Imagine the relief of getting out of a bad M&A deal as the economy falls apart. The deal may have looked good when the economy was expanding and money for transactions was available at the best rates in years. But, once all of that had evaporated, a lot of corporations just wanted to run their core businesses and perhaps cut costs to make it through the downturn.

The story is a little different for bankers who were counting on all of the fees that go with those transactions. According to the FT, "The total volume of worldwide mergers and acquisitions reached $3,280bn in the year to date, down 29 per cent from the full year 2007 as financing difficulties, volatility in valuations and widespread risk aversion saw deals pulled." Companies walked away from over 1,300 deals.

Take all of that information over to bank earnings. The financial firms are already facing more fall-out from the housing prices both from mortgage derivatives and foreclosures. Consumer credit is falling apart, which will lead to additional write-offs and losses. Fees for underwriting debt and equity have all but disappeared. If the M&A trend extends into 2009, and there is every reason to believe that it will, banks may not have a single bright spot in their earnings forecasts.

There has been some hope that global acquisitions would pick up as the falling stock market made a lot of targets "cheap," with their shares down 50% of more. But, the recession and tight credit markets appear to be trumping that, meaning there is no catalyst to bring M&A back.

Douglas A. McIntyre is an editor at 24/7 Wall St.