After the panic of 1929, and during the first 10 months of 1930, 744 banks failed. In all, 9,000 banks failed during the decade of the 30s.

Those were small banks, but still...this one failure will cost the FDIC about 10 percent of its reserve fund. That 10 percent evidentally is going to cause them enough trouble. It wasn't any bank run that caused this collapse, and it's clear that the FDIC is not going to be able to deal with the mortage crisis if it continues.

Marginal mortage owners are already causing serious problems...and we're just now moving into a recession that hasn't effected the employment rate at all. A defensive investment portfolio is recommended, needless to say.