The FDIC said this week that it expects distressed loans tied to mortgages and commercial real estate failures to result in many more bank failures this year. Last year 140 U.S. banks failed, the highest annual level since 1992. The FDIC has said the total bill for bank failures for the period of 2009 through 2013 could reach $100 billion.

Five more banks were seized by regulators on Friday, bringing this year's total to nine. The five failed banks are:

The second half of the calendar year has begun, and earnings return to the spotlight this week. As usual, Alcoa Inc. (NYSE: AA) is among the first of the S&P 500 to report quarterly results. For the second quarter in which Alcoa agreed to sell its wire harness and electrical distribution business and its fastening systems business expanded into Morocco, analysts surveyed by Thomson Reuters expect the New York-based aluminum producer to report swinging to a net loss of $0.34 per share from a profit of $0.66 per share in the year-ago period. Second quarter revenue is expected to have fallen 48.3% to $3.9 billion. The full-year forecast is currently for a loss of $1.04 per share and revenue of $16.7 billion (-38.0%). Alcoa has missed expectations in the past three quarters, by as much as 17 cents per share. The long-term EPS growth forecast is 10.0%, which is better than the sector average. Alcoa slashed its dividend earlier this year, and the First Call consensus recommendation remains to hold AA. However, TheStreet.com recommends it as an against-the-grain pick. At $9.86, shares are down 12.4% since the beginning of the year, and recently have been bumping up against the 200-day moving average.

On Thursday, the Federal Deposit Insurance Corp. (FDIC) is expected to propose new guidelines for private-equity investors seeking to buy failed banks. Those guidelines are intended to ensure that these largely unregulated firms don't take too many risks with troubled banks or buy and flip them.

The new rules come as private-equity firms have grown increasingly active in the banking sector. FDIC Chairman Sheila Bair said she's comfortable with the private-equity deals the agency has struck for failed banks such as IndyMac and BankUnited, but that a more structured process needs to be put in place.

After the Memorial Day holiday in the United States, the earnings spotlight turns to Canadian banks: Bank of Montreal (NYSE: BMO), Canadian Imperial Bank of Commerce (NYSE: CM), Royal Bank of Canada (NYSE: RY), and Toronto-Dominion Bank (NYSE: TD) are all scheduled to report their second-quarter results.

While banks north of the border of generally have held up better than their U.S. counterparts, analysts surveyed by Thomson Reuters expect the four listed above to report that earnings declined between 20% and 30% since the same period of last year. All four have P/E ratios around 10, and they are paying dividends. Shares of all four have surged 50% to 83% in the past three months, but are still 26% to 38% lower than a year ago.

Sheila Bair, chairman of the Federal Deposit Insurance Corp., is suggesting that some critics of President Bush's subprime bailout plan may not exactly have the most altruistic motives.

Ms. Bair, who was appointed by President Bush in 2006, told the Wall Street Journal (subscription required) that "I do worry that some of the investors have taken short positions on the ABX," an index based on subprime-mortgage-backed securities.

Well isn't that enlightened. A lot of people have spoken out with intelligent reason in opposition the President's bailout plan. And now the chairman of the FDIC is saying, utterly without evidence, that some of these people have nefarious ulterior motives.

Here's the problem with Bair's "worrying": This issue should be decided on the merits, regardless of the motives of the individuals behind the arguments. Short-sellers will always be criticized for "bashing." But they're usually right. And if the critics of the bailout are making reasonable arguments, who cares if they're short?

It's a really sad commentary on how low the debate has fallen when the chairman of the FDIC is resorting to what is essentially name calling, rather than defending a position on its merits. Happily, some of our bloggers have made cases on the merits -- without resorting to name calling, and they mostly oppose the bailout.

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Our government's mortgage bailout madness
Proposed subprime bailout gives the shaft to responsible consumers