Anxiety about the cost of raising money triggered some serious selling that ended with blood running down the Street. It was the worst day for banks since July 2002. 

Fannie Mae

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[FNM  Loading...      ()   ] and Freddie Mac

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[FRE  Loading...      ()   ] dropped sharply Wednesday as some investors worried that the two pillars of the U.S. housing market will need to raise billions of dollars in additional capital through stock sales, diluting the holdings of current investors.

However the concern might be unfounded. “Fannie and Freddie are not going under,” analyst Dick Bove tells Fast Money. “There’s plenty of money available for them through the federal home loan bank system if that’s necessary.”

Meanwhile, Merrill Lynch

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[MER  Loading...      ()   ] shares fell more than 9 percent, after Fitch Ratings said it may cut the U.S. investment bank's debt rating, given expected ongoing write-downs and diminished prospects for earnings.

"There is uncertainty about financials as we go into earnings season about what write-offs and capital raising might be needed," says Bucky Hellwig, senior vice president at Morgan Asset Management, in Birmingham, Alabama.

Analyst Dick Bove paints a very different picture. He's extremely positive about the US banking system. “The banking industry in the US is both strong and healthy,” Bove tells Dylan Ratigan. “All of the fear being driven through the market because of the huge loan losses aren’t relevant because they’re non-cash charges.”

If you’re looking for a trade Bove is bullish on Bank of America

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[BAC  Loading...      ()   ] and Citigroup

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[C  Loading...      ()   ] as well as PNC Financial

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[PNC  Loading...      ()   ] , US Banc Corp

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[USB  Loading...      ()   ] and Well Fargo

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[WFC  Loading...      ()   ]. “All these companies are sound and doing business every day.”

“We’re going through an orgasm of agony of fears related to this industry which are just not valid,” Bove concludes.

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Trader disclosure: On July 9, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (INTC), (MSFT), (WMT); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Najarian Owns (AAPL), (CHK), (MAR), (TSO), (ANR); Najarian Owns (SLB) Calls, (YHOO) Calls; Najarian Owns (XLF) And (XLF) Puts; Najarian Owns (FNM) And (FNM) Puts; Finerman Owns (GS); Finerman's Firm Owns (MSFT), (SUN), (TSO), (VLO),(PPH), (MRK), (PFE), (JNJ); Finerman's Firm Owns (TGT) Calls; Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM); Finerman's Firm Is Long SPX Index Puts; Finerman's Firm And Finemran Own (C) And (C) Leaps; Finerman's Firm And Finerman Own (PDE) And (PDE) Calls; Finerman's Firm And Finerman Own (FLS)

Gartman Owns (PLL), (AFFY), (SJT), (JJG), (EWZ), (PH), (GOOG),(ATW); Gartman Owns (SU), And Is Short (SU) Calls; Gartman Owns (UYG) And Owns (SDS) Against It; Gartman Is Short (WFMI), (BA), (DE); Gartman Owns (BPT) And Is Short (BP); Gartman Owns (TOWN) And Is Short (ING); Gartman Is Short (X); CIBC Gartman Index Owns Natural Gas And Is Short Crude Oil; CIBC Gartman Index Owns Aluminum

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