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President Obama may have the FDIC run a "bad bank" that will purchase the toxic assets from bank balance sheets. Sound familiar? But this bad bank doesn't solve the central issue, how to value thes toxic assets.

1st Centennial Bank in California was closed today by the California Department of Financial Institutions, marking the third bank closing of 2009. And we're still only in January!

The Fed today made a special exemption and allowed GMAC to become a bank holding company, giving it access to TARP funds. That means that GMAC bank customers do not have to worry about the parent company defaulting.

I noticed recently that AmTrust has significantly lowered its rates to the point that it has fallen off most of the rate tables. Then I received word of an email they were sending out. Now, it turns out they are being monitored by the OTS.

Citigroup received the government bailout today that everyone knew was coming. The question is will this be enough and will Citi be back on the hot seat in a couple of months?

Downey Financial and two other banks were closed and hastily sold off to larger banks by the FDIC. This continues a trend of banks closing and being sold in deals brokered by the FDIC. It is the beginning of a massive consolidation in the banking sector.

Citigroup's stock fell below $10 in trading today, hitting a level not seen since the mid-90s. There are also rumors Citi may be purchasing Chevy Chase bank. Looking at their stock chart I'm not sure they should be buying anyone.

Alpha Bank and Trust was closed last Friday by the Georgia Department of Banking and Finance, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. This is the ninth bank failure in 2008.

There's another bank acquisition to report. PNC Corp. with the assistance of the TARP program, has purchased Ohio based National City. The combined bank will have a core deposit base of $180 billion, making PNC the fifth largest U.S. bank by deposits.

Sovereign Bank was quietly purchased by Banco Santander after a run caused it to face collapse. More of this is coming even with the government bailout.

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.