As I wrote recently, I don't see much value in the FDIC Troubled Bank List considering two quarters ago it was missing IndyMac Bank - which went on to the largest bank failure at that time, and then last quarter (Aug 26: FDIC "Troubled Bank" List) it missed Washington Mutual (WM) which was the largest S&L in the USA, and effectively failed. Further, this list does not have Citigroup (C) which is being supported by the US taxpayer. So this whole list is measurably suspect. However, the one point of use is in the pace of degradation... granted its from one bad data set to another bad data set but we now have a 46% increase quarter over quarter.

Is your bank on the list? Well of course you won't know because banks are about trust and if your bank is on this list, it would cause a run on the bank. But don't worry about it - you are FDIC insured up to $250K per account. Don't worry if the FDIC has enough money... if not, they will raise fees on the banks to get more funds. What's that? How can you raise rates on banks that are imploding and hence can't afford to pay higher rates? Good point - well one scheme is for the banks to get money from the government (TARP) and then give it back to the government (FDIC insurance fund) - haha - it almost would be laughable if it were not so pathetic. I have an even better idea! Print more money out of thin air to fund the FDIC! Works for everything else! Just add it to the tab - $8 Trillion and counting.

Bloomberg

• The Federal Deposit Insurance Corp. said banks categorized as “problem” institutions increased 46 percent in the third quarter to the highest level in 13 years as the credit crisis battered the financial industry. The FDIC identified 171 problem banks as of Sept. 30, up from 117 in the second quarter and the highest since December 1995, the regulator said today in its quarterly report.