Kudos to Senator Christopher Dodd of Connecticut for holding his Senate Banking Committee subprime hearing. While nothing was really accomplished to stop a problem that only time, lots of money and pain will need to work out, it was good that a broader audience got to witness the dichotomy that is well known by those us in the financial world: those vested interests who are so desperate to tell everyone subprime is 'contained' versus folks like Countrywide managing director Sandor Samuel who testified today that foreclosures for 2006 maybe the worst yet and that there is more to come. The Fed official who said, "At this time we are not observing spillover effects from the problems in the subprime" looked disingenuous for trying to downplay the subprime meltdown by offering only the "at this time" perspective and not volunteering more information on the risks associated with Alt-a mortgages and coming resets.
Dodd ought to invite some bigger fish in. Former Fed chairman Alan Greenspan should 'splain why he openly advocated adjustable rate mortgages during those 1% Fed Funds days when he knew better than anyone else that the Fed Funds rate would not stay at 1% forever. Or how about the CEOs of the big investment houses in New York? Bear Stearns, Morgan Stanley, Lehman, et al are the securitizers of all of that mortgage debt - the packagers who sell it to buyers like pension and mutual funds who are eventually going to get burned.
Dodd only scratched the surface today, but it was a decent start.