In what could be the most watched private equity deal of the year, a consortium of buyout firms led by billionaire investor Wilbur L. Ross has set its sights on BankUnited Financial Corp. (NASDAQ: BKUNA), says the Wall Street Journal (subscription required). The consortium includes Carlyle Group and Blackstone Group (NYSE: BX).

Earlier this year, federal regulators declared that the Florida-based lender was "critically undercapitalized" and demanded that it find a buyer or raise new capital. While regulators have traditionally favored other lenders in sales of banks, if Ross's group is successful, it would not only be one of the largest acquisitions in the financial-services sector made by private equity, but could also signal a shift in the government's attitude toward private-equity buyers of banks.

TheStreet.com's Jim Cramer says everything depends upon these financial programs.

Maybe Sheila Bair doesn't matter at all. Maybe nothing matters. The chatter behind the scenes everywhere is, "Just let it happen, it can't be any worse than this."

I say, are you kidding me? Do you know that our whole country would simply stop if we didn't have these programs and these government promises?

Think of it like this: If you have models that show 10% unemployment and you offer credit cards, your model says don't offer them. But if the government didn't guilt-trip these companies into offering them, you couldn't get one.

TheStreet.com's Jim Cramer says you can game the psychology of the market if you want, but know the rules.

I see the plan: Every day that the market looks like it is going down we give $10 billion to some bank! It is sure-fire. Did you notice the momentary weakness in France Monday? Quick, cut checks to BNP, SocGen and Agricole. Why not? When ING (NYSE: ING) (Cramer's Take) looked like it was a disaster, giving $13 billion to that one-time conservative bank turned all of Europe around!

Monday, when there was a moment that we looked weak, when it looked like we were going to go from plus 200 to below 100, Treasury let it be known that there is a whole other round of checks coming for the second-tier players. Who knows? Boom. That plus higher oil prices turned the market around in the upside-down world we are now in! No doubt soon Downey (NYSE: DSL) (Cramer's Take) and BankUnited (NASDAQ: BKUNA) (Cramer's Take) might get checks and then everything will go higher.

Oh, and on top of that, we have a new stimulus plan, one specially designed, no doubt, to move Target (NYSE: TGT) (Cramer's Take) back to its moving average and get Macy's (NYSE: M) (Cramer's Take) off the critical list.

TheStreet.com's Jim Cramer says the government needs to step in and take charge, and it needs to do it now.

We all know it. All of us. We know that the subprime mortgages that Lehman (NYSE: LEH) (Cramer's Take) wrote in Europe have come back to haunt them. We know that AIG (NYSE: AIG) (Cramer's Take) insured a lot of bad paper over in Europe when it decided to "avoid" the U.S. Subprime financial insurance, if you can call its multi-billion-dollar exposure "avoidance."

We know that Washington Mutual (NYSE: WM) (Cramer's Take) can't absorb the losses itself.

We know that Downey (NYSE: DSL) (Cramer's Take) and Corus (NASDAQ: CORS) (Cramer's Take) and BankUnited (NASDAQ: BKUNA) (Cramer's Take) can't raise the money they need.

We know all of these things. I think the federal government does, too. We lived in an unregulated time where everyone acted badly and no one protected anyone, and now these institutions have to be dealt with in a way that is the least painful of all the painful ways.

Of course, though, this government has no desire to deal with things until guys like Bill Gross or the Chinese government say, "We are done buying your paper," when it came to Fannie Mae (NYSE: FNM) (Cramer's Take). I guess they want a run at the bank of Washington Mutual and they want customers to stop doing business with Lehman before that's sold for scrap, although I must say that the Bear deal worked pretty well for everybody except Bear shareholders.

TheStreet.com's Jim Cramer says this bank on the FDIC's problem list is big enough to matter.

How much was made of the FDIC's "problem bank" list yesterday? Frankly, a little too much -- the list could be 200 banks long and be insignificant or it could be five banks long and be of incredible importance.

Is there any doubt that that the FDIC can handle 100 banks of the $1 billion to $2 billion variety? There shouldn't be. They can look the other way on most of them if they have to, or close them sequentially while asking for more capital along the way.

