Now this information is really damn scary

There's a reason why investors and taxpayers fear the federal government getting further involved in the banking industry.

Too many big, national banks represent a fiscal black hole for taxpayer money. And the following FDIC report this afternoon turned the stock market from 100 points positive on the Dow to 90 points negative by the end of the trading day.

AP reported:

America's banks lost $26.2 billion in the last three months of 2008, the first quarterly deficit in 18 years, as the housing and credit crises escalated.

The Federal Deposit Insurance Corp. said Thursday that U.S. banks and thrifts also more than doubled the amount they set aside to cover potential loan losses, to $69.3 billion in the fourth quarter from $32.1 billion a year earlier.

Regulators said there were 252 banks in trouble at the end of 2008, up from 171 in the third quarter.

The FDIC also said that for all of last year, the banking industry earned $16.1 billion, the smallest annual profit since 1990.

Rising losses on loans and eroding values of assets "overwhelmed" banks' revenues in the fourth quarter, the FDIC said. More than two-thirds of all banks and thrifts turned a profit in that period but their earnings were outstripped by large losses at a number of major banks.