Lots More Busted Banks To Come

In 2009 we've already seen 81 bank failures in eight months, and one analyst says we could see another 150 to 200 more failures before all is said and done.

A prominent banking analyst said on Sunday that 150 to 200 more U.S. banks will fail in the current banking crisis, and the industry's payments to keep the Federal Deposit Insurance Corp afloat could eat up 25 percent of pretax income in 2010.

Richard Bove of Rochdale Securities said this will likely force the FDIC, which insures deposits, to turn increasingly to non-U.S. banks and private equity funds to shore up the banking system.

"The difficulty at the moment is finding enough healthy banks to buy the failing banks," Bove wrote.

And as bad as the forced consolidation of the banking industry is, the really scary part is the cost of this bailout.

Bove said the FDIC will likely levy special assessments against banks in the fourth quarter of this year and second quarter of 2010.

He said these assessments could total $11 billion in 2010, on top of the same amount of regular assessments. "FDIC premiums could be 25 percent of the industry's pretax income," he wrote.

And while the banks are going to be paying into the FDIC failure fund to the tune of billions, it's the American taxpayer who is going to get stuck with all the bad assets once all the smoke clears.

We're just not out of the woods yet, folks.