Over the weekend, we as a nation experienced a few more bank failures, including the 10th largest in bank failure in US History, Texas Guarantee Bank.  This is greatly pushing the seams of the FDIC since 1992. We have had 81 bank failures this year. Seventeen of them were from this month alone. With this current crisis, The FDIC has been exploring and working with banks to share in these losses.  The failure of Texas Guarantee Bank will cost the FDIC over $3 Billion dollars.
Just last year we experienced the FDIC dealing with other things.  For instance, the collapses WAMU($307 Billion) and  IndyMac, which was just under $31 Billion.
In an effort to attract more buyers for the failed banks, it has been reported and is expected they will relax restrictions on the Private Equity Firms buying the collapse firms. It has been said they are working out the details behind closed doors.
How does the FDIC plan on replenishing those lost funds? According to sources for CNBC, the talk is they are looking at special assessments similar to what they did in the S&L crisis.  It is also being discussed that during good times perhaps the assessment should be more in an effort to help increase the FDIC fund.  Keep in mind the FDIC insures over 8200 banks......Nationally, these banks are doing the every day-to-day business of opening new loans, doing business and waiting out the recession just like the rest of us.
Richard Bove stated on Monday, he  felt there would be 150-200 more banks failing.  He said no bank is too big to fail. For those who do not know who Bove is, he entered the securities arena in 1965.  Zachs ranked him as the top bank analyst for 2008. Bove stresses that the cost of covering the failed banks is going to be very costly.  Banks may end up putting upwards to 25% of next year's earnings towards this alone.  This will conversely show on the balance sheets as a decrease in earnings.  See where we are going with this?  Who ultimately is going to buy the failed banks?  We have exhausted several domestic resources....so quite possibly private equity firms and foreign banks look like the most logical answer.
Typically financial mingling with industrial is a bad mix......but we are in dire times and you know what that will result in.....dire means.  FDIC will need to get qualified buyers involved....give them some latitude in the control issue.  This is going to be a tough situation here.  There needs to be compromise and foresight. 
The FDIC has to keep their funding at a satisfactory level or we will have a consumer panic.  Consumer confidence and housing are connected. If the consumer is feeling good about the economy, they will more likely venture into a new home and beginnings...instead of just waiting out the recession.  This is a delicate fulcrum the Banking Industry and FDIC are teetering on.....
It was also reported today that the Standard & Poor's/Case-Shiller U.S. National Home Price Index rose 1.4 percent in the second quarter from the January-March period.  Good news about this is it is the first quarterly rise in 3 years.  However one must also consider in this statistic the first time home buyer credit. This  may or may not be extended.  If it is  extended the thought process has been to modify this to possibly include non first time home buyers as well. 
All this sounds great.... I know I for one will have ears open to Wednesday's meeting of the FDIC and how they are going to tackle this problem.  And most importantly, how this will affect consumer confidence.

Today, we are anticipating the results of the FDIC meeting.  They are also going to tell us how much is left in the fund IF we do not  find  private equity firms, or foreign monies to aid in this issue.