While everyone focuses on Fannie Mae (FNM) and Freddie Mac (FRE), in my opinion there are 3 other possible disasters waiting in the wings.

1. Regions Financial (RF): The company needs to raise $2 billion, says Sanford Bernstein. What are their options for doing so?

They can sell debt. The problem here is that I believe you couldn't sell debt if you wanted. The last reported trade in RF paper was 2 weeks ago, nearly +700 to the 30 year or close to 12%. The company's preferred trades at 10%. And the stock is now a 'single digit midget' near $8 a share. So, as I see it, if you could get a deal done, shareholders could get a 50% haircut.

2. Washington Mutual (WM): WaMu trades as if it's in deep trouble. Its bonds trade in the 20% range and no way can they issue a preferred.

3. Lehman Brothers (LEH): This is my favorite and sits as my 'most likely to fail' problem child. Its stock is now on its way to being a single digit midget and just stuck investors with 143,000,000 shares at $28 a share in June of this year. I don't believe many folks are willing to buy more at $12. Also, its preferred stock trades are a not awe-inspiring 16%. 

As the markets obsess over FRE/FNM, in my opinion there are many other shoes waiting to drop, and while S&P futures continue to trade with an unnatural bid, all things considered, we have not 2 but at least 5 entities on the brink.

And to be frank, I feel the actual number is likely much higher. 

I remain cautious and am concerned about the possibility the system could come unglued if we get simultaneous failures. I believe the Federal Reserve, the Treasury, and the next President will have the fight of their lives on their hands.

Risks are extremely high.