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It's a screaming headline and it's true. After bringing this country to its knees, many key US banks are now going to have to deal with Uncle Sam for the foreseeable future. That should be fun.

Two more banks failed yesterday, Northville, Mich.-based Main Street Bank and Eldred, Ill.-based Meridian Bank bringing the total number of failed banks in 2008 to 15.

When I was in college, Morgan Stanley was the place all of the soon-to-be Ibankers wanted to be. It was the blue chip, along with Goldman, of the NY Investment banking world. A company that once controlled markets is now at the market's mercy.

The battle between Wells Fargo and Citi for Wachovia is over and Wells is the winner. Citi walked away citing concerns over Wachovia's loan portfolio. Wells gets to greatly expand its banking franchise but also inherits billions in bad loans.

In a surprise move, Wachovia scrapped its deal with Citi and agreed to be acquired by Wells Fargo. Wells not only agreed to buy the whole bank, but raised its offer price and did the deal without any government assistance.

Kerry Killinger, the now ex-CEO of Washington Mutual joins other CEOs from financial services companies in the unemployment line.

In a rather strange move, Emigrant Bank, the parent company of Emigrant Direct has launched another online direct brand, DollarSavingsDirect. DollarSavings differs slightly from Emigrant Direct and currently has a higher rate.

The FDIC's insurance may lose 17% of its capital as bank failures have drained it. It's expected to to the point where the FDIC may ask other banks to pay more to replenish the fund.

PASADENA, Calif., Aug 01, 2008 (BUSINESS WIRE) -- On Friday, August 1, 2008, IndyMac Bancorp, the former holding company of IndyMac Bank filed for bankruptcy protection under the U.S. Bankruptcy Code (Title 11, Chapter 7 U.S.C). This action has no effect on the operations of IndyMac Federal Bank, FSB, which came into existence on July 11, 2008, when IndyMac Bank was removed from its holding company, IndyMac Bancorp, and IndyMac Federal Bank was placed into conservatorship by the Federal Deposit Insurance Corporation (FDIC). Other than a similarity of name, IndyMac Federal Bank has no relationship, nor does it share any employees, with IndyMac Bancorp.

The Powershares SKF is one of the new tracking stocks. This one is two times levered short the financials, which means that its movement is twice that of the financial index in a reciprocal manner. If the financials are up, this is down twice as much. This makes the thing extraordinarily volatile and dangerous.

Five days ago I reported that Bank of America's dividend was at 11% and that the stock might present a good buy. Did I listen to my own advice? No. Today, BofA was up more than 20%.

If the market is open, the financials are down 10%. This will continue until we have another Bear Stearns-like failure. Bernanke has told us as much. Don't try to bottom-fish. These are failed business models.

We've now had five bank failures in 2008 and I wanted to see how we are doing compared to the real estate downturn in the 1980s and savings and loan crisis it precipitated. The results are interesting.

The massive wealth and profits generated by the big Wall Street banks is draining away. Nearly half of the profit they earned over the last couple of years on the strength of mortgages, CDOs, etc. are gone. Massive write downs continue and the financial services industry looks like it will go through a period of downsizing.