But if BankUnited (NASDAQ: BKUNA) (Cramer's Take) with $7 billion in deposits goes under, that'd makes headlines. It would be particularly newsworthy because it is in a visible location (the Miami area) and would cause a flood of stories about older people worried about their deposits -- pensioners -- and a big round of stories about how horrible Florida real estate really is. Then you get stories about how IndyMac and BankUnited represent the "system," and when you add that to the woes of Fannie (NYSE: FNM) (Cramer's Take) and Freddie (NYSE: FRE) (Cramer's Take) -- which are now directly making it harder to get cheap mortgage money because they are paying through the nose for their own money and buying fewer mortgages, just want we don't need -- and you get headlines galore about how bad things are. When you couple that with the inaction of Treasury on the FNM/FRE front, you are going to be in for a test of the July 15 lows.

Last week, the FDIC oversaw the second biggest bank failure in U.S. history -- $32 billion IndyMac Bancorp (NYSE: IMB). I thought more would be on the way and this morning's New York Times estimates that 150 of the 7,500 U.S. banks will fail in the next 12 to 18 months. The FDIC only has $53 billion in its fund to cover bank failures so it is going to be needing much more cash, which it may get from raising insurance rates. No doubt those of us with bank accounts will pay the price.

For those looking to profit from this failure, it's time to get a hold of the FDIC's problem bank list and start estimating the ones that are most likely to get taken over. Here are some hints: look at their mortgages as a percent of total loans, their cash flow, when they have to pay back their debt, and the increase in the rate of their bad loans. The Times mentions two that are probably already on the radar of short sellers:

• BankUnited Financial Corporation (NASDAQ: BKUNA) in Florida, which trades at 77 cents a share and is probably too far gone to profit from as a short, went for $20 a share a year ago.
• Downey Financial Corporation (NYSE: DSL) in California, which trades at $1.69 today, traded at $65 a year ago.

MOST NOTEWORTHY: Carnival, Royal Caribbean, BankUnited and Royal DSM were today's noteworthy downgrades:

• ABN downgraded shares of Carnival Corp. (NYSE: CCL) to Hold from Buy and Royal Caribbean Cruises (NYSE: RCL) to Sell from Buy as they believe the slowing economy will drive slower demand over the next 12 months.
  
• Suntrust downgraded BankUnited (NASDAQ: BKUNA) to Neutral from Buy citing the company's intention to raise the number of Class A Common Stock to 500M from 200M.
  
• Royal DSM (OTC: RDSMY) was downgraded to Neutral from Buy at Goldman on valuation following the recent rally.

OTHER DOWNGRADES:

• WebMD (NASDAQ: WBMD) was downgraded to Sell from Neutral at Goldman.
  
• Platinum Underwriters (NYSE: PTP) was cut at JP Morgan to Underweight from Neutral.
  
• UBS cut Methanex (NASDAQ: MEOH) to Neutral from Buy.
  
• Infosys Technologies (NASDAQ: INFY) was lowered at Susquehanna to Neutral from Positive.

MOST NOTEWORTHY: HSBC Holdings, AstraZeneca, Syneron Medical, Talbots, BankUnited and First Fed Financial were today's noteworthy downgrades:

• UBS downgraded shares of HSBC Holdings(NYSE: HBC) to Neutral from Buy on valuation, rising customer defaults and slower growth at the company's the U.S. consumer-finance unit.
  
• UBS also downgraded AstraZeneca (NYSE: AZN) to Sell from Neutral, as they believe the company faces major risks from drug approvals, competition and lawsuits.
  
• Merriman downgraded shares of Syneron Medical (NASDAQ: ELOS) to Neutral from Buy following the company's Q3 earnings preannouncement due to near-term margin erosion and growth drivers that remain four quarters away.
  
• CIBC downgraded shares of Talbots (NYSE: TLB) to Sector Performer from Outperformer as they believe 2H07 expectations are too high given the current weakness in the Missy space.
  
• Friedman Billings downgraded BankUnited (NASDAQ: BKUNA) to Market Perform from Outperform and FirstFed Financial (NYSE: FED) to Underperform from Market Perform based on credit trends that are eroding faster than anticipated.

OTHER DOWNGRADES:

• Merrill downgraded JMP Group (NYSE: JMP) to Neutral from Buy.
  
• Baird downgraded Cabela's (NYSE: CAB) to Neutral from Outperform.
  
• Societe Generale downgraded Business Objects (NASDAQ: BOBJ) to Hold from Buy.