expect it to happen?"

Rex adds this short list of other things that the Bush administration didn't expect:

Terrorists to fly airplanes into buildings.

Saddam Hussein to have been telling the truth about not having any weapons of mass destruction.

Iraqis to object to a long-term occupation by a foreign power.

Hurricane Katrina.

People in New Orleans to object to the government's response to Hurricane Katrina.

The Democrats to take control of Congress.

The Democrats to cave in so easily on important issues after they took control of Congress.