With GMAC closing 200 offices and laying off over 5,000 employees, we prognosticated more bank failures just two days ago, and even provided you with the FDIC Failed Bank List. Now, FDIC Chairwoman Sheila Bair admitted what we suspected was true: More bank failures are on the horizon.

The article explains a self-fulfilling prophecy that is quite interesting: As prices continue to fall, the defaults lead to excess inventory (through short sales or bank-owned properties), which push prices lower, and that creates more defaults, which leads to more inventory – you get the point.

The FDIC even stated that they have a “problem list” of 117 “thinly capitalized” banks they are watching – up from 90 in March. The FDIC Failed Bank List only goes back to October 1, 2000. The last time we had more bank failures was 2002, when 11 banks failed. In the severe economic downturn (and savings and loan fiasco) of the early 1990′s, 291 banks failed. That sort of puts it in perspective, however, it seems that this time around, the impacts are being felt much more strongly by the average American.

All these bank failures create a need for higher FDIC insurance premiums for participating banks (there are 8,400), and those costs have to go somewhere. Most likely they will trickle into the consumer market in some non-descript, unobvious way, but passed on nonetheless.