Another scary story gets a bit closer

As the Washington Post notes, Loan Refinancings are Putting the Squeeze On Fannie Mae. But, as I point out here, the real trouble will come when interest rates start to rise again.
UpdateAaron Task of manages the “Sum of All Fears” scenario, pointing out that Fannie Mae’s problems are intertwined with JP Morgan’s derivative business. Both look susceptible to a ‘100 year flood’ event that hasn’t been factored into calculations.